Labour’s plans to intervene in the market for Oasis tickets betray a basic ignorance of the principles of supply and demand, says James Price
So, Sally can wait – and wait and wait online for Oasis tickets. Or Taylor Swift, or whatever a Charli XCX is. That’s what happens when there is lots of demand for something, especially if that demand exceeds supply. If prices aren’t set at market-clearing levels, there will be a shortage and goods will have to be allocated by something like a queue. If this sounds like I’m “mansplaining” then guilty as charged. Because it seems that the new Labour government is living down to the worst expectations of economic illiteracy, and someone has to explain it to them.
Minister after minister has valiantly taken time out from claiming it has the worst economic inheritance since World War Two to weigh in on the true evil facing Britain; ticket resales. Amidst the very real challenges the UK faces, some of the biggest victims right now, according to the government, are those who could afford to spend £135 on a gig ticket, but not £350.
For a government to say that on the one hand things are so dire that they simply had to cut the pensioners’ winter fuel allowance and on the other that it must intervene to protect the disposable income of middle aged Brit Pop fans is absurd. Perhaps it did not occur to Labour that consumers could freely choose not to see a band that famously endorsed Tony Blair.
In retrospect, the writing was always on the Wonderwall; one former Labour cabinet minister once lamented of Ed Miliband’s team that: “Their view of a market is a mechanism for businesses to abuse or to inflate prices and fleece consumers”. And pensions secretary Liz Kendall once asked why “fares at peak times are most expensive when in fact [sic] should be cut price to compensate people for it being the most god awful [sic] miserable time to travel #justsaying”. At least Ms Kendall had the good sense to pretend she had been joking, presumably shortly after half of Westminster explained to her how prices function.
Nationalise Liam and Noel!
Concerningly, some surviving Tory MPs have also decided that Ticketmaster can be considered a monopoly “especially given the demand for these tickets”. We are not so far away from a private members bill to force Oasis to perform, night after night after night, until everyone is sicker of them than Liam and Noel are of each other.
An alternative could be to break them up into multiple Oases, as economist Kristian Niemietz has suggested. Though his colleague at the Institute for Economic Affairs, Steve Davies, has responded that this already happened in 2009, leading to a distinct loss of market value.
The fact is that this is none of the government’s business – live concerts are a rare, unbanned joy in Britain, but they are also one of the only ways artists can make money anymore. Wrapping ticket sales up in red tape will only make this harder. The government should leave Champagne Supernova alone and stick to the champagne socialism.
The bigger concern is that so few ministers have worked in the private sector and thus lack the instinctive understanding that markets are not instruments of evil: at worst they are amoral, at best they generate the innovation and prosperity that sustains our way of life. At all times they are a very effective way of determining what people are prepared to spend on things they want. I may be biased when I say this, but the Price is always right.
James Price is a former government advisor