Seth Belzley has an article in the most recent Virginia Journal of Law & Technology on
Grokster and Efficiency in Music. You may recall Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. as the US Supreme Court decision that held the Grokster second generation peer-to-peer file sharing system responsible for copyright infringement by virtue of the way the service was marketed. Notably the court did not outlaw P2P file sharing per se, which is a balance Belzley says is exactly right.
Belzley illuminates the difference between wealth and welfare. They are both measures of public good, but wealth is necessarily measured in dollars while welfare encompasses more intangible qualities. In Belzley's analysis, P2P technology may reduce the revenues to the record companies (wealth) but may actually makw music more widely available (welfare). He makes a compelling case for how the reduction in the former may not necessarily reduce the total production of music, since most musicians never see any royalties anyway.
