Yes, of course "exactly balanced" is true only when we reckon in dollars and books rather than utility. (The way I put it earlier in the thread was: "first-order effects that cancel out exactly when expressed in terms of money, and therefore probably cancel out approximately when expressed in terms of utility".)
Perhaps a good argument can be made that for most book-buyers a transfer of money from them to the publisher (and thence to the author, publisher's employees, etc.) produces a net utility loss. But (1) I still don't see that this has anything to do with the broken window fallacy -- I suspect that Anubhav thinks I'm making a more complicated point than I actually am -- and (2) it certainly won't do to look only at my loss of money and act as if the money has just disappeared into the void.
(#2 might be wrong for people who are close to being purely selfish. I agree that someone motivated only by self-interest can, to a good first approximation, pretend that money they spend simply disappears, and that some reasons for preferring legal purchase over illegal copying will have no force for such a person. I'm fairly sure that Anubhav isn't assuming pure selfishness; certainly many of his/her arguments seem to assume the reverse.)
Yes, of course "exactly balanced" is true only when we reckon in dollars and books rather than utility.
But they're not exact even then.
Physical scenario: I pay you $10 and you give me a book. I lose $10, you gain $10. I gain the book, you lose it.
Your assumption holds so far. But now, consider...
Digital scenario (legal): I pay you $10 and you lease me a digital copy of the book. I lose $10, you gain $10. I gain a book, but you don't lose it, since my copy of the book was created (copied) as and when I ordered it, and you still have your copy....
See also: Twelve Virtues of Rationality, The Meditation on Curiosity, Use Curiosity
What would it look like if someone was truly curious — if they actually wanted true beliefs? Not someone who wanted to feel like they sought the truth, or to feel their beliefs were justified. Not someone who wanted to signal a desire for true beliefs. No: someone who really wanted true beliefs. What would that look like?
A truly curious person would seek to understand the world as broadly and deeply as possible. They would study the humanities but especially math and the sciences. They would study logic, probability theory, argument, scientific method, and other core tools of truth-seeking. They would inquire into epistemology, the study of knowing. They would study artificial intelligence to learn the algorithms, the math, the laws of how an ideal agent would acquire true beliefs. They would study modern psychology and neuroscience to learn how their brain acquires beliefs, and how those processes depart from ideal truth-seeking processes. And they would study how to minimize their thinking errors.
They would practice truth-seeking skills as a musician practices playing her instrument. They would practice "debiasing" techniques for reducing common thinking errors. They would seek out contexts known to make truth-seeking more successful. They would ask others to help them on their journey. They would ask to be held accountable.
They would cultivate that burning itch to know. They would admit their ignorance but seek to destroy it.
They would be precise, not vague. They would be clear, not obscurantist.
They would not flinch away from experiences that might destroy their beliefs. They would train their emotions to fit the facts.
They would update their beliefs quickly. They would resist the human impulse to rationalize.
But even all this could merely be a signaling game to increase their status in a group that rewards the appearance of curiosity. Thus, the final test for genuine curiosity is behavioral change. You would find a genuinely curious person studying and learning. You would find them practicing the skills of truth-seeking. You wouldn't merely find them saying, "Okay, I'm updating my belief about that" — you would also find them making decisions consistent with their new belief and inconsistent with their former belief.
Every week I talk to people who say they are trying to figure out the truth about something. When I ask them a few questions about it, I often learn that they know almost nothing of logic, probability theory, argument, scientific method, epistemology, artificial intelligence, human cognitive science, or debiasing techniques. They do not regularly practice the skills of truth-seeking. They don't seem to say "oops" very often, and they change their behavior even less often. I conclude that they probably want to feel they are truth-seeking, or they want to signal a desire for truth-seeking, or they might even self-deceivingly "believe" that they place a high value on knowing the truth. But their actions show that they aren't trying very hard to have true beliefs.
Dare I say it? Few people look like they really want true beliefs.