The latest news on enhanced enforcement of copyright law contains the usual claim from the government that “People should realise that the proceeds from the sale of these goods are used to finance a whole range of criminal activities.”
Sensible people usually ridicule these claims, pointing out that professional criminal activity is generally profitable in its own right, and therefore does not need subsidy from generous counterfeiters.
It is only fair to recognise, however, the plausible rationale behind the “financing” argument.
The likes of Ron Gainsford (the TSI chief exec quoted above) are using the word “finance” in the technical sense of “credit”. What is plausible is that criminal activity is somewhat restricted by lack of access to credit. If you turn up at your local HSBC and tell them you have a promising business opportunity based on robbing a jewellery shop, and you need a £10K loan to cover weapons, a getaway car, a rented safe house, and labour costs for monitoring the activity of the shop for a couple of weeks prior to the raid so that you can exploit this advantageous business opportunity, the bank staff are likely to be even less helpful than the guy in the annoying Nationwide adverts.
To enter a business of this kind, you either need to have the capital yourself, or know someone who has capital and is a criminal. Therefore the less profitable criminal activity there is going on around the place, the more difficulty criminal entrepreneurs will have obtaining credit.
Having recognised the argument, it is possible to dispute it. What is the total value of the trade in counterfeit or infringing goods, compared with, say, that in prohibited drugs. My guess would be approximately zero, meaning that the effect on the availability of criminal credit of effective enforcement would not be significant.
The finance argument also supports a liberal policy of reducing the number of victimless crimes. The most effective way of depriving criminal entrepreneurs of access to loans from drug dealers is to legalise drugs. Boots or Pfizer are no more likely to make loans to armed robbers than are HSBC or Marks and Spencers.
I have another unrelated point on the article which will follow shortly…