This link points to another recent Discover magazine blog, “Paying For Creativity,” where there is an interesting discussion of how different people view the act of downloading digital information (songs, etc) without paying for it. Some people argue it’s theft, and some insist that it’s not. Apparently digital information is like pencils: People regard the object as different from the cash equivalent.

Basically, the $10 in pencils isn’t actually worth $10. They cost $10 at the store, but most of us don’t currently want to buy $10 of pencils. Instead, we wait until our need for pencils (demand) increases to the point that we’d be willing to part with that money. Before that point, our valuation of the pencils lies at some point below $10.

In contrast, as a median of exchange, $10 represents $10 of value in any context. I can get $10 of cheeseburgers, or $10 of video games, or $10 of clothing. Whatever my specific need is, a $10 bill gives me the ability to fill it if someone is selling for $10 or less.

In essence, the money represents not $10, but every single thing I could ever spend $10 on, including those pencils. The pencils, however, are just one of those things I could spend $10 on, and I cannot exchange them for something else worth $10. You really are stealing more from someone if you steal their cash rather than their stuff. I would imagine it feels worse to us because we intuitively understand that we’re taking more value from someone when we take their money.