Why does everyone want to make the country poorer?

We are richest when the things that we have, that exist, are held, used by, those who value them most - this extends to we are richest when things are employed in their highest value uses. On the very simple and logical basis that if things are with those who value them most then we are gaining the maximum value from those things:

Reselling tickets for profit is to be outlawed under plans due to be announced this week, the Guardian has learned, as the government goes ahead with a long-awaited crackdown on touts and resale platforms such as Viagogo and StubHub.

Ministers had been considering allowing touts – and ordinary consumers – to sell on a ticket for up to 30% above the original face value, as part of a consultation process that ended earlier this year.

However, the Guardian understands that reselling a ticket at anything more than the price at which it was originally bought will be banned.

This then poses a problem - why this insistence upon making us all, collectively, poorer than we need to be by placing obstacles in the way of movement of this scarce resource, tickets, from those who value them more lowly to those who do so more highly?

To adapt from Ronald Coase. The initial allocation doesn’t matter very much as long as we have an efficient market to reallocate across those perceived valuations. In that manner the market in who will pay the most allocates the resource across to those who value it the most. We’re done - society is as rich as it can be given that resource endowment by allocating the scarce to those applying the highest value to it.

The lesson from this is that banning the price mechanism here is contraindicated.

But we can and should go further. As Coase points out markets are rarely efficient enough for this to fully apply. Transactions costs always do get in the way. Thus maximisation of societal value from the scarcity would come from subsidy of the marketplace - to reduce those transactions costs - but with unconstrained pricing.

That is, the logically correct plan is that government pays the Viagogo fees and anyone gets to profit as much as they can from whatever price is offered. This is not the plan on offer, is it?

So much for joined up government now the adults are back in the room.

Tim Worstall