There’s an interesting tension in free-market economics related to businesses.
First, businesses are forms of free association in which people voluntarily pool their resources to accomplish more together than any of them could separately.
Second, businesses profit most by serving customers, not by abusing them. So we start with an assumption that businesses are good things, not bad things, because businesses allow people to better themselves by serving others with products and services they want.
So business is good. Generally.
But, as even Adam Smith observed, sometimes businesses misbehave. Smith wrote “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
That’s why we at the Institute for Policy Innovation assert that we are “pro-market, not pro-business.” We want easy business formation, but we also want competition and the freedom of success or failure.
In a free market, with competition, ease of entry, and possibility of failure, businesses can only harm consumers if enabled by government protection and regulation.
That’s why conservatives and free-market advocates support the consumer welfare standard for government regulation, rather than a European style competition policy.
Which brings us to Texas, and tickets.
Those who buy tickets to live events are generally pretty unhappy with the fact that they are held hostage to Ticketmaster\Live Nation tyranny. In retrospect, this is a merger that has harmed consumers. But beyond their control of the first sale of tickets for live events, the Ticketmaster/Live Nation colossus does everything it can do prevent ticket purchasers from reselling their tickets, or to make it prohibitively troublesome or expensive.
This was an emerging issue twelve years ago, when IPI wrote a paper on the issues of the importance of secondary markets for tickets. If anything, the problem has only gotten worse.
Secondary markets are an important component of a free market, and if you buy a legitimate ticket to a live event, you should be able to transfer it to whomever you choose, however you choose. But the Ticketmaster/Live Nation demogorgon wants to control that as well.
Thankfully, excellent bills have been introduced in the Texas Legislature during the current session that would protect the rights of ticket purchasers to both buy and sell tickets on secondary markets, and make all fees included in “up front” pricing. House Bill HB 3621 had its first hearing Wednesday April 23rd, while it’s Senate companion SB 1820 awaits a hearing.
Issues like preserving secondary markets for tickets are important because they force elected officials to choose between being pro-business or pro-market. More cynically, between being pro-entrenched interests or pro-economic liberty. The Texas Legislature should choose markets and economic liberty.