Paid line-standing v. congestion pricing: getting the economics right

A seat in a crowded committee hearing room is unlike space on a crowded freeway.

Yes, Michael Sandel demonstrates why people who can’t pass the Intro Micro final shouldn’t be allowed to vote. But our colleague Matt Kahn demonstrates why freshwater economists shouldn’t be allowed to vote, either. (Or write about political theory: if Sandel is “:the leading moral philosopher of our age” then Tom Friedman is its leading foreign-policy thinker and Judge Judy its leading jurist. There’s nothing valid in Sandel’s work that Michael Walzer didn’t say first, and better.)

As RBC commenter NCG points out, the example of lobbyists hiring “line-standers” for Congressional hearings is almost comically ill-chosen to illustrate Matt’s point. Yes, both the lobbyist and the person he hires to stand in line for him come out ahead, as demonstrated by their willingness to engage in the transaction. But the money-poor but time-rich ordinary citizen who doesn’t get in to the hearing because the paid line-stander is willing to show up earlier comes out behind. So, of course, do the victims of whatever piece of plutocratic legislation the lobbyist is there to advance.

So there are two reasons to make this a “blocked transaction”: it’s about a purely positional good (paying line-standers doesn’t produce more places in the hearing room) and it’s about the contest for political power. (Matt’s reasoning can also prove that bribing voters should be allowed, since both the bribor and the bribee come out ahead.)

[Note also that, instead of allowing paid line-standers, it would be unarguably more efficient to simply auction off seats in the hearing room. I think it could be shown that  there is no case in which it is true that (1) rationing-by-waiting is the right way to allocate a good and (2) people should be allowed to get around rationing-by-waiting by paying proxies to wait for them.]

None of this requires going outside the rubric of economics, merely applying that rubric correctly, based on the phenomena under consideration. And that’s why I, as opposed to NCG, object to paid line-standers for hearings but support congestion pricing on highways.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact:

6 thoughts on “Paid line-standing v. congestion pricing: getting the economics right”

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    Mark’s argument is right. But it’s not only a matter of some people gaining and some losing. Paying for standing in line can reduce overall welfare relative to simple rationing by queues. So, it’s not only a matter of distribution. There were a couple of papers on this issue long time ago in the Journal of Economic Theory out of all places. The highly accessible treatment (example, really) is here: and a rather technical paper is here: (unfortunately both papers are available to ScienceDirect subscribers only)

  2. I can give you a case in which rationing by waiting makes perfect ethical sense. Amoeba has free shows by some excellent musicians, and you can’t pay to get in one. They are free, and they let in only so many people as fit. You have to wait in line. That means that the most attentive and enthusiastic fans get in. QED. Who else *should* get in? (I’ve never heard of anyone trying to pay a line-waiter for one of these. You’d have to be a really sad person.) And they are at night usually, so working people can at least have a ghost of a chance.

    But what do you mean by, the “right” way to allocate a good? Efficiency is only one goal in my world, not the only one, as it is for people like Kahn.

    My objections to congestion pricing, which are mostly local, really have more to do with the deceptive way they are being implemented here in LA. People were told the carpool lanes were to save the environment, and now we come to find, no they are there to save rich people time. Surely you can see how this might upset a body. If people voted for them, I would still probably be against them, but not as much. There is so much going wrong here that they aren’t high up the list. (Though, I am also against carpool lanes, but that’s for safety reasons.)

    1. That means that the most attentive and enthusiastic fans get in. QED. Who else *should* get in?

      I’d say that ought to be up to Amoeba, which I take it is a club or theater. That leads in turn to one of the banes of “free-market” thinking: anti-scalping laws.

      Does the club, or the performer, have a right to require that attendees stand in line for a long time in order to attend the performance, enforcing the requirement by charging low prices for tickets?

      1. Ah, you must visit Amoeba!!! It’s like one of the last real record stores in existence!!! There’s one in Berkeley, one in Hollywood, and I think one in SF too. The shows are free. I’m not sure how they get these great acts but they do. Every arty college grad that you’ve ever met works there. Actual knowledgeable sales help. And they sell used. It’s a fantastic place. You can knock off your entire holiday list there.

        Come to think of it, their parking (at least in Hollywood) is free too. But, you do have to wait sometimes.

  3. Here’s the thing — my guess is, Kahn doesn’t really believe influence should be for sale. (He can’t be *that* bad, can he?) So my guess is he just overreacted. And anyway, in retrospect, I probably overinterpreted the scenario to begin with. What I object to, mostly, is the idea of rich people having special access. But hearings should all be streamed over the web, so who would need to get into one? (I’ve never been to one — it’s not like the City Council, where you can sign up to talk, is it? You just sit there and watch?)

    I wonder though if the idea that political power shouldn’t be purchased is in fact part of the economic canon, as you seem to say? I’ve studied it plenty, and I honestly don’t remember!

  4. In a world with a much lower rate of inequality and a much higher rate of transparency, line-standing jobs might not be a big deal — the prices would be more equitable, and people would know about it ahead of time. But when a small group at the top has more wealth and disposable income than the entire rest of the polity, that small group can effectively buy not merely access but exclusive access to everything that others might want. (Yes, I know, that’s not necessarily rational, but markets aren’t rational.)

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