Should Train Tickets Increase in Price During Spring Festival Travel?

Spring Festival travel is challenging, characterized by typical phenomena such as long queues and scalpers, which has led economists to eagerly discuss this topic as a classic example to illustrate the drawbacks of price controls.

Economists advocating for an increase in train ticket prices generally argue as follows, and I will attempt to paraphrase their points:

1. Price controls on train tickets lead to inflated demand and result in long queues;
2. Low train ticket prices attract scalpers who profit from the difference between the ticket price and the actual market price;
3. Low ticket prices hinder the transmission of price signals, causing people to perceive something that is not cheap as being cheap;
4. If train ticket prices were to increase, and scalpers could no longer make a profit, the cost of a train ticket would be the "monetary cost" of the ticket price;
5. When train ticket prices are controlled:

• If you accept scalpers, the cost of a train ticket is the "monetary cost" of the price set by the scalpers;
• If you refuse scalpers and insist on queuing to buy tickets yourself, then the cost of a train ticket includes the low "monetary cost" of the regulated price, as well as the energy cost of queuing, the time cost, the opportunity cost of labor during that time, and the risk of possibly not being able to buy a ticket at all, which together constitute the "non-monetary cost".

6. Points 4 and 5 provide three methods of calculating costs, where the total cost remains unchanged, only the "composition of costs" varies;
7. Even so, the human and material resources spent on managing scalpers, the corruption arising from the related rent-seeking opportunities, and the time lost in queuing that could have been used to create wealth result in a national waste;
8. Poor people are not necessarily those with stronger physical qualities (more suited to queuing) or those with better means; price controls do not genuinely help the poor. To assist the poor, monetary subsidies (charitable assistance) should be provided instead of price controls. We have many farcical examples of price controls;
9. If monetary subsidies were indeed given to the poor, they might use that money elsewhere: they could buy expensive train tickets to go home or purchase cheaper tickets in advance during the Spring Festival and then use the savings to buy other items to take home. After all, you cannot precisely know each person's needs and then provide them just enough money to buy a train ticket, which is why planned economies fail;
10. Increasing train ticket prices would suppress the inflated demand to a level that would not cause a "shortage" of tickets. Those who need to travel would do so in advance, those who can delay would delay, those who can fly would fly, and those who can take a bus would take a bus, allowing people to vote with their money for various travel options based on their individual needs. If someone truly cannot afford a ticket but wants to return home at a specific time, we could provide monetary subsidies to the poor based on points 8 and 9.

I believe the above viewpoints and arguments are all correct. I have even introduced related viewpoints to my colleagues during our weekly internal sharing sessions. However, a common flaw among scholars is that they are only proficient in their own fields and do not pay enough attention to other areas, lacking understanding.

In our country, railway transportation is entirely funded by the state, with investments amounting to hundreds of billions, and the return on investment is still far off. The money earned doesn't even keep up with the interest rates. Price controls not only trouble the common people but also strain the finances of the Ministry of Railways. However, if we were to remove price controls and allow train tickets to return to normal prices, what would happen as the Spring Festival approaches, with ticket prices rising day by day?

In the long run, train ticket prices will inevitably increase. In the short term, if everyone's income does not significantly rise, a sudden increase in train ticket prices will provoke widespread dissatisfaction among the public. Social unrest and conflicts between different groups will inevitably lead to stability maintenance costs. So the question arises: which is greater, the cost of maintaining stability or the costs described in point 7?

Every decision has its pros and cons. Economics and politics often conflict because they start from different points (you know...). Even though economists study real-world issues, they often propose "ideal" solutions based on economic theory, which can sometimes be detached from reality. It’s not that they are wrong or bad; it’s just that implementing price increases for train tickets during the Spring Festival indeed faces some resistance, difficulties, and costs.

For example, in high school physics, there exists a god-like entity that can do anything—the small block. Many discussions of physics problems often make an assumption of a "smooth plane," meaning that friction is not considered. However, in the real world, a completely frictionless plane does not exist, and sometimes friction is so significant that considering it can lead to conclusions that are entirely opposite to those reached without considering friction. But this does not mean that discussions under these ideal conditions are meaningless, nor does it imply that the laws of physics are a joke or that physicists are talking nonsense.