Monday, April 25, 2011

Govt Regs v Darwinist selection of business models

There was a fantastic debate on the Smirconish show last night (I think it was a repeat broadcast from Friday). Some concert venues/bands have created a new way of selling concert seats. In one sense, it is environmentally friendly. Instead of a ticket, you just swipe the credit card you used to pay for it at the venue entrance. No paper needed.

Scalpers hate this because they can’t resell tickets. Stubhub and Ticketbroker also hate it. The only way you can have someone else use your seat is if you trust them with your credit card for the evening. Kids yes, good friends yes, but EBay – probably not. So they are lobbying to get this made illegal.

The reason I found the debate so fascinating is that both sides claim the free market side. The concert venues and bands say that government has no business telling them how they can or can’t sell tickets. And it’s good for fans because without scalpers they can get tickets at regular price. So real fans show up at the concert. The scalpers say that once a customer purchases a ticket they should have the freedom to do whatever they want with it, including reselling it to a stranger.

My view on this would be familiar to anyone who reads my blogs. I am against government regulations that reduce freedom (unless there is a really good reason), but I am in favor of allowing companies to pursue whatever business models they want, even if it is a stupid one (with perhaps exceptions for anti-trust, safety, and truthfulness requirements). The free market will soon decide if they can be successful or not. If not, they will go out of business soon enough and the stupid behaviors will disappear. So I am on the side of the concert venues. Not because I think it’s a good idea, I think it is a bad idea actually. But I support their right to implement bad ideas between one private organization (the venue) and another (the customer).

I don’t think I know enough about peanut allergies to make a similar conclusion on whether peanuts should be banned from airplanes. I think it makes total sense for the airlines to switch to something less allergenic (pretzels or chips are fine). And they can have something during the ticketing process that asks whether anyone has a serious allergy so they can make an announcement before the plane leaves the gate asking people not to eat peanuts. This last thought is because I have heard that some people are so allergic that they can be four rows away from the peanut and still have a serious attack.

But while I think this is a smart business strategy, do I think the government should mandate it as a law? That’s tough. You can ban airlines from serving peanuts, but do you ban people from bringing peanut-containing products on the plane? If not, it doesn’t really help to ban airline peanuts. And what about international flights (and international passengers)?

I have heard of some public schools that are banning peanuts. They don’t serve any and tell the students not to bring anything with peanuts. This is a slightly different situation because you can find out about serious allergies ahead of time (when parents register their kids for school). Maybe there is a better solution than a ban. Especially since the kids attend the same school for years, so they would have to give up PB&J and Snickers bars for a long time.