Before we proceed it is important to define the difference between the pirate and the bootleg.
Put simply, a pirate is merely a copy of an existing album. The bootleg is a recording of material not generally commercially available. Finally you must also consider the forgery. This is where rare and collectable items are copied with the intention of deceiving collectors and selling the copies at a premium price.
While Collectors have a healthy respect for the bootlegger, piracy has few friends. Pirates are generally second generation copies, while the fan may get a pirate cheaply, they are unlikely to get a quality recording, even less likely to get the full sleeve and artwork. Additionally, the artist will get no royalties for the sale.
Piracy goes back a good way, however it has got easier for pirates to operate as new media have developed.
Early pirates mainly came from the Far East, particularly Taiwan. They were poorly pressed vinyl LPs, in thin paper sleeves. These recordings were not illegal in the countries of origin and were sold openly to tourists and merchantmen. From the mid 60s onwards a small trickle of these records found their way to Europe and the US. In spite of their historical significance and the fact that relatively few will have survived, these records are not very collectable.
The advent of the Cassette greatly widened the amount of piracy, The fact that a cassette retailed for as much as an LP but was much cheaper to produce gave piracy added momentum. New markets developed across the Far East and in many Middle East countries, by the early 1980s pirates in these countries even carried their own brand names and openly altered the packaging of the titles they sold.
Within the UK Pirates gained a foothold with quite convincing cassettes for sale on many Sunday markets and Boot Sales. These tapes often had only part of the inlay, and the tape itself carried the simple message "see inlay card for details" The temptation to the public was considerable, with pirates selling for less than a third of the price of their legal counterparts.
The record companies fought back, putting holograms on some cassettes, and imploring people to contact their anti piracy hotlines, however they could do little to stop people buying the even cheaper pirates available at many holiday destinations.
The advent of the CD opened up new options. Reportedly every CD pressing plant marked the discs it made with a unique code to prevent piracy, if this was true it did not seem to work. By the end of the 80s quite convincing CD pirates started surfacing, reportedly manufactured in Ireland, Like the cassettes their downfall was the "see inlay card for details" printed on the disc and the incomplete inlays. CD piracy developed in new areas of the world, particularly the former Soviet Block countries and China
Rumours have circulated of pirates so good that they have been slipped into the distribution process and sold unwittingly by major record shops, Warners in particular have printed holograms on their CDs as a way of fighting this threat.
The CDR has become the format of choice for the Internet Generation, and the pirates have followed close behind. While a CDR pirate may not look like the original, it is cheap to make, and can be manufactured in small backroom operations which are hard to stop. In 2001 the record industry estimated that up to 1 in 3 recordings sold Worldwide might be pirates.
News Story on BBC June 2001
Buying a pirate is only really an option if you cannot afford the original..
On a purely selfish level you must consider that a pirate will probably never appreciate in value, the lack of interest in those early pirate LPs clearly shows that collectors have little interest. On another level, whatever you think of the global record companies, they do pay royalties to the artists you like, manufacturers of pirates do not; they are wholly parasitic on the music industry.