Lies, Damn Lies, and Intellectual Property Statistics

Welcome, Julian Sanchez, to the Alice-in-Wonderland world of trying to track down widely-cited statistics to their original source! I tried and failed with counterfeiting statistics; Julian has now tried and failed with estimates of lost jobs and money due to intellectual property theft. So if anybody, ever again, tells you that IP theft costs the economy $200 billion a year, just guffaw and point them at Julian's article.

Julian even allows himself to get deliciously wonky at the end of his long and serious article:

All the projections we've discussed, the rigorous and the suspect alike, calculate losses in sales or royalties to U.S. firms. This is often conflated with the net "cost to the U.S. economy." But those numbers--whatever they might be--are almost certainly not the same. When someone torrents a $12 album that they would have otherwise purchased, the record industry loses $12, to be sure. But that doesn't mean that $12 has magically vanished from the economy. On the contrary: someone has gotten the value of the album and still has $12 to spend somewhere else.
In economic jargon, charging anything for pure IP--which has a marginal cost approaching zero once it has been produced--creates a deadweight economic loss, at least in static terms. The actual net loss of IP infringement is an allocative loss that only appears in a dynamic analysis.

There's much more where that came from; do go check it out. We need much more of this kind of thing -- but we won't get it, because faced with the vested lobby dedicated to entrenching the bogus statistics, no one but a few ornery journalists seems to care that they're demonstrably false.