In defence of ticket touts
This is what touts are. They buy tickets to events at the face price, either directly from the venue or promoter, who frequently sell a significant proportion of their tickets directly to touts, or from individuals who have bought them from the venue in the usual way. This is a voluntary transaction on both sides. They then resell the tickets at a higher price to willing buyers, again a completely voluntary transaction. So what could possibly be wrong with this?
Many of the complaints simply amount to people saying they had to pay more than the face price for a ticket and would prefer to not have to do this. This is natural. However the real alternative is not simply getting the ticket at its face value. It is rather trying to get it in a mad rush on Ticketmaster and most probably not getting it at all. What is it that touts (or secondary markets in tickets) actually do?
The actual situation is this. There is a fixed supply of a good (seats) and potentially high demand. The difficulty is how to find out who is willing to pay most for the seats and ensure that they get them. One way would be to have an auction where people (or more likely their agents) bid for the tickets. The other way is to have middlemen—touts —who buy the tickets (often from the original promoters or venues) and then offer them for resale to people who are prepared to pay more for them. Alternatively you have a secondary market where people who have been fortunate enough to get a ticket can resell it to people who value it more than they do.
This benefits both sides. The ticket originators avoid the risk they would run if they set the price themselves, overestimated demand, and made a loss. They also avoid the cost of running an auction. The ultimate buyers do not have to do what they would otherwise do and spend a lot of (valuable) time either standing in line or seeking out willing sellers. Provided they are prepared and able to pay enough, they can be sure of getting the seats. In the process they evaluate just how much they are prepared to give up in other goods to get the ticket.
In other words, touts – or secondary markets in tickets – perform a vital economic function, namely that of putting a scarce good into the hands of those who value it most and so will (most probably) get the greatest benefit from it. This is one of the basic, core functions of markets. So why do people feel such an intense gut level hostility to it? There are basically two reasons.
The first is the perception that this is not fair because it means that the good (tickets) gets into the hands of those with the most means as well as the strongest desire. The problem is that there is no alternative in a world of scarcity that is also not fair. If the tickets were allocated by queueing then they would end up in the hands of those who were able to spend valuable time queueing up (which would exclude those with childcare commitments for example). If they were allocated by a lottery then some would go to people with only a marginal interest while others with a passionate interest would miss out.
The second is the idea that value comes from work or effort and the act of trading something does not add or create value and that therefore middlemen are merely parasites. This is simply wrong. Work in itself does not create value. It is perfectly possible to work all day to make something, but if nobody wants it enough to exchange something for it, it has no value. Value as a social phenomenon is created not by production but by exchange. The value of something for a person is defined by what other things they are prepared to give up in exchange for it. When a good is transferred from one person to another the receiver (like their trading partner) has more value than when they started.
With the election coming up all kinds of economic illiteracy are being given an airing. One of the most egregious is the idea floated by the government of making it a criminal offence to resell tickets to events for more than the original sale price, i.e. for a profit. This strikes at the very heart of a functioning market. What middlemen do is to align supply and demand by connecting suppliers and demanders. In doing this, they make both parties better off, and channel resources to where they are most in demand and therefore producing the greatest utility. Time for everyone with economic knowledge to stand up for touts!