For some reason reselling, i.e. scalping, train tickets in China is illegal. The rationale behind this policy is somewhat unclear. According to CCTV, more than 600 people have been arrested for this illegal activity. It is considered a form of cheating or dishonesty. This is a mistaken belief.

If things like food or medical treatment were being scalped, there might be a rationale for not allowing the practice. A train ticket is hardly in the same class. In many ways it is a luxury, a frivolous item. If someone can’t get a train home during the holidays it may be inconvenient and disappointing, but hardly life shattering.

A few years ago I was in New York on business. I hoped to see Phantom of the Opera on Broadway, but it was sold out. I asked the hotel concierge for help. A few hours later he handed me an envelope with two tickets for Phantom in it. They were priced about 60% higher than the face price, but I was happy to pay it. I even tipped him for his trouble. Without the scalped tickets I would have returned home without seeing the play.

I have bought scalped tickets for concerts, ball games, and once a bull fight in Pamplona. In every case, no one forced to buy them. I had to choose to either pay the price, or miss the event. I was happy to pay the premium.

Recently a couple in Foshan was discovered purchasing train tickets for migrant workers, adding a small extra charge to the price, and reselling them. Since this is against the law, the couple was arrested. Most of the migrant workers interviewed in the newspapers expressed sympathy for the couple and were surprised they were arrested.

Many migrants have trouble purchasing train tickets during the always sold out Spring Festival and were happy to pay the couple for their help. Some were unable to navigate the new rules, others didn’t have internet access. Without the aid, they might have been unable to visit their families at home.

Hurricane Isabella hit my home in North Carolina in 2004. The storm knocked 13 trees down in my yard. Two hit my house, one fell on my neighbor’s house. The electricity was off more than a week, the internet and telephone service was gone for more than two weeks. Most roads were impassable from debris and high water. I couldn’t get my car out of the driveway.

Immediately after the storm people began flooding into the area. They came from as far away as Vermont, Louisiana, and Florida. They were selling goods and services, usually at inflated prices.

A tree trimmer from Georgia knocked on my door and offered to cut up and remove the fallen trees for about three times what the same work would have cost during normal times. I happily accepted the offer. Within two days my yard was clean. It would have been more than a month if I had decided to wait for the local tree service to get to me.

After the driveway was cleared I was able to drive to a store for food and water. The few places where bottled water was available, it was priced several times higher than usual. No problem. Most places went to incredible trouble to get the water to town. I could have driven 100 miles to search for less expensive water, but decided it was well worth the scalped price.

Meanwhile grandstanding politicians got on the radio and promised to go after anyone caught inflating prices (scalping) for goods and services. While I would have preferred to pay less for having the yard cleared, I understood it was an unusual time. Just as the migrants don’t mind paying a premium price for train tickets during Spring Festival, I didn’t mind a bit paying a high price for water after the hurricane.

Proponents of keeping scalping tickets illegal argue that private citizens do not have the right that venues have to sell tickets, and that they mark up the tickets to unreasonable prices, thus creating a system that benefits the wealthy. They also argue that scalpers are notoriously unreliable and often run scams.

Those who would like to make scalping a legal system argue that tickets are goods like any other, and should be allowed to be resold. They say that allowing venues to hold the only right to sell tickets is a kind of a monopoly, and that scalping allows for an open market. Scalpers deserve their profits in exchange for the service they provide, and the risks they take if they are unable to sell their product.

The fact is no one forces anyone to buy scalped tickets or anything else that is resold. It is a free market transaction entered into voluntarily. There is nothing dishonest about it. It should be completely legal.

 

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