Dean Wesley Smith's Life After Copyright is a collection of scary scenarios like those used to justify the various bailouts and stimulus packages, and you can probably guess I think he's wrong. I know the world would be better off without copyright, indeed with out any intellectual property rights, just as I know that bank runs aren't the most dangerous thing in the known world that we must avoid at all costs. Let me give my predictions of what would happen if copyright dissappeared from the earth.
Lawyers begin to realize that they need to go get respectable jobs. They can no longer (assuming all intellectual property rights dissappear) use an artificial property right as a pretext to take real property from others. The cost of doing business plummets and companies everywhere can put out a product and market it without worrying about getting hit with a lawsuit.
Publishing houses, already pretty divorced from the industry of printing, embrace their new role as agents and publicizers. They need solid authors, so those with strong track records get good contracts for a number of books per period of time. New authors will likely go the print on demand route, but agents will be scouring the POD market, looking for those with talent.
The knock-off market is around, but it only serves as free advertising. Electronic copies are still annoyingly unsatisfying. Cheap, knock-off copies in print form show up after the original product comes out, and they serve also as advertisement. Many people who choose to use copies would not have bought the original in the first place, and if they like what they read, then they are actually more likely to buy the original. The fans of the author will buy the original, usually before the cheap stuff comes out.
At some point along the way someone tries to sell a book allegedly by a famous author. The famous author, meanwhile, says no it's not his work, or that it has been altered. This publisher is sued for fraud and loses the case. It becomes apparent that one can sell a faithful reproduction but selling stuff that isn't actually from whom you said it's from isn't okay. Suddenly those misguided souls who keep warning the entire world will implode because copyright doesn't exist anymore realize that perhaps they are a bit over the top. Publishers willing to invest in authors consistently make good profits, while the cheap knock-off companies find it hard to make any profit because most of the people actually interested in reading the author's work have bought it before they get the knock-off off the press. In addition, the publisher regulates public access to the author- events can be very lucrative.
So, at this point you may notice I am assuming something DW Smith isn't; all intellectual property is gone. You can get a pdf of Against Intellectual Monopoly by Michele Boldrin and David K. Levine if you click on the title, for they actually practice what they preach. You can also listen to Boldrin on Econtalk, and, of course, there's Stephan Kinsella's Against Intellectual Property, also a pdf.
I am also assuming what is going on right now on the internet will continue and even explode forward; as the cost to create plummets, more and more people create more of everything. The good media generators, whether they are actors, musicians, writers, or journalists will either build up an audience on their own, or whatever the publishing/entertainment/news industry morphs into will get smart enough to spot and contract with good content creators early.
Perhaps what is most important is the value returned to the very people who need it most; the poor. What little they have now is valued at even less because we are valuing the intellectual in an artificial way, against the real. Why is this a problem? Resources are continually being diverted to people who have this government fabricated property right, and it doesn't take a rocket scientist to figure out the poor generally aren't among them. We will likely never know the total effects, but just looking at one I.P. case, like the ghastly amounts of money SCO spent, basically destroying itself as an entity in an attempt to prove I.P. rights with regard to Linux, and realize that's just a tiny drop of the resources destroyed in this sad and pathetic game of destructive behavior. Lawyers, as well as certain companies that do little more than initiate lawsuits based on I.P. portfolios are not producing anything of value for the economy.
Authors, on the other hand are producing something of value. In fact, they may be among the very first to experience a beneficial re-allocation of resources, as publishing houses realize they no longer need to keep the lawyers on retainer.