Mankiw's SOPA Metaphor is Wrong

One reason I'm O.K. with Romney is that he has Greg Mankiw as an economic advisor - and Mr. Mankiw is unlikely to want a Gold Standard or some other crazy thing that would throw the economy off a cliff. This is Greg Mankiw the Free Market economist.

Greg Mankiw the rent-seeker is way wrong on SOPA though.

He says:

it is as if organized crime were stealing merchandise from a manufacturing firm at the loading dock.

It's not like that at all actually. If I steal merchandise from a manufacturing firm, they lose something tangible. Let's assume this firm is producing something out of patent. Pink Flamingos. If I'm able to make an exact copy of the pink flamingo and produce and distribute it for free Greg Mankiw the free market guy would call this a productivity increase and praise it as the wonderful free market in action. He would never ever ever say that the government should step in and force everyone to buy pink flamingos from the more expensive company.

Now, Greg Mankiw the Copyright rent-seeker is really saying that HE loses money if someone makes a copy of his textbook. However, in much the same way he "loses" money if I buy a used textbook instead of a new one. He also "loses" money if I borrow the textbook. The only difference is that the government has defined that one is illegal and the other two as not illegal.

The reason the government has defined one as illegal is so that Greg Mankiw will be able to make a profit writing textbooks. It is in everyone's best interest if Greg Mankiw can make a profit writing a textbook. But there is a balance. Obviously most people think it would be ridiculous for the government to make borrowing textbooks and buying used textbooks illegal. Good for Greg Mankiw the rent-seeker, but bad for almost everyone else.