A Reminder That Today’s ‘Inflation’ Quite Simply Isn’t Inflation

Super Bowl XXI took place on January 25, 1987 at Pasadena’s Rose Bowl. The matchup was between the New York Giants and the Denver Broncos. The Giants were heavily favored.

I was lucky enough to attend. My father got tickets for my mother and me, and then he went separately with clients. The Super Bowl is something that must be experienced in person to be believed.

I say this because I entered the Rose Bowl with low expectations given my substantial preference for college football. Yet I exited glowing. There’s something different about the Super Bowl. As Hall of Famer Michael Irvin once put it (this is a paraphrase), “I’ve walked through a lot of tunnels, but none compared to walking out of the Rose Bowl’s” in 1993 when the Dallas Cowboys of the Jimmy Johnson/Jerry Jones era made their first Super Bowl appearance. There’s an indescribable, but very exciting quality to it all.

After the game, and at home with my parents, my dad told us about some Giants fans sitting behind his group at the game. These weren’t celebrities. They were what Sarah Palin would modernly describe as people from “Real America.” They’d made the trek out west to see their team roll over the Broncos. During the game, they took out one of those brick size Motorola phones immortalized in the 1987 film Wall Street. They’d rented it for the game, only to call friends back home to give them a taste of the atmosphere. It was a fun for my dad to witness their excitement.

Of course, and as with all things, there’s an economic story to what took place. The face value of tickets to Super Bowl XXI was $75. Memory says our actual tickets cost a little bit more, but certainly not a lot more. I know this because a scalped ticket for Super Bowl XXVII (it similarly took place at the Rose Bowl in 1993) sold for roughly $500.

Fast forward to the present, and the starting price for a scalped ticket to Super Bowl LVII is in the $10,000 range, with really good seats going for $40,000 and up. The world has changed in a lot of ways since the late ‘80s and early ‘90s, and part of the change is that the NFL has well eclipsed other professional sports leagues in terms of popularity. The latter is vivified by the cost of tickets to this Sunday’s game.

What rates asking with soaring Super Bowl ticket prices in mind is whether or not this signals inflation? The answer is a resounding no. Prices go up and down all the time. It’s how a market economy organizes itself.

Crucial is that scarcity isn’t inflation, rather it’s scarcity. Fan interest in the NFL’s championship game well exceeds tickets available, which means the cost of a ticket has gone skyward.

Life is about tradeoffs, and some are willing to give up $10,000+ to watch Sunday’s game in person. This means those in attendance will have $10,000+ fewer dollars to spend after Sunday. So while inflation is a devaluation of the currency as is, nosebleed expensive Super Bowl tickets logically signal reduced demand for other goods and services. In a market economy a rising or soaring price signals falling or plummeting prices elsewhere. “Inflation” on the matter of Super Bowl tickets is a non sequitur.

Which brings us back to those “Real Americans” who’d rented a phone for the game. It cannot be stressed enough how coveted these Motorola phones once were. They screamed immense wealth just because so few had them. They retailed for $3,995, but that was just the beginning. To place a call on them was very costly in terms of minutes and “roaming charges.” Those Giants fans behind my dad surely paid through the nose to call friends back in New York, but the Super Bowl has once-in-a-lifetime qualities. Plus they probably had had a bit to drink.

While the sighting of a Motorola in 1987 was cause for stopping to gawk, it’s no exaggeration to write that every single attendee of Sunday’s Super Bowl XVII will arrive with smartphone in hand, not to mention that every one of the hundreds of millions (billions?) watching on TV will similarly have one in hand. The capitalist profit motive has turned the once obscure phone into a common good. Deflation? Not at all. Abundance isn’t deflationary, rather it’s just abundance. This is what the enterprising do for us.

Furthermore, the plummeting cost of smartphones, calls, and other former luxuries signal yet another form of tradeoff. Since they cost less and less, we now have more dollars to bid up other market goods, including apparently, Super Bowl tickets. No inflation or deflation, though it’s interesting to note that the very men who sat behind my dad in 1987 likely couldn’t afford to attend a Super Bowl today, but they could and likely do afford technology that mocks what they brought to the Rose Bowl.

As for what it all means about today’s “inflation,” global imposition of command and control in 2020 by politicians panicking about the coronavirus compromised production relationships built up over decades by workers around the world. The impairment of global cooperation that made so much so inexpensive (including smartphones) has logically resulted in higher prices for many goods today. Inflation? Once again, no. Command and control isn’t inflationary, it’s just command and control.