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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 Writers Group. May not be republished without permission.


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