Taylor Swift wanted to keep ticket prices to her Eras tour, which hit New Jersey the holiday weekend, out of the hands of scalpers — and thus affordable to fans.
Instead, tickets broke records, some going for five figures.
The result wasn’t unexpected; nor is it a failure: No matter what the rules, free markets always find a way to reveal true value.
Swift used Ticketmaster’s “Verified Fan” system to sell tickets last year — a system that’s supposed to keep out bots and other mass purchasers.
That turned into a technical fiasco when demand swamped Ticketmaster’s website.
And the frenzy to score tickets showed she didn’t accomplish her mission.
The top face value of tickets is $499, most much lower. Yet one survey found the average fan paid $700 for “cheap seats,” and one Massachusetts man shelled out $21,000 for four.
This was always going to happen — because of economics.
For most goods and services — clothes, cars, haircuts — prices stay reasonably steady because producers make enough of them to meet demand.
But there is only one Taylor Swift.
And she doesn’t want to perform every night for the rest of her life, instead doing only 52 shows after a five-year break.
So Swift is like a van Gogh painting or a Fifth Avenue apartment — desire for it becomes a function of stored wealth.
There’s a lot of stored wealth in America right now, in part because of the trillions of dollars the government dumped into the economy during the pandemic.
Americans have nearly $4 trillion more in bank accounts than they had in February 2020, growth of 29%.
The stock market is one-third higher than it was.
If you’re in the upper third of America’s income range, you’ve probably got more in savings and paper wealth than you had three years ago because you didn’t lose your job in 2020 and stayed home for a year not spending much money.
If Taylor Swift is your fancy — or the fancy of your kid, who was also locked up at home for a year — why not splurge?
But: Ticket prices also soared because, despite all the criticism of Ticketmaster, the system it created worked, from one perspective.
Few tickets made their way to the professional resale market, as The Wall Street Journal reported: Scalpers were shut out.
Then who was selling nosebleed seats at nosebleed prices?
Fans — people who may love Taylor Swift but decided that when it came down to it, they liked $21,000 more.
The free market told them something they didn’t know about themselves. Now they are a little richer.
Problem is, first-time ticket sellers weren’t good at selling tickets — and without professionals in the market to provide reliability, liquidity and continuity, prices fluctuated wildly.
How could Swift have avoided this?
She could have priced her tickets at a higher initial selling point.
But then she, not scalpers, would be the bad guy, taking advantage of fans maxing out their credit cards.
Plus, like a company that prices its initial stock offering low only to see its shares soar on the market the first day, the scramble for resale tickets is itself a marketing ploy.
If Swift had priced every ticket at $800 to see them slump on the secondary market, the public would consider the tour a failure and Swift greedy.
One might fantasize about a system that would prevent all ticket resales.
Through fingerprint or facial recognition, you’d have to prove at the gate you bought the original ticket. Seems easy.
But what to do about parents who bought tickets for their adult children?
With concerts that generate intense demand, a scalper would just show up and claim the people he’s letting into the show are his kids.
To police this, you’d need verification resembling totalitarianism.
That’s why states that tried to suppress market forces, like the old Soviet Union, were tyrannies dependent on snitching and surveillance.
And even that approach did not work. In communist or socialist states, people with bribe money or political power got the best apartments and somehow scored Western clothes, anyway.
Swift could price every concert ticket at $5 and prevent resales — yet somehow, the ZIP codes of concert attendees and their net worth wouldn’t change.
Demand would find a way.
Contrary to Swift’s lyric, we can have nice things.
But when demand exceeds supply, we pay a lot for them.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.