Strange ways indeed (most peculiar markets)

Australia is not some banana republic backwater any more. We are a big fat rich nation of big rich fat people who will fork out $2000 for their kids to see Justin Bieber if they have to. But they don't have to – they choose to.

If you want a ticket to see Jerry Seinfeld's sold out show in Sydney it will cost you about $500 for a ticket that was bought by a scalper from Ticketek for $100.

While everyone bangs on about the unfairness of it all - am I the only one who wonders why the tickets are so cheap in the first place? $100 is four packs of cigarettes. It is two cases of beer or less than two tanks of petrol.

The actual market value of the ticket is $500.

Imagine a car dealer inexplicably selling you a new car for $6000 that is for sale at the dealership down the road for $30,000. Wouldn't you stop and think that something was a little odd about that? (Then Nick Xenophon comes along and yells, STOP THIEF!! when you try to re-sell the car for what it's actually market value.)

Inexplicable also is how Tiketek chooses to allow this kind of scalping when it clearly doesn't have to. Tickets to my local festival Splendour in the Grass are not scalped despite overwhelming demand for tickets means they sell out in 12 hours or less. Their agent Moshtix simply does not allow direct re-sale of the tickets. Each ticket is booked in a person's name and address which cannot be changed. Unwanted tickets can only be sold back to Moshtix minus a fee of $20.

For the same reason Jetstar air tickets are not scalped - despite that they release small quantities of tickets at very low prices from time to time. Jetstar uses the same “paperless” ticket as Moshtix but allows you to change the name of the passenger. There are deadlines for name changes though and the fee they charge will negate much of the profit from scalping. Their tickets are not refundable. And as Jetstar handle the changes they will know what you are doing and can easily shut you down and bar you from flying with them – forever.

So why does Tiketek choose to do business in this way? Why don't they just sell the tickets for what the market will pay? (These questions are not rhetorical, by the way, if you can answer either of them please do).

But the cat is now out of the bag and we all know what riches await us if we can just get out hands on one of these golden tickets. If Nick Xenophon were to get rid of those damn ticket bots then you and I could become home-grown scalpists. Even if I'm limited to purchasing only four tickets per show, by investing $400 I can make a profit of $1600 - then I'm in and you should be too.

'Cause you're free to do what you want (any old time).

Freedom vs market interventionists, scalperbots and Adele

Serial market pest Senator Nick Xenophon is at it again. Poker machines again? No it's ticket scalping prompted by Australian politicians' bi-partisan love for Adele and the fact that a ticket to see her recent show cost as much as $5000. 

Put simply - this is because only a small number of tickets are available to the public and the bulk of those seem to be snapped up by scalpers who go on to sell them for huge profits via the internet. 
 

This is an example of supply and demand economics - when demand outstrips supply prices go up. As profiteers move in prices go up some more. This has been a feature of the free market economy for some time now and is well understood by Year 10 students everywhere.

However, this being 2017, scalpers are thought to be unfairly aided by software 'bots' which are conveniently taking the heat for the situation.

Being a federal Senator and a market sceptic Nick's solution is, of course, market intervention through federal legislation. Firstly by following the US which last year passed the Better Online Ticket Sales (BOTS) Act and banned these digital daleks.

Ticket bots are basically hacker's tools that can be downloaded from the internet. Banning them would be like banning a virus, or outlawing hacking. Or banning crime.

There is so far no evidence that this legislation has affected ticket prices. No one has been charged let alone convicted under the Act.

Nick has his own ideas though none of them could be described as bright. Such as allowing tickets to be re-sold only when where a ticket holder has a legitimate reason to do so and dis-allowing tickets to be resold for more than 10 per cent profit. Really, Nick? Do you really think such nonsense could be made law?

If it could - we would end up with is a taxpayer funded Fair Ticket Pricing Commission. The Federal Police will need a Ticket Scalping Strike Force with offices in every state. Teams of hackers would be employed by the government to fight the scalperbots in cyberspace. All paid for by you and me. Would it affect ticket prices ? Unlikely. But even if it did, you and I would be subsidising concert goers to the tune of tens of millions of dollars. 

Luckily for us all - Nick Xenophon speaks softly and carries a small stick – for he is just a Senator and cannot put forward a bill to Parliament. He can only put forward a motion which is a statement that other Senators can agree or disagree upon, and that's it. Such motions carry as much weight as the belligerent utterances of a drunk as he slides off his barstool to the ragged cheers of rival barflies.

Xenophon is, and always was, a cheap populist hack.

Politicians commonly branded as populists, like Trump and Hanson, actually have ideas about society and government – big, weird ideas that make them saviours to some and devils to others. Nick Xenophon is a true populist in that he keeps to the centre to please as many voters as possible and kindly offers to legislate against anything that might vex them.

But those who seek to make laws purely to increase their popularity are the enemies of liberty. Every law they make takes away our freedom. And as we only have the right to do what is not prohibited by laws – our rights are taken away too.

Government interventions into the energy market have stuffed it up, particularly for those in Nick's home state of South Australia. Nick's solution – more interventions to stuff up the old stuffed up interventions.

To do this he waved his little stick at a weak government and took tax reform hostage to force his interventions upon us. Tax reform meaning - the lowering of our taxes. His little stick just got a little bigger.

So don't encourage him. Don't vote for him. Don't fall for his populist bullshit.

Remember you are free.

More on the complex issue of ticket scalping to come. In the meantime check out,

 

http://www.abc.net.au/triplej/programs/hack/a-ticket-scalper-explains-the-rip-off/8344484