In his discussion of the Harm Principle, James briefly brought up the issue of scalping (though he quickly moved on to sodomy, bestiality, and other amusements). I’ve never found the argument against anti-scalping laws persuasive, and I think there’s a strong case for banning scalping as a matter of contract enforcement and property law. If I’m a landlord, I may include a prohibition on subletting in the lease, because I have the right to specify who may use my property and under what circumstances. If I’m a homeowner and I invite a guest into my home, my guest can’t transfer that invitation to a stranger. Likewise, if I own a sports venue or theater, I have the option of renting out seats to specific individuals. Tickets can be person-specific.
The usual economic argument in favor of scalping is that if Jones sells his ticket to Smith, then Smith must value the ticket more than Jones, and both Smith and Jones are made better off by the transaction. This analysis is correct but incomplete, because there’s another party to consider – Williams, the owner of the venue. For whatever reason, Williams has chosen to sell Jones a person-specific ticket, not an anonymous-occupant ticket. If so, then when Jones scalps his ticket, he’s selling something that’s not his to sell. Never having obtained Johnson’s consent for Smith to be present in the venue, he can’t sell that consent to Smith.
Now, if there is a market for scalped tickets, it does demonstrate that the current (pre-scalping) distribution of tickets for a given event generates less value to consumers than would a different (post-scalping) distribution. But venue owners have no obligation to maximize consumer value for a single event, and they may have very good reasons for not doing so. For instance, rock bands might care about creating an enthusiastic fan base. They want an excited group of young people to fill the mosh pit, go home and tell their friends what a great time they had, create more buzz for the band, and generate greater album sales in the future. To attract these fans, the rock band might (through its ticket distributors) want to lower prices, even if that means having excess demand for tickets and obtaining lower total revenue. But legal scalping could short-circuit this mechanism, because straw buyers could buy up all the tickets at the low price and resell them at the profit-maximizing price.