Our supply-and-demand market forces are just the ticket for touts

Like the financial suits in the City, the low-lifes that pound the streets to sell tickets at inflated prices are performing a useful and valued service

As I flicked through the channels in a desultory sort of way, my eyelids drooping at each passing image of fat women trying to get thin or people of displeasing aspect spitting and swearing at each other, my attention was suddenly arrested by the sight of a mountainous man rising from green leather benches. He opened his mouth and the sound was of a subterranean rumble, a Vesuvius clearing its throat prior to an eruption. The guttural consonants, the choked vowels, the rolled r’s, all were unmistakable. You did not need PG Wodehouse’s dictum to tell you that this was not a ray of sunshine, it was a Scotsman with a grievance.

I had lit upon the Parliamentary Channel just as Jim Sheridan, Labour MP for Paisley and Renfrewshire North, had chosen to become active. I cannot recall his precise words, and I would have needed subtitles to be sure of what he said, but the gist was plain. He was cross, and the subject of his ire was ticket touts. His manner suggested that should one of these despicable specimens stray wittingly or otherwise into Paisley and Renfrewshire North he would leave with his head on a stick and consider himself lucky to have got off so lightly. I checked up and found that Mr Sheridan’s animus towards touts was not new. Earlier this year, he had called for government action to protect his daughter.

Yes, my friends, not even the offspring of the people’s representative is safe from the unspeakable machinations of the kind of people who stop you in the street and speak out of the corner of their mouths. (No, not market researchers, touts.) “She sat by the phone,” thundered Sheridan, “waiting for Take That concert tickets to come on sale, but the tickets sold out within minutes because touts bought them up and sold them for three times the price.”

One’s empathy wells, one’s eye moistens. Beneath the exterior of this vast chunk of Caledonian granite beats the heart of a loving father, a man who, seeing his daughter deprived of her dearest wish to have her hearing impaired, trembles with indignation and calls upon the heavens, or at any rate Jack Straw, for retribution.

But hold on a minute. Fatherly devotion aside, does Mr Sheridan have a point? It is true that in the league table of people you love to hate – estate agents, members of parliament, child molesters, badger gassers, journalists – a place must be reserved for the ticket tout (all other considerations aside, he is almost without exception an embodiment of low life), but isn’t this dislike more irrational than it is reasoned?

The case against touting is based on the assumption of the “fair” or “just” price. Aristotle believed in the fair price, but he was no economist. Market economics tell us that price is determined by the interaction of supply and demand, and fairness has nothing to do with it. If I have a ticket that I do not want, why should I not sell it to the highest bidder? If the price is agreed, he is happy to have a ticket that he wants, I am happy to have exchanged an unwanted asset for wanted cash.

But what of the blighters who bought up tickets to a concert they did not wish to attend, ahead of Miss Sheridan, who did want to go, and sold them at a profit? Are such people not rogues who drive up prices unfairly? Yes, they push up prices, but only when the promoters undercharge. Had the concert organisers pitched the price at market-clearing rates, there would be little scope for the touts to profit.

Touts flourish when the market is inflexible. Tickets are sold at prices fixed in advance with likely demand a matter of guesswork. Into this imperfect market touts introduce flexibility; if they see queues forming they raise prices; if there are few punters, they drop prices.

Whenever prices are kept rigid despite shortages and surpluses, the market fails in its function of providing equilibrium between buyer and seller. Loathsome they may be, but touts are speculators, and speculation – in securities, foreign exchange and others markets – is a useful and legitimate economic activity.

Touting is in the news because online dealing in the “secondary ticket market” is booming. Tickets are offered on eBay within minutes of events being sold out. The system is open to fraud and abuse and the buyer should beware, but it is bootless to try to buck the market. Tickets are worth what the buyer is prepared to pay and it is difficult to see how unauthorised selling could be stamped out. Touting will never be popular but it is preferable to queues, regulations, allocations, and general meddling by officialdom.

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