Oasis, Ticketmaster and the price of economic ignorance

In the U.S., ignorance of economics shows up in debates over price gouging and trade protectionism. These topics are boring and easy for politicians to lie about, especially to voters unfamiliar with the elegant simplicity of supply and demand. On the other side of the Atlantic, economic ignorance comes in sexier packaging. It has a backbeat.

Oasis is an English rock band whose core members are the quarrelsome siblings Liam and Noel Gallagher. Even those unfamiliar with Britpop-era hits such as “Wonderwall" and “Champagne Supernova" might have heard about the brothers’ squabbling. Oasis has historically had trouble staying together. Their most recent split lasted 15 years, during which time fans prayed constantly for a reunion. Speculation about the potential end of the great Gallagher estrangement was a British media staple.

Last month the boys buried the hatchet and announced a series of 2025 concerts. Delirious fans who were young and relatively poor during the band’s heyday are now older and relatively rich. They have the willingness and ability to pay to see Oasis in concert. Economically speaking, that’s called demand.

But demand is only one side of the economic story, morning glory. For the moment at least, the Oasis reunion is limited to a handful of shows. Wembley Stadium is large but not infinitely so, and there’s no guarantee the brothers will remain on speaking terms beyond next summer. Fans understand that this may be their last chance to see the Gallagher lads together onstage. Supply is limited.

Introductory economics tells us that when supply is tight and demand is high, prices rise to an equilibrium, which is exactly what happened. Oasis reunion tickets were initially priced at £150, or about $200. This proved far too low. When the online sale went live, Ticketmaster’s “dynamic pricing" system instantly adjusted prices upward. Some ticket buyers reported paying more than £400.

Some accused the greedy brothers of ripping off their loyal fans. Many more aimed their fury at Ticketmaster, the American ticket-sales behemoth owned by Live Nation Entertainment. The furor revealed a terrible ignorance, even among the highly educated, of what prices are and how they work.

Prime Minister Keir Starmer told the House of Commons that he found it “depressing" to hear of the Oasis “price hikes." He promised a commission to investigate what he called “extortionate price resales." Culture Secretary Lisa Nandy told the BBC that “vastly inflated prices" would exclude “ordinary fans."

Bollocks. In economic terms, a concert ticket is no different from a book, a bottle of wine or a house. It has no inherent value, only the price a buyer is willing to pay and a seller is willing to accept. The market-clearing price of anything is where demand meets supply. The correct and fair price is whatever the market will bear. No buyer has a right to a low price, just as no seller has a right to a high price.

Oasis could be nice guys and sell their tickets for $5, but scalpers would snatch them all up and resell them for more. Significantly more, as it turns out. What good would it do Oasis, or the ordinary fan, to allow third-party resellers to capture all that value?

A high price doesn’t indicate greed any more than a low price indicates generosity. Absent force or fraud, price reflects the point at which buyer and seller both agree that the transaction makes each of them better off. The beauty of it is that economic exchange in a free market is entirely voluntary. Oasis doesn’t have to play, and you don’t have to pay. Who’s getting ripped off?

After a decade of public experience with ride-sharing apps like Uber, you’d think consumers would have honed their understanding of how the price mechanism works. Sadly, Oasisgate suggests this isn’t the case.

But what about Ticketmaster? Surely it adds nothing so valuable to the transaction as to justify the rise in price. In fact, this is where the story gets interesting. Ticketmaster makes for a convenient villain. But, as music industry guru Bob Lefsetz explains, that’s its job. “The acts hide behind Ticketmaster," he writes in a recent newsletter. Bands like Oasis want to cash in on their popularity, but they don’t want to be seen charging $1,000 a seat for their concerts. That isn’t the image Gallagher brothers have spent their 30-year career cultivating.

Ticketmaster, on the other hand, writes Mr. Lefsetz, “makes no music, it’s inert, and therefore it can accept all the blame." The dirty little secret: “Ticketmaster does nothing that the band does not agree to." The key thing to remember is that nobody got hurt here. Everyone is going home happy: the band, Ticketmaster and especially Oasis fans who finally get the chance to see the reunion they never thought possible.

Don’t let anyone tell you that free markets are a ripoff. Mutual satisfaction is their great selling point. If you’re one of the lucky ones who managed to snag a ticket, stop crying your heart out. Roll with it. Liam and Noel aren’t going to live forever.

Mr. Hennessey is the Journal’s deputy editorial features editor and author of “Visible Hand: A Wealth of Notions on the Miracle of the Market."