The Rand Corporation has published a report linking the proceeds of infringement (of films) with funding of terrorist groups. This is a meme (infringement funds organised crime/terrorism) which copyright ideologues have been pushing for many years, with varying degrees of success. The argument is that if it funds terrorism then something must be done to stop that flow of funds. Ideologues then argue that this means that the scope of copyright and the penalties for infringement must be ramped up. Such an argument is without a basis in logic.
We can concede that copyright infringement is a source of funding for terrorism and organised crime. We can also concede that something should be done about it. It does not follow that what should be done is to ramp up the copyright monopoly (by granting greater monopoly coverage or greater penalties for infringement). Indeed, the presence of the monopoly is the only reason that infringement can be a source of funds for these groups. Without it, the price for the goods would be the marginal cost to produce (and there is no reason to believe that these groups have a comparative advantage here).
By definition, the fact that something is illegal does not stop organised crime and terrorists doing it. On the contrary, they do more of it. All that ramping up the monopoly does is reduce competition from softer targets. This means that criminals and terrorists are able to make more money, not less, and the share of revenue from infringing practices will be more weighted towards the organised criminals and terrorists. For example, the student who makes some money selling infringing copies at the local market stalls reduces the amount of profit that organised criminals can make. It is this sort of soft target who will be removed by ramping up the monopoly. Does anyone honestly think it’s better that this money goes to a terrorist rather than the student?
Does anyone honestly believe that people who are actively planning to commit mass murder are going to be deterred by a jail sentence for copyright infringement?
That terrorists profit from infringement is an argument against copyright, not an argument for more copyright.
 Which the report duly does: “The RAND report says that counterfeiting levels are not likely to decline unless governments worldwide commit more resources and create greater accountability for intellectual property protections. Such a commitment would need to produce stronger anti-counterfeiting laws, consistent enforcement against pirating and stronger penalties, including larger fines and prison sentences.”
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