True: in the absence of anticipation of exclusivity rights, creators would seek ways to repoduce the pseudo-scarcity that socially-recognized exclusivity rights would otherwise provide. And they will generally do so via less efficient means: for example, rather than giving the user a copy of the software, the creator will keep it in a "black box" they control, and simply perform the input/output over a network, incurring strictly more overhead than if they could trust the user to keep their own copy and not distribute it.
This phenomenon mirrors the more general ones of how:
societies with people more willing to steal others' physical possessions will still find ways to be secure in such possessions, but by diverting more resources to securing them; or
societies with people less willing to trust strangers (or honor promises made to strangers) will still make credit transactions, but have to spend significantly more on enforcement mechanisms.
Well some would do it that way. But consider the possibility of cooperation instead of competition. Completely non-crippled software exists today already (open source). Crippling your software to make it scarce means it has to beat the competition by a larger margin. People must decide if the inconvenience is worth it. There's also the risk of a culture that detests crippling develops that "frees" your software, despite attempts at crippling (e.g. cracking games).
Also, societies unwilling to accept the zero-cost of copying will still have piracy,...
I could discuss the large scale effects of piracy (copyright infringement) for days! From a game-theoretical/utilitarian -, ethical - or any other perspective. I have a set of views and suggestions for topics that could be interesting to break down and address, but instead of writing a long post addressing many different topics, Ill start with the first one in my mind.
Just a thought:
For a subset of activities you could map the question of the ethical status of illegal downloading of a software p (preferred choice) to the existence of a certain kind of element a in a set S, which I'll call the set of alternatives (assuming the risk of getting caught is very small).
Lets say that you for some reason need a graphics editor and your preferred choice is Photoshop CS5. You could either:
In the case you have chosen to illegally download a copy of the software, some people would compare that to stealing (certainly the folks at Adobe). Would that really be fair to say? At least in my opinion that depends on whether or not you would have bought a copy in the absence of the 'download' alternative. Your preferred choice is indeed Photoshop CS5, but that is one among many choices, the rest being in the set of alternatives S. Most users with illegal copies wouldn't pay the 650$ when there are free alternatives. Those alternatives may be much less attractive with less features but many of them would still do the job.
So if there exist an a in S, such that you would prefer a over p in the absence of alternative 2, then in a game between you and Adobe, the choice a would not be Pareto optimal. Your utility is maximized by choosing p (downloading Photoshop), Adobes utility left unchanged. --> Maximizing total utility (ignoring potential side-effects, such as effects overall attitude towards piracy and so on)
Today there exists an S for almost anything.
Whats your opinion on this in regards to utility maximization (utility of society). Can we really break it down like this looking at the individual case?