Paul
Ibrahim
Read Paul's bio and previous columns
July 6, 2009
How the Free Market
Would Save the Michael Jackson Memorial
With some 1.6 million fans registering for the chance of winning 8,750
double-tickets either to attend Michael Jackson’s memorial service at
the Staples Center, or merely to watch it on a big screen in the
adjacent Nokia Theater, only one in 183 fans will succeed in receiving
the marvelous e-mail and two tickets to the memorial.
That makes the memorial decisively not “free”. Sure, technically, there
is no cash payment going directly from the fans to the event organizers
(who are paying the costs of running the event, by definition making it
not free). But the risk that the remaining 1,591,250 individuals (not to
mention their relatives who share a single computer) were forced to
take, and their inability to even try to acquire tickets for the
memorial service in any other way, is very, very costly – even if the
cost is not readily visible.
Indeed, “there ain’t no such thing as a free lunch” is a true statement.
There is no possible way to make the memorial service truly free. But
there is a way to distribute the tickets in a manner that is profitable,
value-maximizing and fair in providing the most dedicated fans with an
opportunity to attend the event.
Auction off the tickets. And if that is impractical, sell them at the
best estimate of their market value.
I
can hear it now: “You greedy elitist! How dare you inject money into
Michael Jackson’s memorial service!”
The fact is that many more people wish to attend the service than are
able to fit in the venue. It is also a fact that no person knows, or
will ever know, which 17,500 people feel the strongest about the
service. Thus the best way to discriminate in favor of those who most
desperately wish to make their goodbyes and against those who merely
think it would be a fun experience is, in fact, to increase the price.
A
40-year-old who idolized Jackson at the peak of his career and has fond
memories of his concerts would, indeed, be willing to pay far more for
memorial tickets than a 16-year-old who has barely heard of Jackson and
signed up for the ticket lottery because “it would be like totally cool
to be on TV.”
Whereas an auction or a high price rewards the most willing and
deserving fan while weeding out non-fans, a random distribution of
“free” tickets gives both of these individuals an equal chance to
attend, regardless of their admiration of Jackson. And no Jackson fan
could possibly believe that is fair.
The sale of tickets would benefit both the buyer, who by definition
values his attendance more than the money, as well as the seller, who
recoups his costs and maybe makes a little more (in this case, the
family could choose to either keep any profit or give it to charity). A
sale of tickets would also result in a more appreciative and more
engaged audience. Who is likely to give and receive higher value at the
event, someone who lucked out merely for submitting an e-mail address,
or someone who actively made a monetary sacrifice to purchase a ticket?
But most importantly, an auction, or a sale approximating auction
prices, would give almost all people a real chance to get a ticket, as
opposed to imaginary lottery odds. Sure, for some, the monetary burden
would be greater than for others. But to those of any economic
background who are sincerely the most desperate for seats, an almost
certain opportunity to purchase an expensive ticket is far superior to a
1-in-183 chance of receiving a “free” one.
Yet in a society that has developed a collective feeling of entitlement
to things that appear, on their face, to be free, we have become willing
to sacrifice true value if it necessitates anything more than a one-step
thought process. This can be seen in the outrage that erupted when word
leaked out that the Jackson family was considering charging a tiny $25
per ticket in order to defray the immense costs of the service.
But virtually nothing is free. Someone is always paying, and more often
than not, it is you. If you demanded that the Jackson tickets be given
out for free, you are paying for it by reducing your chances of
attendance to one in 183. If you supported the federal government’s
decision to spend $800 billion on “free” “stimulus” goodies, you will
have to pay for it in higher taxes and lower income for the rest of your
life. If you support “free” health care, you will have to pay for it in
higher taxes, longer lines, lower quality and six-month waiting periods
to see doctors.
But “free” is not always a bad word. Because even though resources
(whether consumer products, medical care, or tickets to the Jackson
memorial) can never be truly “free,” they can be allocated in the
cheapest, most efficient and most value-maximizing way through the
free market. The beauty of free market principles is that, like
science, they are not selective. They do not only work as grand abstract
ideas in the national economy. They work everywhere. And they are always
reliable.
© 2009 North Star
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