Free software can do things that non-free software cannot. For example it can be copied and run by people who do not have money to spare for software. The practice of licensing software in a way that restricts copying is isomorphic to defection in the prisoner's dilemma: it benefits the individual at net cost to other similar agents.
If I expected all (or almost all) other agents in the marketplace to be similar enough to behave exactly like me, I would pirate software to punish them. That would cause all proprietary software businesses to fail, and only free software to be developed. Unfortunately, if only some people pirate, it represents a form of advertising which causes other slightly dissimilar agents to purchase it. So I am best off not pirating.
The optimal solution seems to be to use exclusively free software, and to consistently donate money to the development of free software, so that they will be able to reach difficult design spaces. There are probably enough similar agents for this to work.
On the other hand, it may make sense to encourage an agent to pirate software if I know they would otherwise be likely to purchase proprietary software, as the advertising properties of a free copy probably do not exceed those of a purchased copy.
Free software can do things that non-free software cannot.
I didn't claim otherwise. I said that intellectual-property-respecting societies can have both "free" software and proprietary software, while those that don't respect intellectual property can only use the free (or "trade secret"/Omerta) model.
They (the IP-non-respecting society) would certainly come up with a Microsoft Word-equivalent, but do so later and with less refinement on difficult features. As time has value, the later arrival of word processing software comes at a...
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?