We often use money (price) to allocate scarce resources. Are there instances where we should rather use time?
New York’s Public Theater has a long standing tradition of offering public performances of Shakespeare’s plays in Central Park. Free tickets to the shows are available, but since demand for these tickets is so high, people often queue up hours in advance. The presence of these long lines has created a cottage industry of people who stand in line and sell their free tickets to willing customers. Much to the theatre’s chagrin, scalpers can sell these tickets sell for as much as $125 a pop.
By offering free tickets to people who wait, the theater uses time to allocate scarce tickets. The people who queue up to sell them later trade in their time for money. Yet this defeats the spirit of the initiative – those free theater performances should be open to everybody. They are gifts that are not for sale. But free market economists tend to disagree. They argue that markets allocate goods and services most fairly since markets ensure that they reach the people who value them the most, as indicated by their willingness to pay.
However, let us look closer at that argument. Does a high price always make me value something more? Would a rich business executive who is busy on his phone in a Michelin star restaurant value the experience more than an aspiring chef who cannot afford it? Buying something isn’t merely a measure of how much I value something – it is also a measure of my ability to afford it. It is this second factor that dilutes the economists’ argument.
If, instead, you made the tickets to ‘Shakespeare in the Park’ non-transferable and insisted that people wait in line for their tickets, free market proponents would argue that you discriminate in favour of people who have more free time. They are right – discrimination is inevitable in the allocation of scarce goods.
However, for a ticket to a theatre performance that is open to all, isn’t time a fairer means to discriminate, given that we all have the same 24 hours?
Inspiration: What Money Can’t Buy: The Moral Limits of Markets