Markets in everything (not) Part 2

Of course it’s legitimate and desirable, but couldn’t he find a better mechanism?

Darren, I think you are attacking the weakest point in the defence of Geldof but I am not sure that the subtler parts of the example follow. I think claiming that Geldof is somehow against property rights with regard to concert tickets and that this is somehow indicative of wrongness of his views of development is stretchingthe point that mob rule is a bad thing too far. You might just as well bemoan the lack of protection of his freedom of contract that means that this was the only means of enforcing it and welcome the spontaneous and decentralised cooperation that helped it work in the end.

Hernando de Soto argues that poverty is exacerbated or perpetuated by a lack of effective property rights with the emphasis on effective. The Mystery of Capital is full of examples of effective property rights despite well established but inappropriate property rights. As such it is about the inability of the poor to own things and not of the rich to buy things. For example squatters rights in the US, or property rights that work only if you have enough money.

Violence is used in lots of ways and many things can be called violence. China has a successful deocracy and it, the United States and most European countries have used very large amounts of violence towards their own people and others at high points in their economic development. Freedom, Peace and Economic Prosperity are all good things but they aren’t the same.

Another way of viewing the concert is as an advertisement, positioning Geldof and his causes in the market for charitable donations. Forbidding resale of the tickets serves this purpose by emphasizing the purity of Gledof’s charitable “product.” Resale on eBay is thus harmful because it amounts, in a sense, to defacing Geldof’s advertisement.

A similar analogy would be sports events and rock concerts banning ticket scalping, because it serves the longer-term interests of the athletes and musicians to have their live events appear to remain with in the financial reach (if only barely in some cases) of the common man and woman.

Darren. It wasn’t in the contract that the vendor undertook to enforce non-transferrability. And there is no sane way of reading this into the terms. (If you are saying that any expectation one party might have and believe to add value to the contract should be read into it as an implied obligation on the counterparty then you are just wrong on the law and common sense.)

As for “all the other aspects of contract law” I would assume, in the absence of any specific arguments, that Live8’s lawyers probably knew what they were doing.

My point was that it is not clear on whose side the property argument is. I want to know why this is not how you see it. It isn’t a point of great importance to me while some poorly identified threat to property rights appears to be a big issue to you and many others.

It seems somewhat selective or ill-informed to pick on Geldof for this standard practice and where the issue is more urgent for him because he has only one concert to get things right. In what way is he not upholding the value of your ticket? By not demanding photos to print on the tickets? Come on, I think he has actually gone beyond normal diligence in this matter. It has taken rail companies months to get eBay to stop listing non-transferable tickets.

I’m not sure what your last paragraph is getting at. To me it looks like a limitation on the efficacy of freedom of contract which seems to run counter to the rest of your arguments.

Geez, abb1, see above. The tickets were always stated to be nontransferrable. Now Geldof is defending that part of his contract by means of the “massive crackdown” that you write about (which has in fact involved no police or courts at all). Geldof does not have to take the measures that *you* would like him to take in order to defend his contract.

I’m sure that Geldof could make the tickets even more nontransferable if he e.g. demanded photos from people. No one does this. Contracts usually depend on the willingness of people as a whole to follow the contract voluntarily, plus enforcement directed at the worst and most visible offenders. Which is exactly what Geldof is doing.

Lastly, the idea that Geldof is being “war-on-druggish” shows a complete devaluation of the actual problems of the war on drugs — in which people really are thrown into jail for years out of their lives — in favor of a vulgar-libertarian whine that you paid money for something and now it’s yours, all yours.

Rich, the point darren’s making is that Geldof’s “measures” consisted of *vandalism* against eBay, i.e. infringement on its property rights. No libertarian here or anywhere else has disputed his right to enforce his chosen contractual provisions by legitimate means. We may think such action is dumb; we may think that in practice even legitimate enforcement of such provisions is likely to be difficult and counterproductive; but that is simply not the same as thinking someone does not have the right to do it.

Is it clear that having the ticket is a property right? What if I choose to think of it as an invitation to a private party (given,
admittedly, in an unusual way). Is such an invitation a piece of property, alienable by the invitee as he or she chooses? Most of us would say, not at all–the invitee has no “rights” in the invitation. Perhaps this just reinforces the main point, which is that viewing all social interactions through the property lens is invalid (I’d like to use a much stronger term, but won’t). That the ticket came with a contract does not invalidate this interpretation.

Bob Geldof should have printed the names of the ticketholders on the tickets and printed a message that ID would be required for entrance. He could have gotten lots of volunteers to check IDs. He could have gotten the ticketholders to check other ticketholder’s IDs.

He didn’t think of this and he is trying to blame his lack of foresight on eBay. Ebay is acting within their rights to be the market for tickets. The tickets would go to people who really want them and not to people who are merely lucky and didn’t care so much about the concert. If you wanted to go to Live 8 and cannot afford the price of the scalpers then tough. No one owes you a ticket to a concert.

What irritates me so much about Geldof is his whole attitude. Who was this guy before he started his anti-poverty crusade? He is the one who is made a career out of the misfortune of others, not the people of eBay. And the misfortune of others includes he own bandmates (quick question, does anybody remember the name of Geldof’s band?… I didn’t think so) are suing him for non-payment of royalties. Nice guy.

I have long since concluded that most libertarians have no real grasp of economics.

Matt 7:5.

The ones fulminating abut this, for instance, have shown no awareness that this is part of an iterated Prisoner’s Dilemma, rather than a single one.

It’s an iterated game, but it’s not a PD. In PD, there’s a dominant strategy. In this game, it’s worthwhile to enter only if the number of other entrants is below a certain point.

Anyway, it’s not clear that the fact that the game is iterated makes much of a difference. Mr. Quiggin’s conclusion above is the same as mine was: scalpers will, to the extent that they can estimate participation accurately, enter the lottery in numbers sufficient to reduce the expected value of a lottery entry to the entry price. Subsequent iterations will simply improve their ability to measure this.

To summarize: Despite what you might think, not every sentence containing the terms “iterated” and “market failure” leads to the conclusion that libertarians are idiots.

What this sorry episode shows is that they aren’t even defenders of contract.

This is simply false. I, among others, have said that they have the right to enforce the provisions of their contract and even suggested a mechanism by which they could do so. What we question is their right to force third parties (eBay and taxpayers) to help them enforce these provisions when they have themselves made no significant effort to prevent transfer.

It’s a version of “Officer, by putting such a lousy lock on their ATM, the bank might as well have just left the money there. How can I be blamed for stealing it when they didn’t take good enough precautions for keeping it?”

There are two problems with that analogy:

1. Stealing money results in clear harm. It’s not clear that scalping actually harms event organizers, and the fact that they do very little about it other than whine casts further doubt on that proposition.

2. I don’t think it’s appropriate to use taxpayers’ money to protect the property of people who routinely fail to take basic precautions (such as using locks) to protect themselves.

I also have a few points to make about the post itself:

1. If the purpose of the concert were to give a cheap concert to poor fans, then I could understand objections to resale. But it’s not. The (stated) purpose is to garner political support for an aid package.

2. The idea of auctioning tickets is not subject to the same criticism. With resale, scalpers capture some consumer surplus. You are correct that some musicians may be unhappy with this. With an auction, all profits go to charity, so the musicians have no cause for complaint.

3. Your argument about nonmonetary motives suffers from the same lack of clarity as Mr. Farrell’s. The premises are vague, and the steps linking them to the conclusion are even more so. I believe my objections to Mr. Farrell’s argument (see comment 33 in that thread) apply here as well.

Nicholas Weinginger said: the point darren’s making is that Geldof’s “measures” consisted of vandalism against eBay… No libertarian here or anywhere else has disputed his right to enforce his chosen contractual provisions by legitimate means.

No, this is clearly not the point the Darren is making. He said that Geldof did not have a legal right to enforce the non-transferability term in his contract.

Darren said: Thus, if [Geldof] isn’t prepared to uphold his part of the contract isn’t he in breach of tort?

As I said before, I really wish you libertarians would decide whether your guiding principle is freedom of contract or markets uber alles.

“No, this is clearly not the point the Darren is making. He said that Geldof did not have a legal right to enforce the non-transferability term in his contract.”

Also … “while some poorly identified threat to property rights appears to be a big issue to you and many others” if it is my property I would expect to dispose of it as I saw fit. If there are contractual constraints upon the property I would expect reasonable effort to be applied in order to uphold those constraints. Why is it tacitly acceptable, in effect, to sell the tickets down the pub but not on ebay?

[Touting] tickets isn’t a crime (except for football). It may be a breach of contact by the seller but it’s not true that the “auctions were illegal”

Not now, but might be soon…

“quick question, does anybody remember the name of Geldof’s band?… I didn’t think so”

Boomtown Rats. I can even remember some of the songs if that’d help jog your memory.

James
Well it depends upon what you think the crime is and what counts as illegal. Selling the ticket does not transfer the right of entry so the vendor is selling the ticket for its phsical value, is purporting to sell something that he is not in fact able to sell to an unwitting vendor or the purchaser is buying the ticket in the knowledge that the ticket will enable them to gain access by deception. The first is I guess least likely.

The criticism made by Brandon and darren, already very different from the criticisms of Geldof that sparked this debate, is that Geldof has not done enough to enforce this contractual obligation. I think this is arrant nonsense but accepting this point for a moment, surely the same goes for eBay and the ticket vendors. In any case it took the rail operating companies to stop resale of train tickets on eBay and Geldof doesn’t have months.

Brandon, it is very hard to be specific in making the point about the role of non-monetary values when the criticism on economic grounds has not been made.

First of all almost all vendors of tickets disagree about the desirability of aftermarkets and auctions, even the ones aiming at profit maximisation, so you are bucking the market in revenue maximisation ideas. Secondly I think the repeated game point is that sometimes there is value in pursuing a policy that is not in the short term revenue maximising for reasons of time consistency perhaps. This criticism may have resulted from an atempt to see what the point of the criticism was. Finally there seems to be a desire to leap from criticism of his handling of ticket reselling to his views on the responsibility of the G8 towards the poor of Africa. To this extent the critics are somewhere to the right of Paul Wolfowitz.

As far as the non-monetary values point goes in this case, the artists are giving up their time because of their belief in the cause, not to proide a living for ticket touts. If commercial considerations did not make a difference we would all be buying cars from charity car dealers and shopping at charity supermarkets. The limited impact of affinity schemes is a demonstration of the costs of commercial involvement.

There is nothing vague about the blood example. Volunteer blood donoation schemes provide higher quality blood at a low price. When it gets paid for you get blood from junkies and the homeless, you have to pay for it and the volunteers stop.

Who was this guy before he started his anti-poverty crusade?

The guy who sang “I Don’t Like Mondays” and played Pink in The Wall. I’m not a fan, but that role alone is going to ensure a footnote in history for a long, long time.

Rich;

I know exactly what I’m writing. Hacking into a computer system is a crime. That is what Geldof said he wanted people to do. You’re reading things into my message that only exist in your mind – perhaps you’re the one who should stop to think about what you’re writing.

Jack;

“I agree that Geldof’s language is inflammatory but to claim innocence for the ticket vendors is just perverse.”

I can’t see how a contract entered into between the concert organiser and the ticket buyer is binding upon a third party (eBay). It’s like if I leave my job before my notice period has expired and go to work for another employer. That’s breach of contract between me and my former employer, and is between me and them. The contract isn’t binding upon the employment agency that got me the new job or a new employer. I can’t see how third parties can possibly have obligations under contracts they never signed, and may not even be aware of.

Ebay’s train ticket policy is very interesting and I’ll try to follow it up.

An important point that no one seems to have noticed is that Live8 is not a fundraiser, and tickets to it were essentially free (the only charge was one pound 50 to send the text message). The purpose of the concerts is to raise awareness of the plight of poor nations and put pressure on the G8 to endorse debt relief. So arguments about how much money was or was not raised are completely beside the point.

Obviously if eBay was knowingly abetting breach of contract, they’re in the wrong. Doesn’t mean that massive fake bidding is a legit response. Was eBay served with a cease-and-desist letter over its auctions of the tickets? If so, did it negligently fail to respond according to the usual standards for response to such letters?

BTW, nitpicking over what Darren did or did not say is best left to Darren; that’ll teach me to try and clarify a point made by someone other than me.

Rich;

The quote is: “If there are any hackers out there, I would say they should get in there…”, though most media outlets did concentrate on the fake bid side of things.

I’d agree with Jr here. The tickets being sold to Live 8 are not the property of the people that won them; they remain the property of Live 8. They are not transferrable under the terms of the agreement, and that is that. To sell one on Ebay, or whereever, is fraud. It is analogous to renting a car from Hertz and selling it to someone.

I see some libertarians have misunderstood the motives of the organizers. Some people think the point of the concert is raise money. Under this assumption, it would have been better to sell the tickets for more money. However raising money is not the point of the concert according to the live 8 site. It’s to “raise awareness”, and although I don’t have an opinion on whether or not allowing resale would help or hurt “awareness”, clearly the Live 8 organizers think it would hurt.

I do want to note that in clamping down on resellers, they’re doing a great job of raising awareness. Brouhaha! Free publicity! Some people are saying they should have done more to prevent resale. Pictures or names on the tickets. But that’s expensive, plus, it would have cut off this teacup tempest. Why not take the free publicity?

It’s worth noting that the issues of resaleability and raising money are independent; Live 8 could have chosen to auction tickets and allow resale, or not; either way they’d have raised much more money from the ticket sales.

“BTW, nitpicking over what Darren did or did not say is best left to Darren;”

Even then, Darren’s prose isn’t necessarily the best in the world and is sometimes confusing. Neither does it help when the issue at hand is emotive.

Brandon, airlines have had a go at “rational” pricing as in full short run optimisation but have backed off.

It is not necessarily irrational to resent price gouging if the resentment prevents it. If in fact this is a social loss then it is a coordination problem and a whole different ball game. By that I mean neither side is likely to benefit by changing all by itself.

I think that you aren’t being as curious as you might be about possible reasons for this not being popular. For example vendors might want a direct relationship with the customer for mailshots and the like. They might want people to know how much they might have to spend on tickets so that they can plan to make the time and money available — airlines definitely had that problem. Customer enjoyment might be lessened by diferent prices — The adverse selection problems caused by high ticket prices aka the prawn sandwich effect. Trust generated by comparability of prices. I could go on.

As an experiment, how many things do you know the right price for? What is the most you would pay for the water you consume this week?

What better way for Geldof to raise awareness for poverty then by providing the means for us to showcase our amoral entrepreneurial spirit? Scalp away.