What Money Can't Buy The Moral Limits of Markets
By Michael J. Sandel
Farrar, Straus and Giroux Copyright © 2012 Michael J. Sandel
All right reserved. ISBN: 9780374203030
1Jumping the Queue
Nobody likes to wait in line. Sometimes you can pay to jump the queue. It’s long been known that, in fancy restaurants, a handsome tip to the maître d’ can shorten the wait on a busy night. Such tips are quasi bribes and handled discreetly. No sign in the window announces immediate seating for anyone willing to slip the host a fifty-dollar bill. But in recent years, selling the right to cut in line has come out of the shadows and become a familiar practice.FAST TRACK
Long lines at airport security checkpoints make air travel an ordeal. But not everyone has to wait in the serpentine queues. Those who buy first-class or business-class tickets can use priority lanes that take them to the front of the line for screening. British Airways calls it Fast Track, a service that also lets high-paying passengers jump the queue at passport and immigration control.1
But most people can’t afford to fly first-class, so the airlines have begun offering coach passengers the chance to buy line-cutting privileges as an à la carte perk. For an extra $39, United Airlines will sell you priority boarding for your flight from Denver to Boston, along with the right to cut in line at the security checkpoint. In Britain, London’s Luton Airport offers an even more affordable fast-track option: wait in the long security line or pay £3 (about $5) and go to the head of the queue.2
Critics complain that a fast track through airport security should not be for sale. Security checks, they argue, are a matter of national defense, not an amenity like extra legroom or early boarding privileges; the burden of keeping terrorists off airplanes should be shared equally by all passengers. The airlines reply that everyone is subjected to the same level of screening; only the wait varies by price. As long as everyone receives the same body scan, they maintain, a shorter wait in the security line is a convenience they should be free to sell.3
Amusement parks have also started selling the right to jump the queue. Traditionally, visitors may spend hours waiting in line for the most popular rides and attractions. Now, Universal Studios Hollywood and other theme parks offer a way to avoid the wait: for about twice the price of standard admission, they’ll sell you a pass that lets you go to the head of the line. Expedited access to the Revenge of the Mummy thrill ride may be morally less freighted than privileged access to an airport security check. Still, some observers lament the practice, seeing it as corrosive of a wholesome civic habit: “Gone are the days when the theme-park queue was the great equalizer,” one commentator wrote, “where every vacationing family waited its turn in democratic fashion.”4
Interestingly, amusement parks often obscure the special privileges they sell. To avoid offending ordinary customers, some parks usher their premium guests through back doors and separate gates; others provide an escort to ease the way of VIP guests as they cut in line. This need for discretion suggests that paid line cutting—even in an amusement park—tugs against a nagging sense that fairness means waiting your turn. But no such reticence appears on Universal’s online ticket site, which touts the $149 Front of Line Pass with unmistakable bluntness: “Cut to the FRONT at all rides, shows and attractions!”5
If you’re put off by queue jumping at amusement parks, you might opt instead for a traditional tourist sight, such as the Empire State Building. For $22 ($16 for children), you can ride the elevator to the eighty-sixth-floor observatory and enjoy a spectacular view of New York City. Unfortunately, the site attracts several million visitors a year, and the wait for the elevator can sometimes take hours. So the Empire State Building now offers a fast track of its own. For $45 per person, you can buy an Express Pass that lets you cut in line—for both the security check and the elevator ride. Shelling out $180 for a family of four may seem a steep price for a fast ride to the top. But as the ticketing website points out, the Express Pass is “a fantastic opportunity” to “make the most of your time in New York—and the Empire State Building—by skipping the lines and going straight to the greatest views.”6LEXUS LANES
The fast-track trend can also be seen on freeways across the United States. Increasingly, commuters can buy their way out of bumper-to-bumper traffic and into a fast-moving express lane. It began during the 1980s with car pool lanes. Many states, hoping to reduce traffic congestion and air pollution, created express lanes for commuters willing to share a ride. Solo drivers caught using the car pool lanes faced hefty fines. Some put blow-up dolls in the passenger seat in hopes of fooling the highway patrol. In an episode of the television comedy Curb Your Enthusiasm
, Larry David comes up with an ingenious way of buying access to the car pool lane: faced with heavy freeway traffic en route to an LA Dodgers baseball game, he hires a prostitute—not to have sex but to ride in his car on the way to the stadium. Sure enough, the quick ride in the car pool lane gets him there in time for the first pitch.7
Today, many commuters can do the same—without the need for hired help. For fees of up to $10 during rush hour, solo drivers can buy the right to use car pool lanes. San Diego, Minneapolis, Houston, Denver, Miami, Seattle, and San Francisco are among the cities that now sell the right to a faster commute. The toll typically varies according to the traffic—the heavier the traffic, the higher the fee. (In most places, cars with two or more occupants can still use express lanes for free.) On the Riverside Freeway, east of Los Angeles, rush-hour traffic creeps along at 15–20 miles an hour in the free lanes, while the paying customers in the express lane zip by at 60–65 mph.8
Some people object to the idea of selling the right to jump the queue. They argue that the proliferation of fast-track schemes adds to the advantages of affluence and consigns the poor to the back of the line. Opponents of paid express lanes call them “Lexus lanes” and say they are unfair to commuters of modest means. Others disagree. They argue that there is nothing wrong with charging more for faster service. Federal Express charges a premium for overnight delivery. The local dry cleaner charges extra for same-day service. And yet no one complains that it’s unfair for FedEx, or the dry cleaner, to deliver your parcel or launder your shirts ahead of someone else’s.
To an economist, long lines for goods and services are wasteful and inefficient, a sign that the price system has failed to align supply and demand. Letting people pay for faster service at airports, at amusement parks, and on highways improves economic efficiency by letting people put a price on their time.THE LINE-STANDING BUSINESS
Even where you’re not allowed to buy your way to the head of the line, you can sometimes hire someone else to queue up on your behalf. Each summer, New York City’s Public Theater puts on free outdoor Shakespeare performances in Central Park. Tickets for the evening performances are made available at 1:00 p.m., and the line forms hours in advance. In 2010, when Al Pacino starred as Shylock in The Merchant of Venice
, demand for tickets was especially intense.
Many New Yorkers were eager to see the play but didn’t have time to stand in line. As the New York Daily News
reported, this predicament gave rise to a cottage industry—people offering to wait in line to secure tickets for those willing to pay for the convenience. The line standers advertised their services on Craigslist and other websites. In exchange for queuing up and enduring the wait, they were able to charge their busy clients as much as $125 per ticket for the free performances.9
The theater tried to prevent the paid line standers from plying their trade, claiming “it’s not in the spirit of Shakespeare in the Park.” The mission of the Public Theater, a publicly subsidized, nonprofit enterprise, is to make great theater accessible to a broad audience drawn from all walks of life. Andrew Cuomo, New York’s attorney general at the time, pressured Craigslist to stop running ads for the tickets and line-standing services. “Selling tickets that are meant to be free,” he stated, “deprives New Yorkers of enjoying the benefits that this taxpayer-supported institution provides.”10
Central Park is not the only place where there’s money to be made by those who stand and wait. In Washington, D.C., the line-standing business is fast becoming a fixture of government. When congressional committees hold hearings on proposed legislation, they reserve some seats for the press and make others available to the general public on a first-come, first-served basis. Depending on the subject and the size of the room, the lines for the hearings can form a day or more in advance, sometimes in the rain or in the chill of winter. Corporate lobbyists are keen to attend these hearings, in order to chat up lawmakers during breaks and keep track of legislation affecting their industries. But the lobbyists are loath to spend hours in line to assure themselves a seat. Their solution: pay thousands of dollars to professional line-standing companies that hire people to queue up for them.
The line-standing companies recruit retirees, message couriers, and, increasingly, homeless people to brave the elements and hold a place in the queue. The line standers wait outside, then, as the line moves, they proceed inside the halls of the congressional office buildings, queuing up outside the hearing rooms. Shortly before the hearing begins, the well-heeled lobbyists arrive, trade places with their scruffily attired stand-ins, and claim their seats in the hearing room.11
The line-standing companies charge the lobbyists $36 to $60 per hour for the queuing service, which means that getting a seat in a committee hearing can cost $1,000 or more. The line standers themselves are paid $10–$20 per hour. The Washington Post
has editorialized against the practice, calling it “demeaning” to Congress and “contemptuous of the public.” Senator Claire McCaskill, a Missouri Democrat, has tried to ban it, without success. “The notion that special interest groups can buy seats at congressional hearings like they would buy tickets to a concert or football game is offensive to me,” she said.12
The business has recently expanded from Congress to the U.S. Supreme Court. When the Court hears oral arguments in big constitutional cases, it’s not easy to get in. But if you’re willing to pay, you can hire a line stander to get you a ringside seat in the highest court in the land.13
The company LineStanding.com describes itself as “a leader in the Congressional line standing business.” When Senator McCaskill proposed legislation to prohibit the practice, Mark Gross, the owner of the company, defended it. He compared line standing to the division of labor on Henry Ford’s assembly line: “Each worker on the line was responsible for his/her specific task.” Just as lobbyists are good at attending hearings and “analyzing all the testimony,” and senators and congressmen are good at “making an informed decision,” line standers are good at, well, waiting. “Division of labor makes America a great place to work,” Gross claimed. “Linestanding may seem like a strange practice, but it’s ultimately an honest job in a free-market economy.”14
Oliver Gomes, a professional line stander, agrees. He was living in a homeless shelter when he was recruited for the job. CNN interviewed him as he held a place in line for a lobbyist at a hearing on climate change. “Sitting in the halls of Congress made me feel a little better,” Gomes told CNN. “It elevated me and made me feel like, well, you know, maybe I do belong here, maybe I can contribute even at that little minute level.”15
But opportunity for Gomes meant frustration for some environmentalists. When a group of them showed up for the climate change hearing, they couldn’t get in. The lobbyists’ paid stand-ins had already staked out all the available seats in the hearing room.16 Of course, it might be argued that if the environmentalists cared enough about attending the hearing, they too could have queued up overnight. Or they could have hired homeless people to do it for them.TICKET SCALPING DOCTOR APPOINTMENTS
Queuing for pay is not only an American phenomenon. Recently, while visiting China, I learned that the line-standing business has become routine at top hospitals in Beijing. The market reforms of the last two decades have resulted in funding cuts for public hospitals and clinics, especially in rural areas. So patients from the countryside now journey to the major public hospitals in the capital, creating long lines in registration halls. They queue up overnight, sometimes for days, to get an appointment ticket to see a doctor.17
The appointment tickets are a bargain—only 14 yuan (about $2). But it isn’t easy to get one. Rather than camp out for days and nights in the queue, some patients, desperate for an appointment, buy tickets from scalpers. The scalpers make a business of the yawning gap between supply and demand. They hire people to line up for appointment tickets and then resell the tickets for hundreds of dollars—more than a typical peasant makes in months. Appointments to see leading specialists are especially prized—and hawked by the scalpers as if they were box seats for the World Series. The Los Angeles Times
described the ticket-scalping scene outside the registration hall of a Beijing hospital: “Dr. Tang. Dr. Tang. Who wants a ticket for Dr. Tang? Rheumatology and immunology.”18
There is something distasteful about scalping tickets to see a doctor. For one thing, the system rewards unsavory middlemen rather than those who provide the care. Dr. Tang could well ask why, if a rheumatology appointment is worth $100, most of the money should go to scalpers rather than to him, or his hospital. Economists might agree and advise hospitals to raise their prices. In fact, some Beijing hospitals have added special ticket windows, where the appointments are more expensive and the lines much shorter.19 This high-priced ticket window is the hospital’s version of the no-wait premium pass at amusement parks or the fast-track lane at the airport—a chance to pay to jump the queue.
But regardless of who cashes in on the excess demand, the scalpers or the hospital, the fast track to the rheumatologist raises a more basic question: Should patients be able to jump the queue for medical care simply because they can afford to pay extra?
The scalpers and special ticket windows at Beijing hospitals raise this question vividly. But the same question can be asked of a subtler form of queue jumping increasingly practiced in the U.S.—the rise of “concierge” doctors.CONCIERGE DOCTORS
Although U.S. hospitals are not thronged with scalpers, medical care often involves a lot of waiting. Doctor appointments have to be scheduled weeks, sometimes months, in advance. When you show up for the appointment, you may have to cool your heels in the waiting room, only to spend a hurried ten or fifteen minutes with the doctor. The reason: Insurance companies don’t pay primary care doctors much for routine appointments. So to make a decent living, physicians in general practice have rosters of three thousand patients or more, and often rush through twenty-five to thirty appointments per day.20
Many patients and doctors are frustrated with this system, which leaves little time for doctors to get to know their patients or to answer their questions. So a growing number of physicians now offer a more attentive form of care known as “concierge medicine.” Like the concierge at a five-star hotel, the concierge physician is at your service around the clock. For annual fees ranging from $1,500 to $25,000, patients are assured of same-day or next-day appointments, no waiting, leisurely consultations, and twenty-four-hour access to the doctor by email and cell phone. And if you need to see a top specialist, your concierge doctor will pave the way.21
To provide this attentive service, concierge physicians sharply reduce the number of patients they care for. Physicians who decide to convert their practice into a concierge service send a letter to their existing patients offering a choice: sign up for the new, no-wait service for an annual retainer fee, or find another doctor.22
One of the first concierge practices, and one of the priciest, is MD2 (“MD Squared”), founded in 1996 in Seattle. For a fee of $15,000 per year for an individual ($25,000 for a family), the company promises “absolute, unlimited and exclusive access to your personal physician.”23 Each doctor serves only fifty families. As the company explains on its website, the “availability and level of service we provide absolutely necessitates that we limit our practice to a select few.”24 An article in Town & Country
magazine reports that the MD2 waiting room “looks more like the lobby of a Ritz-Carlton than a clinical doctor’s office.” But few patients even go there. Most are “CEOs and business owners who don’t want to lose an hour out of their day to go to the doctor’s office and prefer instead to receive care in the privacy of their home or office.”25
Other concierge practices cater to the upper middle class. MDVIP, a for-profit concierge chain based in Florida, offers same-day appointments and prompt service (answering your call by the second ring) for $1,500 to $1,800 per year, and accepts insurance payments for standard medical procedures. Participating physicians cut their patient rolls to six hundred, enabling them to spend more time with each patient.26 The company assures patients that “waiting will not be a part of their health care experience.” According to The New York Times
, an MDVIP practice in Boca Raton sets out fruit salad and sponge cake in the waiting room. But since there is little if any waiting, the food often goes untouched.27
For concierge doctors and their paying customers, concierge care is everything medicine should be. Doctors can see eight to twelve patients a day, rather than thirty, and still come out ahead financially. Physicians affiliated with MDVIP keep two-thirds of the annual fee (one-third goes to the company), which means a practice with six hundred patients makes $600,000 per year in retainer fees alone, not counting reimbursements from insurance companies. For patients who can afford it, unhurried appointments and round-the-clock access to a doctor are luxuries worth paying for.28
The drawback, of course, is that concierge care for a few depends on shunting everyone else onto the crowded rolls of other doctors.29 It therefore invites the same objection leveled against all fast-track schemes: that it’s unfair to those left languishing in the slow lane.
Concierge medicine differs, to be sure, from the special ticket windows and the appointment-scalping system in Beijing. Those who can’t afford a concierge doc can generally find decent care elsewhere, while those who can’t afford a scalper in Beijing are consigned to days and nights of waiting.
But the two systems have this in common: each enables the affluent to jump the queue for medical care. The queue jumping is more brazen in Beijing than in Boca Raton. There seems a world of difference between the clamor of the crowded registration hall and the calm of the waiting room with the uneaten sponge cake. But that’s only because, by the time the concierge patient arrives for his or her appointment, the culling of the queue has already taken place, out of view, by the imposition of the fee.MARKET REASONING
The stories we’ve just considered are signs of the times. In airports and amusement parks, in the corridors of Congress and the waiting rooms of doctors, the ethic of the queue—“first come, first-served”—is being displaced by the ethic of the market—“you get what you pay for.”
And this shift reflects something bigger—the growing reach of money and markets into spheres of life once governed by nonmarket norms.
Selling the right to cut in line is not the most grievous instance of this trend. But thinking through the rights and wrongs of line standing, ticket scalping, and other forms of queue jumping can help us glimpse the moral force—and moral limits—of market reasoning.
Is there anything wrong with hiring people to stand in line, or with scalping tickets? Most economists say no. They have little sympathy for the ethic of the queue. If I want to hire a homeless person to queue up on my behalf, they ask, why should anyone complain? If I’d rather sell my ticket than use it, why should I be prevented from doing so?
The case for markets over queues draws on two arguments. One is about respecting individual freedom; the other is about maximizing welfare, or social utility. The first is a libertarian argument. It maintains that people should be free to buy and sell whatever they please, as long as they don’t violate anyone’s rights. Libertarians oppose laws against ticket scalping for the same reason they oppose laws against prostitution, or the sale of human organs: they believe such laws violate individual liberty, by interfering with the choices made by consenting adults.
The second argument for markets, more familiar among economists, is utilitarian. It says that market exchanges benefit buyers and sellers alike, thereby improving our collective well-being, or social utility. The fact that my line stander and I strike a deal proves that we are both better off as a result. Paying $125 to see the Shakespeare play without having to wait in line must make me better off; otherwise I wouldn’t have hired the line stander. And earning $125 by spending hours in a queue must make the line stander better off; otherwise he or she wouldn’t have taken the job. We are both better off as a result of our exchange; our utility increases. This is what economists mean when they say that free markets allocate goods efficiently. By allowing people to make mutually advantageous trades, markets allocate goods to those who value them most highly, as measured by their willingness to pay.
My colleague Greg Mankiw, an economist, is the author of one of the most widely used economics textbooks in the United States. He uses the example of ticket scalping to illustrate the virtues of the free market. First, he explains that economic efficiency means allocating goods in a way that maximizes “the economic well-being of everyone in society.” He then observes that free markets contribute to this goal by allocating “the supply of goods to the buyers who value them most highly, as measured by their willingness to pay.”30 Consider ticket scalpers: “If an economy is to allocate its scarce resources efficiently, goods must get to those consumers who value them most highly. Ticket scalping is one example of how markets reach efficient outcomes … By charging the highest price the market will bear, scalpers help ensure that consumers with the greatest willingness to pay for the tickets actually do get them.”31
If the free-market argument is correct, ticket scalpers and line-standing companies should not be vilified for violating the integrity of the queue; they should be praised for improving social utility by making underpriced goods available to those most willing to pay for them.MARKETS VERSUS QUEUES
What, then, is the case for the ethic of the queue? Why try to banish paid line standers and ticket scalpers from Central Park or Capitol Hill? A spokesperson for Shakespeare in the Park offered the following rationale: “They are taking a spot away and a ticket away from someone who wants to be there and is eager to see a production of Shakespeare in the Park. We want people to have that experience for free.”32
The first part of the argument is flawed. Hired line standers do not reduce the total number of people who see the performance; they only change who
sees it. It’s true, as the spokesperson claims, that the line standers take tickets that would otherwise go to people farther back in the queue who are eager to see the play. But those who wind up with those tickets are also eager to see the play. That’s why they shell out $125 to hire a line stander.
What the spokesperson probably meant is that ticket scalping is unfair to those who can’t afford the $125. It puts ordinary folks at a disadvantage and makes it harder for them to get tickets. This is a stronger argument. When a line stander or scalper gets a ticket, someone behind him or her in the queue loses out, someone who may be unable to afford the scalper’s price.
Free-market advocates might reply as follows: If the theater really wants to fill its seats with people eager to see the play and to maximize the pleasure its performances give, then it should want tickets to go to those who value them most highly. And those are the people who will pay most for a ticket. So the best way to pack the house with an audience that will derive the greatest pleasure from the play is to let the free market operate—either by selling tickets for whatever price the market will bear, or by allowing line standers and scalpers to sell to the highest bidders. Getting tickets to those willing to pay the highest price for them is the best way of determining who most values a Shakespeare performance.
But this argument is unconvincing. Even if your goal is to maximize social utility, free markets may not do so more reliably than queues. The reason is that the willingness to pay for a good does not show who values it most highly. This is because market prices reflect the ability as well as the willingness to pay. Those who most want to see Shakespeare, or the Red Sox, may be unable to afford a ticket. And in some cases, those who pay the most for tickets may not value the experience very highly at all.
I’ve noticed, for example, that the people sitting in the expensive seats at the ballpark often show up late and leave early. This makes me wonder how much they care about baseball. Their ability to afford seats behind home plate may have more to do with the depth of their pockets than their passion for the game. They certainly don’t care as much as some fans, especially young ones, who can’t afford box seats but who can tell you the batting average of every player in the starting lineup. Since market prices reflect the ability as well as the willingness to pay, they are imperfect indicators of who most values a particular good.
This is a familiar point, even an obvious one. But it casts doubt on the economist’s claim that markets are always better than queues at getting goods to those who value them most highly. In some cases, the willingness to stand in line—for theater tickets or for the ball game—may be a better indicator of who really wants to attend than the willingness to pay.
Defenders of ticket scalping complain that queuing “discriminates in favor of people who have the most free time.”33 That’s true, but only in the same sense that markets “discriminate” in favor of people who have the most money. As markets allocate goods based on the ability and willingness to pay, queues allocate goods based on the ability and willingness to wait. And there is no reason to assume that the willingness to pay for a good is a better measure of its value to a person than the willingness to wait.
So the utilitarian case for markets over queues is highly contingent. Sometimes markets do get goods to those who value them most highly; other times, queues may do so. Whether, in any given case, markets or queues do this job better is an empirical question, not a matter that can be resolved in advance by abstract economic reasoning.MARKETS AND CORRUPTION
But the utilitarian argument for markets over queues is open to a further, more fundamental objection: utilitarian considerations are not the only ones that matter. Certain goods have value in ways that go beyond the utility they give individual buyers and sellers. How a good is allocated may be part of what makes it the kind of good it is.
Think again about the Public Theater’s free summer Shakespeare performances. “We want people to have that experience for free,” said the spokesperson, explaining the theater’s opposition to hired line standers. But why? How would the experience be diminished if tickets were bought and sold? It would be diminished, of course, for those who’d like to see the play but can’t afford a ticket. But fairness is not the only thing at stake. Something is lost when free public theater is turned into a market commodity, something beyond the disappointment experienced by those who are priced out of attending.
The Public Theater sees its free outdoor performances as a public festival, a kind of civic celebration. It is, so to speak, a gift the city gives itself. Of course, seating is not unlimited; the entire city cannot attend on any given evening. But the idea is to make Shakespeare freely available to everyone, without regard to the ability to pay. Charging for admission, or allowing scalpers to profit from what is meant to be a gift, is at odds with this end. It changes a public festival into a business, a tool for private gain. It would be as if the city made people pay to watch the fireworks on the Fourth of July.
Similar considerations explain what’s wrong with paid line standing on Capitol Hill. One objection is about fairness: it’s unfair that wealthy lobbyists can corner the market on congressional hearings, depriving ordinary citizens of the opportunity to attend. But unequal access is not the only troubling aspect of this practice. Suppose lobbyists were taxed when they hired line-standing companies, and the proceeds were used to make line-standing services affordable for ordinary citizens. The subsidies might take the form, say, of vouchers redeemable for discounted rates at line-standing companies. Such a scheme might ease the unfairness of the present system. But a further objection would remain: turning access to Congress into a product for sale demeans and degrades it.
From an economic point of view, allowing free access to congressional hearings “underprices” the good, giving rise to queues. The line-standing industry remedies this inefficiency by establishing a market price. It allocates seats in the hearing room to those who are willing to pay the most for them. But this values the good of representative government in the wrong way.
We can see this more clearly if we ask why Congress “underprices” admission to its deliberations in the first place. Suppose, striving mightily to reduce the national debt, Congress decided to charge admission to its hearings—$1,000, say, for a front-row seat at the Appropriations Committee. Many people would object, not only on the grounds that the admission fee is unfair to those unable to afford it but also on the grounds that charging the public to attend a congressional hearing is a kind of corruption.
We often associate corruption with ill-gotten gains. But corruption refers to more than bribes and illicit payments. To corrupt a good or a social practice is to degrade it, to treat it according to a lower mode of valuation than is appropriate to it. Charging admission to congressional hearings is a form of corruption in this sense. It treats Congress as if it were a business rather than an institution of representative government.
Cynics might reply that Congress is already a business, in that it routinely sells influence and favors to special interests. So why not acknowledge this openly and charge admission? The answer is that the lobbying, influence peddling, and self-dealing that already afflict Congress are also instances of corruption. They represent the degradation of government in the public interest. Implicit in any charge of corruption is a conception of the purposes and ends an institution (in this case, Congress) properly pursues. The line-standing industry on Capitol Hill, an extension of the lobbying industry, is corrupt in this sense. It is not illegal, and the payments are made openly. But it degrades Congress by treating it as a source of private gain rather than an instrument of the public good.WHAT’S WRONG WITH TICKET SCALPING?
Why do some instances of paid queue jumping, line standing, and ticket scalping strike us as objectionable, while others do not? The reason is that market values are corrosive of certain goods but appropriate to others. Before we can decide whether a good should be allocated by markets, queues, or in some other way, we have to decide what kind of good it is and how it should be valued.
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, and live concerts by Bruce Springsteen.Scalping Campsites at Yosemite
Yosemite National Park, in California, attracts more than four million visitors a year. About nine hundred of its prime campsites can be reserved in advance, at a nominal cost of $20 per night. The reservations can be booked, by telephone or online, beginning at 7:00 a.m. on the fifteenth of each month, up to five months in advance. But it’s not easy to get one. Demand is so intense, especially for the summer, that the campsites are fully booked within minutes of becoming available.
In 2011, however, The Sacramento Bee
reported that ticket scalpers were offering Yosemite campsites for sale on Craigslist for $100 to $150 per night. The National Park Service, which prohibits the resale of reservations, was flooded with complaints about the scalpers and tried to prevent the illicit trade.34 According to standard market logic, it’s not clear why it should: If the National Park Service wants to maximize the welfare society derives from Yosemite, it should want the campsites to be used by those who most value the experience, as measured by their willingness to pay. So rather than try to defeat the scalpers, it should welcome them. Or it should raise the price it charges for campsite reservations to the market-clearing price and eliminate the excess demand.
But the public outrage over the scalping of Yosemite campsites rejects this market logic. The newspaper that broke the story ran an editorial condemning the scalpers under the headline SCALPERS STRIKE YOSEMITE PARK: IS NOTHING SACRED? It saw the scalping as a scam to be prevented, not as a service to social utility. “The wonders of Yosemite belong to all of us,” the editorial stated, “not just those who can afford to fork over extra cash to a scalper.”35
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 editorial’s rhetorical question (“Is nothing sacred?”) draws on the idea that some things should not be up for sale. According to this idea, national 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.Papal Masses for Sale
Here is another example of market values colliding with a sacred good: When Pope Benedict XVI made his first visit to the United States, demand for tickets to his stadium masses in New York City and Washington, D.C., far exceeded the supply of seats—even in Yankee Stadium. Free tickets were distributed through Catholic dioceses and local parishes. When the inevitable ticket scalping ensued—one ticket sold online for more than $200—church officials condemned it on the grounds that access to a religious rite should not be bought and sold. “There shouldn’t be a market in tickets,” a church spokeswoman said. “You can’t pay to celebrate a sacrament.”36
Those who bought tickets from scalpers might disagree. They succeeded in paying to celebrate a sacrament. But the church spokeswoman was trying, I think, to make a different point: although it may be possible to gain admission to a papal mass by buying a ticket from a scalper, the spirit of the sacrament is tainted if the experience is up for sale. Treating religious rituals, or natural wonders, as marketable commodities is a failure of respect. Turning sacred goods into instruments of profit values them in the wrong way.The Market for Springsteen
But what of an event that is partly a commercial enterprise and partly something else? In 2009, Bruce Springsteen performed two concerts in his home state of New Jersey. He set the highest ticket price at $95, even though he could have charged much more and still filled the arena. This price restraint led to rampant ticket scalping and deprived Springsteen of a lot of money. The Rolling Stones had recently charged $450 for the best seats on their concert tour. Economists who studied ticket prices at an earlier Springsteen concert found that, by charging less than the market price, he had forgone about $4 million that evening.37
So why not charge the market price? For Springsteen, keeping ticket prices relatively affordable is a way of keeping faith with his working-class fans. It is also a way of expressing a certain understanding of what his concerts are about. They are moneymaking ventures, to be sure, but only in part. They are also celebratory events whose success depends on the character and composition of the crowd. The performance consists not only in the songs but also in the relationship between the performer and his audience, and the spirit in which they gather.
In a New Yorker
article on the economics of rock concerts, John Seabrook points out that live concerts are not thoroughgoing commodities, or market goods; to treat them as if they were is to diminish them: “Records are commodities; concerts are social events, and in trying to make a commodity out of the live experience you risk spoiling the experience altogether.” He quotes Alan Krueger, an economist who has studied the pricing of Springsteen concerts: “There is still an element of rock concerts that is more like a party than a commodities market.” A ticket to a Springsteen concert, Krueger explained, is not only a market good. It is in some respects a gift. If Springsteen charged as much as the market would bear, he would undermine the gift relation with his fans.38
Some may see this as mere public relations, a strategy to forgo some revenue today to preserve goodwill and maximize earnings in the long term. But this is not the only way to make sense of it. Springsteen may believe, and be right to believe, that to treat his live performance as a purely market good would be to demean it, to value it in the wrong way. In this respect at least, he may have something in common with Pope Benedict.THE ETHIC OF THE QUEUE
We’ve considered several ways of paying to cut in line: hiring line standers, buying tickets from scalpers, or purchasing line-cutting privileges directly from, say, an airline or an amusement park. Each of these transactions supplants the ethic of the queue (waiting your turn) with the ethic of the market (paying a price for faster service).
Markets and queues—paying and waiting—are two different ways of allocating things, and each is appropriate to different activities. The ethic of the queue, “First come, first served,” has an egalitarian appeal. It bids us to ignore privilege, power, and deep pockets—at least for certain purposes. “Wait your turn,” we were admonished as children. “Don’t cut in line.”
The principle seems apt on playgrounds, at bus stops, and when there’s a line for the public restroom at a theater or ballpark. We resent people cutting in front of us. If someone with an urgent need asks to jump the queue, most people will oblige. But we’d consider it odd if someone at the back of the line offered us $10 to trade places—or if the management set up express pay toilets alongside the free ones, to accommodate affluent customers (or desperate ones).
But the ethic of the queue does not govern all occasions. If I put my house up for sale, I’m under no obligation to accept the first offer that comes along, simply because it’s the first. Selling my house and waiting for a bus are different activities, properly governed by different norms. There’s no reason to assume that any single principle—queuing or paying—should determine the allocation of all goods.
Sometimes norms change, and it is unclear which principle should prevail. Think of the recorded message you hear, played over and over, as you wait on hold when calling your bank, HMO, or cable television provider: “Your call will be answered in the order in which it was received.” This is the essence of the ethic of the queue. It’s as if the company is trying to soothe our impatience with the balm of fairness.
But don’t take that recorded message too seriously. Today, some people’s calls are answered faster than others. You might call it telephonic queue jumping. Growing numbers of banks, airlines, and credit card companies provide special phone numbers to their best customers or route their calls to elite call centers for prompt attention. Call center technology enables companies to “score” incoming calls and to give faster service to those that come from affluent places. Delta Airlines recently proposed giving frequent flyers a controversial perk: the option of paying $5 extra to speak to a customer service agent in the United States, rather than be routed to a call center in India. Public disapproval led Delta to abandon the idea.39
Is there anything wrong with answering the calls of your best (or most promising) customers first? It depends on the kind of good you’re selling. Are they calling about an overdraft fee or an appendectomy?
Of course, markets and queues are not the only ways of allocating things. Some goods we distribute by merit, others by need, still others by lottery or chance. Universities typically admit students with the greatest talent and promise, not those who apply first or offer the most money for a place in the freshman class. Hospital emergency rooms treat patients according to the urgency of their condition, not according to the order of their arrival or their willingness to pay extra to be seen first. Jury duty is allocated by lottery; if you are called to serve, you can’t hire someone else to take your place.
The tendency of markets to displace queues, and other nonmarket ways of allocating goods, so pervades modern life that we scarcely notice it anymore. It is striking that most of the paid queue-jumping schemes we’ve considered—at airports and amusement parks, at Shakespeare festivals and congressional hearings, in call centers and doctors’ offices, on freeways and in national parks—are recent developments, scarcely imaginable three decades ago. The demise of the queue in these domains may seem a quaint concern. But these are not the only places that markets have invaded.
Copyright © 2012 by Michael J. Sandel Continues...
Excerpted from What Money Can't Buy by Michael J. Sandel Copyright © 2012 by Michael J. Sandel. Excerpted by permission.
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