Posted by
David R. Lunden on Monday, February 09, 2009 5:34:36 PM
I would like to offer a simple economics lesson;
All Prices Are Bid. That's it. Simple enough. Prices are never fixed and they may be set only until the next bid comes along. Each of us places a different value on the same things at different times.
Most of us learned during childhood that we need to trade things of equal value. The fallacy of this thinking is explained quite well in Ludwig Von Mises, Human Action, The reason trade takes place is because we value the thing we are trading for more than the thing we are trading. The person we are trading with values the thing we have to offer more than what he is wiling to trade in return. (do consider the value of goodwill when trading)
Bruce Springsteen is angry with Ticketmaster because it allowed its subsidiary, TicketsNow, to sell his concert tickets at market value (bid price) instead of face value.
Consider this, suppose there were five thousand seats available for his concert, and suppose there were fifteen thousand people wanting tickets. If Springsteen or his agents had put the tickets up for auction, the the price would have risen to the point where only five thousand people would have bought tickets. Springsteen, the rest of the performers, and the venue where he performed would have made the extra money. But instead, Springsteen wanted the tickets to go at face value allowing scalpers to buy up the tickets to sell above face value. The scalpers are the ones who made the extra money. Springsteen and his E Street Band were angry at the wrong people. They should have been angry at themselves for giving scalpers the opportunity to make a profit.
Those who are opposed to free market principles will invariably turn profits over to scalpers.