A previous posting, “Lining Up or Paying,”[1] cites a dilemma in capitalist economies. That is, in distributing goods and services, should the provider institute a queue system – first come, first served – or a competitive pricing system in which a price is set at a level for which the seller draws the highest profit possible.
The first option does usually allow people from varied income groups to be able to attain the goods or services but leads to various practices – like scalping – undermining such an outcome. The second, from the outset, excludes those who cannot afford the price, usually lower income people.
Now, for most goods and services, competitive pricing leads to more efficient production and distribution strategies. Yet, especially when one is speaking of essential goods and services, the inability of the poor or the not so rich to afford necessary goods and services is a problem. Enough of that and one creates a disruptive social landscape – one might ask: how much of that is responsible for the nation’s current turbulent politics?
The end of the earlier posting referred to above left readers with the following paragraph:
This posting is not an argument for dismissing markets and pricing options in general. Many advantages are derived from applying that approach to most products. … And one can readily identify how many (most) aspects of life are better with markets than without. But as with most things, there are limits and one should be able to acknowledge where and when markets fall short.
Here, the work of Michael J. Sandel is seen to be helpful. He asks which products should be provided by a queue (or other) system and which ones should be provided by a market system. He claims that to answer which products should be sold one way or the other, one should consider what sort of product it is. How should it be valued?
To address this concern, he writes:
Figuring this out is not always easy. Consider three examples of “underpriced” goods that have recently given rise to ticket scalping: campsites at Yosemite National Park, open-air masses conducted by Pope Benedict XVI [the reigning pope of this citation], and live concerts by Bruce Springsteen.[2]
Each of these cases demonstrates a different aspect of this basic question – which form of availability should be employed? And by reviewing them, Sandel sheds light on an aspect of American (of capitalist) life which affects how meaningfully a nation can promote a partnership sense – i.e., a federated sense – among that nation’s citizenry.
Yosemite Park is a popular place. As a national park, its policies, such as setting an admission price, are a government operation. Since the park belongs to the nation’s public and the nation claims equality as a central value, the admission fee is set low and that includes fees for campsites.
As of the publishing date of Sandel’s cited book, the fee was $20 a night. Yet for the common family, the chances of gaining a site at that price are near zero. Why? Well, as soon as the sites are made available, they are booked in a matter of minutes. Is this “first family come; first family served”?
Here is another bit of information: by visiting an online site, one can secure that campsite for $100 or $150 a night. Why? The sights were purchased by scalpers in large numbers (at the $20 figure) and then offered online at the inflated figure. These entrepreneurs, due to their access to cash, have undermined the rationale for the initial pricing policy of the government. Sandel writes:
Underlying the hostility to scalping campsites at Yosemite are actually two objections – one about fairness, the other about the proper way of valuing a national park. The first objection worries that scalping is unfair to people of modest means, who can’t afford to pay $150 a night for a campsite. The second objection, implied by the [referred to] editorial’s rhetorical question (“Is nothing sacred?”) draws on the idea that some things should not be up for sale. … [N]ational parks are not merely objects of use or sources of social utility. They are places of natural wonder and beauty, worthy of appreciation, even awe. For scalpers to auction access to such places seems a kind of sacrilege.[3]
And this sort of “sacrilege” is not limited to national parks.
Another example was seen when Pope Benedict visited the US in 2008. Then, it was arranged that the Pope would hold mass gatherings, in the form of masses at two stadiums, one in New York City (Yankee Stadium) and the other in Washington, D.C. There, the tickets were distributed for free by the respective Catholic dioceses. But after the scalpers got their hands on the tickets, and they did in large numbers, they drove the price up to $200. Again, given the religious nature of this example, the term sacrilege is an apt one to describe what happened.
Are purely commercial events immune from such practices? Springsteen concerts prove that they are not. In 2009, as a sort of payback to his home state, New Jersy, Springsteen put on two concerts and charged a modest fee (modest in terms of the demand) of $95. One can guess what happened; the scalpers moved in and getting a ticket for the concerts could cost a great deal more than the initial price. How much more? Well, a Rolling Stone concert was able to charge $450 a ticket.
Why not charge the market price, Mr. Springsteen? Sandel supposes that in that case the singer and his group wanted to pay respect to the challenges of the group’s working-class fan base. Yes, it was a commercial event; surely the group made a profit, but a more modest profit than the market allowed. Instead, the scalpers made the difference between the market price and the initial selling price. Does the word sacrilege describe this case? Perhaps not, but its qualities overlap with what is sacrilegious.
Let this blog leave readers with these three examples to give the issue – queuing or marketing – some thought and invite them to the next posting. It will share Sandel’s thoughts on the ethic of the queue. Or stated differently, is queuing good or bad, right or wrong, as the practice calls on people to wait or should they pay – as in a regular pricing arrangement?
This question is more important than just having to pay hundreds of dollars more for an experience or item. Some of those occasions are considered reflective of what sort of a people Americans are. Therefore, before ending this posting, consider this claim: federated nations – where the citizenry shares a sense of partnership – should be concerned over the true value of some assets or products. They should be held as more than marketable items – they should be considered sacred.
[1] Robert Gutierrez, “Lining Up or Paying,” Gravitas: A Voice for Civics, accessed December 9, 2023, URL: https://gravitascivics.blogspot.com/2019_09_08_archive.html.
[2] Michael J. Sandel, What Money Can’t Buy: The Moral Limits of Markets (New York, NY: Farrar, Straus, and Giroux, 2012), 35. The factual claims of this posting are based on what this source reports.
