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Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.

Tuesday, March 13, 2012

A Rational Case Against the Irrationality of Tipping

[We are pleased to welcome Greg, who most recently wrote on Rationally Speaking about dietary pet views, among our staff contributors. Welcome aboard, Greg!]

by Greg Linster

At many restaurants in the United States you are served by a waiter or waitress who is paid a dismally low wage, usually one that is so low that the server wouldn’t do their job without the possibility of tips. Whatever the reason, consumers generally tend to find this situation palatable and participate in this bizarre cultural custom called tipping, where the diner leaves a tip in the 10-25 percent range based on the perceived quality of the service.

In microeconomics one of the assumptions (insert your favorite economist joke here) is that agents are rational, i.e, amongst other things, agents are utility maximizers. If real people actually behaved this way, though, they wouldn’t leave tips. Here’s why: when the check arrives the service has already been performed and either the diner gets to keep their money or they can give it to the server. What would the rational agent do? Certainly she wouldn’t just give money away that she could keep for herself — after-all, money provides a store of value and she’s a utility maximizer!

Some people object to this claim on legal grounds. While one certainly has a legal obligation to pay the bill, there is, however, no such legal requirement to leave a tip. Gauche as it might be, it’s not illegal to pay your bill at a restaurant and then leave without tipping. Therefore, economic theory tells us that a rational agent shouldn’t leave a tip at a restaurant, yet I’ll venture a guess that most people actually leave quite generous tips. How can this be?

First of all, I suspect that some rational people still tip because they feel compelled to by the non-financial benefits that come with following social norms. A failure to tip could cause one to be deemed as cheap or stingy by family, friends, or colleagues. Another reason might be because the diner frequents a restaurant often and wants good service the next time they come back. I think many people simply value these types of non-financial benefits more than they do the financial cost of the tip.

So that may explain why some people tip, but it’s still not a sufficient explanation. Here’s a little thought experiment: let’s suppose you were on a business trip in a place you’ll likely never visit again, say, Fargo, ND. Furthermore, let’s suppose you have just finished a meal at a restaurant by yourself and have just paid the bill. Here, then, is the question: would you leave a tip with no social capital at stake? If you would still leave a tip in this situation then you might not be as rational as economic theory portrays you.

Essentially, I think the cultural practice of tipping allows restaurant owners to unfairly transfer risk to the servers. In other words, a stingy, but legally compliant customer can harm the servers’ bottom line, but not the restaurants’. Additionally, there is a lot of cultural ambiguity when it comes to situations in which we are supposed to tip (including situations outside of restaurants). Foreign diners, for example, may be unaware that they are supposed to tip in the United States. What I want to argue is that both consumers and servers would benefit from abolishing the cultural practice of tipping. Abolishing tipping will help servers be exposed to less risk and it would alleviate much of the confusion about situations that do and don’t warrant tips.

For the sake of making this a dialectical argument, let’s examine some of the reasons why the cultural practice of tipping might be a positive thing. First off, servers may claim (in fact I’ve heard some friends say this) that while some customers may stiff them, others may tip very graciously. If that’s the case, I think we need to figure out the net effect. Also, it’s often believed that servers wouldn’t perform their services if there were no possibility to make a tip, but that can’t possibly be true. Many service personnel (e.g., grocery baggers and auto mechanics) adequately fulfill their duties without the presence of a tip, so I’m quite perplexed by this argument.

In line with that last point, I’ve become increasingly interested in the following question: why is there a cultural norm to tip servers at restaurants, bellhops, and taxi drivers, but not clerks at the grocery? How do these norms develop in the first place? Strangely, when I visit the grocery store my groceries usually get bagged quite well. And my car mechanic, who arguably has a much more important job in terms of protecting my safety than does a server at a restaurant, does not accept tips. He does his job astoundingly well too.

I think the explanation for this problem is rather simple, the true cost of the service, in this case bagging groceries or car maintenance, is actually reflected in the explicit price, which I conveniently know upfront. If the wages for these professions weren’t fair, people wouldn’t do the work. Shouldn’t the same thing be true of servers in a restaurant?

Let’s say that restaurant owners raised their prices by 20 percent and paid their servers appropriately according to the market signals. Servers would, then, be paid a wage that reflects the true cost of their service and skills, just like grocery baggers and auto mechanics. The restaurant owner would simply reflect this additional cost in the menu prices. The $10 meal would now cost $12.

While it’s unlikely that the irrational practice of tipping will become antiquated any time soon, I hope that I’ve demonstrated that it is, at least theoretically, problematic and that the arguments for keeping it are rather weak. Irrational as it may be, I will continue to tip quite generously until something does change.


  1. In Argentina tipping your waiter is also common practice and I completely agree with your arguments.

  2. I think this is a classic case of reciprocal altruism. You pay a tip and the next time you will get a better service. If I remember correctly, there was a study that shows that people tend to give lower tips when they stop at random places that they are unlikely to return to.

    In addition, reputation is very important for people and a hefty tip can make you look very benevolent among peers and family, certainly something very desirable.

    Lastly, while it may not be illegal not to tip this can make tou feel very uncomfortable. It is not uncommon for waiters to pursue people that didn't tip them and ask them to do so (or give them an explanation). This can be very uncofortable and people would like to avoid that.

  3. You've gotten a number of things incorrect about the tipping process. As a former waiter, let me clarify for you:

    First, in New York, at least, servers pay taxes on their tips *based upon sales*...so if you purchase $100 of food from that waiter, they are going to pay taxes on $18 of tips, whether you leave them a 5% tip or a 25% tip.

    A waiter who can't make the system financially profitable is going to leave and find another line of work: QUICKLY!

    Second, most servers share their tips. They have to "tip out" the bartender, the bus boy, the bar back, the dishwasher, the host, and even the manager...all the while paying the taxes themselves on their full tip. Those other parties pay no tax on their "tip out". Be sure to include that in your rationality.

    Third, "Foreign diners may be unaware that they are supposed to tip in the US"? Maybe only if they're foreign from Uranus. Trust me...nowadays, everybody worldwide knows about the tipping structure. EVERYBODY. Using the "I'm foreign so I didn't know" is an unethical, cheap cop-out. And most people who use it don't get good service upon their return to the restaurant...if they are able to be seated at all. Restaurants have computer systems not, and most restaurants keep detailed notes -provided by servers- on their customers preferences and habits.

    Fourth, waiting tables isn't a career goal. It's a part-time or temporary gig while waiting to land a job in the theater or while going to school. The costs of uniform laundering is often (illegally) paid for by the server. Training is unpaid. No 4 year old says, "When I grow up, I want to sling coffee in a diner 10 hours a day!"

    Because of these reasons, raising meal prices 20% (or even 30%, I would estimate) and eliminating the tipping policy altogether wouldn't ever make up for any discrepancy in the system...especially in a costly and work-ephemeral large city, like New York.

    1. And how do you explain that the custom of tipping does NOT exist in many other countries?

    2. He doesn't have to explain why the practice doesn't exist in other countries. His point was that people are not ignorant of practice of tipping. I there needs to be an explanation then I think he made it obvious that you would have to examine the tax policies of that country and the business practices of how they pay their waitstaff.

    3. His sampling of restaurant behavior is also rather shallow. In my experience, only bartenders are tipped in (and then, only on drinks). Even when restaurants use computer systems, I simply cannot believe my experience was such a minority while "most restaurants keep detailed notes -provided by servers- on their customers preferences and habits." Finally, to say waiting tables isn't a career may be true for him, but it can become a career for many people.

    4. I agree with Mark. Some of my friends have waited tables and they tell me that their tips get pooled and split evenly regardless of who gives better service. And the government takes a nice little bite as well. That's why I tip in cash whenever I can. Hopefully they can keep their tips away from Uncle Sam.

      I'm originally from India. Waiters there typically get 5-10% in tips. But I knew the American tipping culture before I came here. So I guess I hit the ground running.

  4. Massimo,

    The premise of your post is incorrect because your understanding of what rationality means in economics is incorrect. Rational in economics means consistent behavior that can be represented mathematically by a utility function. Consistent behavior need not be selfish, so tipping can actually be perfectly rational according to what the term means for economists.

    It is true that economists often add an additional assumption that people act selfishly, but this is a separate assumption from rationality that is made for tractability, but it is not a rationality assumption.

    1. Mike, I believe I addressed this point when I wrote: "I suspect that some rational people still tip because they feel compelled to by the non-financial benefits that come with following social norms." In other words, I realize that you can maximize your utility in both financial and non-financial terms.

      Does that clarify it or am I still not understanding your point?

    2. In a sense yes, but technically no.

      Yes in that non-monetary, pro-social, and other factors can be represented in utility functions. However...

      No because your use of rationality in that sentence conflates the rationality in economics with instrumental rationality. It's a subtle distinction. Rationality in economics is defined as behavior that is consistent with particular axioms. If behavior has this consistency, then the person acts AS IF she has a utility function that she maximizes. Notice that she doesn't actually have utility or a utility function or even objectives. She just behaves.

      So in short: economic rationality does not equal selfishness; and economic rationality does not equal instrumental rationality.

      Any interpretation which attributes instrumental action is neither implied nor necessary. Such interpretations are often useful, but they are technically not a part of the theory. And more to the point, they lead us into misconstruing what rationality means in economics.

      But this is a technicality that doesn't undermine the main point of your post which is about instrumental rationality and tipping. Which I, by the way, I liked. So I need to correct what I wrote earlier. The premise of your post is not incorrect, but the motivation referencing economists' rationality was.

      Thanks for posting it! I only recently started following this blog, and I'm enjoying it. (And sorry I called you Massimo.)

    3. No worries on the name :)

      Perhaps I'm missing something, but I'm still confused.

      Are you defining "instrumental rationality" to mean seeking the most cost-effective means to achieve a specific goal without reflecting on the worthiness of that goal? If so, how do you think this is different from the rationality economists use?

      If we start with the assumption that people are economically rational (i.e., utility maximizers) then it's tautological, but nonetheless true, to claim that whatever they do must maximize their utility. If they tip, for example, they must be maximizing their utility somehow (which was my point for that part quoted above).

      Anyway, I'm glad to hear you enjoyed the post and thanks for making me think.

  5. I'd also point out that from what I've experienced abroad, and from what my globe-travelling relatives have told me, countries with tipping based cultures have significantly better service on average. If we're doing a survey here, that should definitely be examined in better detail.

  6. Tipping is not common at all in Australia and during a brief visit to the US I found the expectation of it rather uncomfortable.

    My gut reaction is that, like omitting sales tax from list prices, it's another way to trick customers into thinking they're paying less than they really are. And an excuse to justify a terrible wage.

    Your thought about putting the risk on to the server instead of the company was something I hadn't thought of. Very interesting.

    1. I didn't realize that tipping was uncommon in Australia. Thanks for sharing that!

      Also, I think you bring up a great point about the pricing subterfuge.

    2. Ditto the Australian comment for New Zealand.
      Service here is generally good, certainly I've travelled to the US and elsewhere and the service is at least comparable.

      The tax thing is really, really annoying.

  7. I was going to mention Australia, and then I see that meisteh has beaten me to it. Service in Australia is no worse than anywhere else. I was in New York (the only part of the US I have visited) and I received appalling rude service at a cafe, and consequently left no tip at all and no intention of returning.

    Barbara Ehrenreich in Nickel and Dimed describes waitressing in small town USA, particularly remembering a large Christian family who kept her running around for 2 hours and left a dollar tip. Clearly NO investment in social capital, and NO qualms about being thought of as tight.

    I do not like the system as it definitely appears to perpetuate a 'better than you' mentality. The person is punished if they are insufficiently servile. It also sounds complicated and fraught with all kinds of options for unfairness and corruption. I have heard of employers who decide how much of the tips they will keep for themselves, in spite of the staff supposedly keeping all their tips.

    1. I agree, the prospect of a tip doesn't necessarily guarantee better service.

  8. Interesting topic and nice writing, but I think the analysis is off-based on basic points. First, I disagree that someone who leaves a good tip in a restaurant that she will never frequent again is economically irrational, i.e., failing to be a rational maximizer. Here's why: Meeting financial obligations is, or should be, a constraint on rational maximizers; i.e., meeting fair financial obligations is never irrational, even when the agent could get away with defaulting on them. Now when a culturally literate diner enters a restaurant, she is aware that she is entering a tacit contract to tip within a certain range based on the performance of the wait-person. Though this contract is merely ethical, as opposed to legal, I think the context is sufficient to establish a fair financial obligation on the part of the diner. Given that the paying the tip is a fair obligation, the choice of pay/not pay is removed from rational maximization considerations.

    A second point of disagreement is that the tipping model unfairly transfers risk from the restaurant to the wait-person. The model (in theory) transfers only the part of the risk that the wait-person has control over--quality of service--while keeping other risks with the restaurant, such as quality of food and general environment. Comparison with grocery clerks and baggers is inappropriate because the performance range and significance of those jobs is much smaller than that of a wait-person; while groceries can be rung and bagged only so poorly and so well, and not a lot is at stake either way, a wait-person has the potential to ruin a very expensive dinner, an important meeting, date, birthday, reunion, etc. Good waiting is something very valuable culturally, and the tipping model incentivizes quality in that domain.

    1. pmpaolini, thanks for the kind words on the writing!

      In regards to your first point, I think you're misusing the word "obligation" when you refer to tips. One is legally obligated to pay the bill, but there is no explicit obligation to leave a tip. If you're suggesting that there is a cultural norm that drives people to leave tips and that some people gain more utility from following cultural norms than they do having extra funds, then I agree.

      As for your second point, let's scrap the grocery bagger and use an auto mechanic instead. Are you suggesting that a mechanic's job isn't as significant as a server's? I would argue that it's more significant. I can live with bad service at a restaurant, but if I get bad service at my auto mechanic my life could be in serious danger.

      You write: "the tipping model incentivizes quality in that domain." Why wouldn't higher wages do the same?

    2. You appear to be suggesting there is no difference between an ethical concern and a social norm, which is not the case. Choosing not to tip is unethical. This is not merely a social norm. People tip not because of pressure to adhere to the norm and be like others, but because they feel that if they do not do so, they will be breaking their own ethical code. It isn't a case of social norms, it's a case of trying to do things that are consistent with basic cognitions like "I am a good person." The definition of "good person" may be a socially constructed norm, but (generally) the reason for taking the action has little to do with conforming to that norm, and more to do with conforming to an internal image of the self.

    3. Puppyclaws,

      //Choosing not to tip is unethical.//

      //It isn't a case of social norms, it's a case of trying to do things that are consistent with basic cognitions like "I am a good person." //

      On what basis are you saying that? How does ethics dictate one "should" tip the waiter?

      Yes, today it has become a convention to tip, but here the author is questioning the very usefulness of that convention, and shows how abolishing the convention can benefit both diners and waiters.

      It is a waiter's job to serve, just like it is a mechanic's job to fix a car, for which he/she is receiving a pay from the employer. But their pay being low is not a diner's problem. Therefore, diners have no obligation towards waiters. There are many industries where people make little money. The pay depends on the skills required for the work and market conditions. In any case, it has to be negotiated with the employer and not with the consumers of the service. The consumers given an invoice, and that they liable to pay that amount only.

      If some waiter extends extra nice manners to which one feels like tipping, that's alright. But providing a good service also doesn't oblige one to tip. Honestly, I wouldn't want a waiter to be nice if he/she is just doing that to receive a tip.

      If nice behavior from others puts one under obligation to pay them them money, what's the point of nicety?

      Besides, has anyone considered this: the wage of the waiting industry is low because the employers know the waiters receive tips, or the waiters have to reply on tips because the wage is low?

    4. Puppyclaws,

      First off, I think we may have some fundamental disagreements about the nature of humanity. I think you're underestimating the power of social norms.

      Also, I think there is absolutely a difference between an ethical concern and a social norm. I'm not sure where you picked up on that.

      You wrote: "Choosing not to tip is unethical." It may be gauche, but I'm not sure it's unethical. Is it unethical not to tip your grocery bagger? If not, explain to me why. Personally, I think the answer is "no" because there isn't a social norm which drives us to do so. I may think grocery baggers are underpaid, but because there is no social norm I don't have an ethical obligation to tip them anyway, right?

    5. "...a wait-person has the potential to ruin a very expensive dinner, an important meeting, date, birthday, reunion, etc. Good waiting is something very valuable culturally, and the tipping model incentivizes quality in that domain."

      How so? With the tipping culture being the way it is for so long, that potential would have disappeared? If you know you're guaranteed at least a 15% tip, where's the incentive to do your job any different?

      In my book, you either do your job right, or you don't. Ruining my dining experience should get you fired not get you tipped 15% instead of 25%.

  9. Let's not forget that your waiter/waitress is the only line of defense against a cook who does not put out the best food for the customer either because of his own practices or because of the system in place in that particular kitchen. So it is not just a case of service, it may also be the fact that you owe something of the quality of the food to your server, but in this case the contribution is invisible. Check with any servers you may know, and ask them if they have ever refused to take food to the customer.

  10. Greg,

    I'm assuming that there are ethical obligations as well as legal obligations. Do you deny that there are such things as ethical obligations? At any rate, 'obligation' is more general than legal obligation in meaning, so you're misunderstanding the term if you take 'obligation' to be synonymous with 'legal obligation'.

    If a wait person got higher wages rather than tips, she would have no financial motive to provide service above the minimum needed to keep her job. My guess is that would affect service.

    1. pmpaolini,

      No, I'm not denying that. I don't think tipping is an ethical obligation though. It may be tacky not to do it, but not unethical.

      Some questions to consider in regards to your second point: Then why do other people in service based jobs like, say, auto mechanics do their jobs without the possibility of tips? And why (as meisteh and scepticon have mentioned) do Aussie and Kiwi servers do their jobs without tips?

  11. These sentiments resonate with me. Check out http://lifeofgenius.com for similar conversations.

  12. Pmpaolini,

    //If a wait person got higher wages rather than tips, she would have no financial motive to provide service above the minimum needed to keep her job.//

    Not meaning to offend but I disagree.

    When there is no tipping system, there still is motivation for performing well at one's job because that means job security. (Look at other sectors, e.g. corporate.) There would be competition among waiters, and popular ones (who likely would be well performing ones) have better job security, as opposed to the one who is, say, unfriendly or rude.

    Also, I think sticking to the "minimum needed" to keep the job should be fine with most diners. If some waiter goes "out of the way" to give better service, that should be to secure better position at his/her workplace, or just our of courtesy, and not to oblige the diner to pay tips. Because, I don't think any diner would agree that a waiter has an obligation to do "more than minimum needed"; and I am sure the "minimum needed" excludes rudeness, et all.

    1. With no tipping, you pay the full bill regardless of service or food quality. With tipping, you are allowed to withhold some payment for poor quality of either food or service.
      Having eaten in many countries where you're at the mercy of the establishment, I'll go for the tipping option every time.

    2. //With no tipping, you pay the full bill regardless of service or food quality. With tipping, you are allowed to withhold some payment for poor quality of either food or service.//

      What are you saying? One pays the full bill (meaning, the billed amount), always, regardless of food quality and service, as long as the food is not terrible and service is not insulting!

      Tipping is not a part of the bill. And the bill amount is all inclusive. With tipping one is paying over and above the bill amount, which is why it can not be mandatory and it's not unethical to not tip.

    3. Do I really have to point out to you that the full bill with a no tipping policy is non negotiable? And that the full bill where tipping is expected includes what you feel obligated (or not) to tip?
      Or was this a quibble about the definition of a bill?

    4. //Do I really have to point out to you that the full bill with a no tipping policy is non negotiable? And that the full bill where tipping is expected includes what you feel obligated (or not) to tip?//

      Are you saying that in the latter case the bill contains an item called "expected tip" the amount of which is added in the "total bill amount"? I would be surprised if that be the case!

    5. The bill where tipping is expected has a space where you then write in the figure that is occasionally unexpected,

  13. pmpaolini,

    agreeing with Darshan, here: while it sounds true that with wages instead of tips there is no "extra" financial motivation, why you do assume that "the minimum required to keep her job" equals bad service? I travel a lot, and my completely unscientific sample doesn't show the US to have better service than other countries with lower tipping rates. In fact, average service quality seems to correlate a lot more with a general "friendliness index" (as in the population of New York, Paris, Berlin is more rude than other areas of the same country) than with tipping schemes. There seems to be a lot of research on the effects of tipping, but hardly anything across countries.

    It is interesting that nobody took Greg up on his mechanic example: why should we tip waiters but not mechanics whose service is a lot more important?

  14. I agree completely.

    Another point against the tipping system is that the waiter's tip often depends on more than just their service. An extremely good tasting meal, along with the superb decor and the cleanliness of the restaurant earn the waiter a higher tip, and the reverse is also true.

    If the tipping system was transferred to buying a car, you'd one amount to the car manufacturer for the complete package, and then provide separate "tips" to the folks making the car windows, doors, onboard computer, AC system, etc. According to the tipping logic, that would incetivize them to improve the quality of their specific product parts.

    But it makes for a much better system when the restaurant owner and the car manufacturer are responsible for the whole of their establishments, finding the best servers, cooks, etc. to make their businesses run smoothly and bring in money and happy customers. Let customers leave feedback and improve the service based on that.

  15. In addition, it's nice that we all (or most of us) agree here. But unfortunately, I don't see the system changing anytime soon :/

  16. "Let’s say that restaurant owners raised their prices by 20 percent and paid their servers appropriately according to the market signals".

    What about if owners keep their prices, and start to gain less than their higher incomes, make the servers owners too and then all of us gain something...

    Perharps it never gonna happens and then off course the market need goverment intervention to keep tracking unethical current market rules.

    By the way, I hate that someone has to serving me for money...

  17. Greg, and others,

    I'm somewhat agnostic on the complicated matter of whether the tipping system is good system, as I'm not in a position to do the thinking and research needed to arrive at a defensible answer, so I will bow out of that part of the discussion. What interests me is the question of whether it is unethical not to tip and how this question bears on the matter of whether tipping is in any sense irrational. In my experience, if I went to a fine restaurant and the wait-person, through conscientious effort, gave me a great experience, I would feel that I had done something ethically wrong if I did not leave a tip. The reason is that I allowed the wait-person to perform on the basis of a presupposition that I had no intent to keep, or at any rate did not keep, and this is a form of deception, or promise-breaking. It doesn't matter to this issue whether tipping is a good system because it concerns a general ethical matter regarding tacit understandings. But let's consider a more general proposition: if not tipping were unethical, would it be irrational to tip?

    1. //I would feel that I had done something ethically wrong if I did not leave a tip. The reason is that I allowed the wait-person to perform on the basis of a presupposition that I had no intent to keep, or at any rate did not keep, and this is a form of deception, or promise-breaking.//

      What if, say, I walk into a restaurant wearing a T-Shirt saying "I am not going to leave a tip, so please give me only the minimum needed and no extra niceties." Now of course, minimum needed would involve taking my order, bringing me the food and water, and at the end, a bill (or check). This way, I am not keeping anyone with a presupposition, which BTW is not my fault if anyone has.

      It would be unethical to not tip if it was my responsibility to pay the waiter. But it's the employer's responsibility. Diners just want to spend a nice time with friends and a meal. The way of the market is: consumers pay for the product and/or service the invoice amount. People involved in the transfer of products and services are paid by their respective employers who makes money out of the invoice amount received from consumers.

      Lastly, tipping is/should be optional. To make it mandatory reflects very poorly on the mentality of waiters. It's like, if one time some kind person found a waiter "nice" and decided to help him with finance, the waiter makes it into an ethical obligation that the man should help him every time he waits on the man.

    2. pmpaolini,

      You asked: "If not tipping were unethical, would it be irrational to tip?" No, I think it could definitely be rational to tip in that situation assuming that one's utility was actually maximized by behaving ethically.

    3. Greg,

      Are you suggesting that if behaving ethically does not maximize one's utility then behaving ethically is irrational? I hope not as there's are serious philosophical problems with that view: if ethics is deemed irrational except when it maximizes one's utility, then ethics as a whole is irrational. In my view, any theory of rationality that implies that ethics is irrational must be false. It may be that I, as non-economist, am clueless about the technical aspect regarding how you're using relevant terms, but then economists should keep in mind that the terms have important non-technical meanings.

    4. pmpaolini,

      According to the economic definition of rationality, "yes".

      You wrote "if ethics is deemed irrational except when it maximizes one's utility, then ethics as a whole is irrational." That doesn't necessarily follow though. Ethics can indeed be perfectly rational in that view, so long as acting ethically brings one more utility than acting non-ethically.

    5. Greg,

      You seem to be saying that an ethical action is rational only when it is also the action that maximizes one's utility. This means it would be irrational to take ethics as one's primary normative guide, as ethics doesn't track rationality; that's what I meant in saying that your view of rational renders ethics as a whole irrational; ethics doesn't work as a guide to action if one wants to be rational. The rational person, on your view, always seeks to maximize their own utility, and when they happen to do something ethical it's just a happy accident. You view of rationality makes ethical care irrational, which in my view is a serious problem with the view.

      I agree that rationality concerns self-interest, but I believe genuine rationality is constrained by ethics; that is, the rational choice is the ethical choice that best serves one's interests. Your conception of rationality kicks out ethics and thereby creates a dichotomous relation between rationality and ethics that runs against both ordinary and philosophical conceptions of rationality. We don't ordinarily see a dichotomy between being rational and being ethical, though between being purely self-interested and being ethical, yes. This suggests how your conception of rationality fails to capture the way 'rationality' is generally used.

    6. "the rational choice is the ethical choice that best serves one's interests."
      That makes no more sense than if you were to say the ethical choice is the rational choice that best serves, etc.

  18. Tipping isn't a case of restaurant owners unfairly transferring risk to wait staff. The wait staff influences the overall dining experience, but it's difficult to monitor the quality of interactions between wait staff and customers, therefore the ownership of the income stream derived from customer service has gravitated to the wait staff who most influence it.

    1. A mechanic influences pretty much the whole experience of a person's car repair, but it's difficult to monitor the quality of those interactions too. What's the difference here?

      And why is it difficult? I've often had restaurant managers come over sometime during our meal and ask how everything was going. Also, have a feedback box next to the entrance/exit. If a customer really liked or really disliked anything about their experience, they'll let the owners know through feedback.

    2. Here's one important difference, from the perspective of economic theory, between the mechanic case and the wait staff case:

      In the server case, the customer can directly monitor the wait staff's service and tip accordingly. In the mechanic case, the customer usually can't tell if the mechanic's done a good job—at least not immediately. So, whereas it arguably makes sense to have the customer determine part of the staff's wages in a restaurant, it doesn't in an auto shop.

      There are other differences, too. I would find it frightening if I knew that my car (or the other cars on the road with me) had been repaired by a mechanic who depended on tips. What if the mechanic thought that I (or the person in the car behind me) wouldn't tip well?

  19. There should be sensible laws to ensure that everyone (including food servers) can make a living wage.

    Economic theory assumes a "Du capitalisme sauvage" mentality that we should have outgrown long ago. Not everyone thinks
    that way. That's why people still tip a server they will
    never encounter again -- even when dining alone. It's simply
    the right thing to do, considering that the employer is willing
    to let the server get an inadequate wage.

    1. Oops! I meant to write 'agreed' on a different comment! What I meant to say here was–
      "That's not why people tip well at a restaurant they'll never go again. They tip well because they're constantly evaluating themselves as kind and respectful. Poor tipping will not allow people to take that high road. At least tipping is voluntary. The last thing we need is more laws on wages. If waiters are not getting enough, they can do something else. If too many such waiters start quitting, wages will go up on their own."

  20. The problem with tipping, as I see it, is that it promotes 'differential, possibly discriminatory treatment' by the waiting staff - one who regularly tips more gets preferential treatment as compared to the ones that tip less or tip none.

    1. You're apparently assuming this is what actually happens, but it doesn't. Customers who feel they need to tip for good service rather than not tip for poor service, don't come back.

    2. Why shouldn't that happen? Customers who don't tip well might get cordial and respectful treatment, but nothing special. Those who tip well might get a little extra good treatment. Sounds good to me.

      At least in the U.S., if you cannot afford the cost of a meal plus tip at a restaurant, you probably shouldn't eat there.

    3. But then it's not discriminatory service, is it? In a good restaurant, waiters will do as their employer expects. Bad tippers still get good service. Good tippers get extra good.

    4. Waiters' services are set by the employer to a degree, but they're modulated by the average tip percentage that the waiter gets. Of course, the waiter has his own prejudices and mental calculations for tipping characteristics based on race/gender/age. If the waiter's experience of a certain category of customer is poor, he might expect a poor tip and provide mediocre service. This applies if the customer is unknown to the waiter.

      Bad tippers will not be able to exploit this system for too long. While some bad tippers will get away with good service based on the expectation of a tip, this system will work in the most part.

      This system will fail if the proportion of bad tippers reaches a critical mass. Then the rare good tipper will get bad service. Better hope that doesn't happen.

  21. It makes sense to tip well where you eat regularly. Also, the possibility of a tip encourages waiters to be patient with you. Waiters who typically get good tips are providing some extra pleasure to the customer, sometimes by being helpful (recommending dishes and clearing doubts) and sometimes by being attractive. These things make service better. Sure, each individual customer can stiff the waiter after reaping benefits, but not often.
    I like to use my tips as a way of recording my impression of the service. I have tipped badly (and even declined to tip) when the service is awful. I've also voluntarily tipped as much as 25% when I was impressed by the service.

    In some cases, waiters have the discretion to give the customers freebies (like an extra glass of wine with dinner or a cheesecake for the table). They barter their discretion against the tip. Most customers would respond. I guess they're kind of screwing the restaurant here, but it is rational.

    1. They're not screwing the restaurant, believe me.

  22. good post, added some food for thought (with no service charge!) to a similar post i wrote.
    i'd say a lot of tipping is simply peer pressure, and that everyone would be better off without it - the sooner the better. you can do your bit to speed this reform by not tipping - greg, you kinda chicken out on that one; put your lack of tip where your mouth is and realise you will break a few eggs to make an omlette and you will piss off some waiters and your peers but you should be a leader on this issue if it is what you believe. you may be surprised how many times i've not tipped and my dining companion has asked and been told why - then agreed and said "i wish i had the balls to do that too".

  23. You say that grocery baggers and auto mechanics receive a fair wage or they will go to another job
    "shouldn't the same thing be true about servers in a restaurant?"
    What makes you think it isn't? This is where your logic of greatly flawed. Are severs coerced into serving by gunpoint? Are servers barred from working in grocery stores? The fact is most servers make more than most grocery baggers. But let's centrally plan a way to make sure they don't get paid with tips! As any good economist will tell you, once we let people meddle with market wages and prices from a central plan to change for the better, you will undoubtedly change for the worst.
    To me the TIP's system is perfect. It allows it to be just a little bit easier for the entrepreneur to create new business in a market with razor thin profit margins and extremely difficult success rate. Shared risk pays off for the server. Or they wouldnt do it! They maximize their utility as well (or are servers too stupid to have concerns for their own utility so they need central planners?)

    These are the questions you should be asking. The free market ensures we all maximize out own utility. It's when the "know betters" decide that voluntary exchange is not fair enough even though both parties agree it is, that one side gets shafted and over all economic production is decreased.
    When you make the law "all restaurants must pay waitresses minimum wage" then it is harder to open a restaurant and there are less people making above minimum wage.
    Tips is a way of passing a cost directly to the consumer of the product. You have the option of removing it entirely by going to a self serve restaurant or paying the luxury and enjoying the service. Then someone comes along and says "hey, waitresses are too stupid to maximize their utility, we all need to make sure we help them get a fair wage. Because they are so stupid they don't know the grocery store next door hires baggers"

    1. I agree with the reasoning, although I'd say it's more representative of a well regulated market than a free one

    2. Jim, I think you missed the point, although you have made it very clear that you are a free market ideologue who thinks that service workers are stupid.

      One argument against abolishing the tipping system is that servers wouldn't do their jobs without the possibility of making tips. My point was that other service based professionals do their jobs without the presence of tips. Despite your rant, there is actually nothing flawed logically about pointing out an example in which people do service based jobs without tips.

      Furthermore, it's outrageous to suggest that switching from a tip-based system to one with hourly wages involves central planning. Abolishing tipping would actually allow the market wages to be fairly determined without *irrational* subsidization called "tipping" from the customers.

      Near the end of your comment, you also set up a nice straw man to attack. I never said anything about requiring a minimum wage, only that the servers be paid the true market wage for their service. If the customers all behaved rationally (by not tipping), then I think the servers would find other jobs (or choose not to work) until the wages climbed to a fair market price. If you think this is central planning, then we clearly have a difference of opinion on what the term actually means.

    3. The logical flaw is that you say for some reason that a waitress doesnt have the same option of moving to another job based on their wage. Does the waitress not know how much he/she makes? Yes it may vary, but is she without the ability to decide if this arraingement has higher utility gained over other positions. You differentiate the waiter from the mechanic in this regard why? What exactly is your point? You stated that "should the waitress be able to do the same?". I am asking you, why can she not? What prevents the waitress from evaluating her wage vs some other market she is free to join? Because it varies is not an answer? She has the most knowledge as to the measure of utility gained by this position vs any other position. Far more knowledge than you or I could have (even if we were waiters in our past or present, as each position is different) Utility has many factors. Enjoyment of work, wage, location, all sorts of factors. Why exactly must you seek to change this arraingement? Because you know better how to improve the waiters utility? Even though they chose this position as the highest utility over any other position available, you need to change this voluntary arraingement?
      You say it's absurd to say this would be central planning. Unless you plan to have some grass roots organization to make this change through voluntary action, then it can only be changed through central planning. All law, regulation from the state is central planning. Perhaps you do mean doing this through grass roots voluntary organizing and not through some regulation. If that's the case, I stand corrected. If your talking about anything else, it's central planning. It doesn't matter if you think this makes it easier for people to decide on market wages to remove tipping, it's still central planning. When the few plan for the many, it's central planning. When regulation changes the free market, it's central planning, even if you think that your plan is more free market than the free market. It's still central planning. If the Tip system is there, than it is what consumers prefer. It doesn't matter if you think is wrong, the masses don't.
      Perhaps you missed that me calling servers stupid was sarcasm in reference to your position. My point is exactly the opposite. Only they have the knowledge to decide if the utility gained is higher than other positions available to them. They made their choice, they picked the position that gains them more utility than any other position available to them, and you seek to change that voluntary position (I assumed through some regulation, but perhaps I am wrong.

    4. Yes I am a free market ideolog. I prefer to say I am a student of the Austrian school.

      " if customers behaved rationally by not tipping"

      You show your lack of understand of economics. Customers are tipping as a voluntary exchange for service. The fact this social contract is upheld regardless of the fact any of us has the option not to uphold it is a testament to the market and peoples regard for uncohersed contract fulfillment. And if people felt the server didn't fullfill their obligation they have the option of voluntarily adjusting that contract. The consumer prefers this system of having that ability during their dining, or it wouldn't be there. Entrepreneurs have tried the "no tipping" servers policy and it didn't catch on. That means people gain utility from this process, it doesn't matter if you think it's irrational, the consumer gains some form of utility from it or it wouldnt prevail. Of its irrational doesn't matter. Utility can not be measured but by the consumer alone.

      All free market exchanges gain both sides utility. If it did not then the exchange will not happen. Both parties gain from the TIP exchange or it would never take place. If the waitress gained higher utility elsewhere, that's where and in some other more stable form of exchange "fixed wage" then that's where she would be

    5. Actually tipping is a lot like receiving a commission for sales, and a bit like independent contracting. There's no rational case to be made for abolishment of any of these employment practices in toto, or is there?

    6. Sorry for the couple jumbled phrases, apparently I gain some utility from carrying on I Phone conversations in my car and it's a bit irrational i confess

    7. Paraphrasing Ludwig Von Mises

      There is no irrational an rational in economics, only preferences and personal value scale increase utility.

    8. Jim Fischer
      >> Entrepreneurs have tried the "no tipping" servers policy and it didn't catch on. That means people gain utility from this process <<

      Maybe it didn't catch on in the US - service works just fine without tipping (or a regulated minimum wage) in other parts of the world. After a lot of dinings in various countries I feel safe saying the US tipping system on the average has absolutely no advantage in quality. (Some Asian countries are distinctly better than the US, actually.)

      Personally, tipping in the US feels generally more like giving for charity than for service, because I have been told servers have a hard time living on their pure wages otherwise. So the utility I gain from the process is the same one as I gain from giving to charity.

      When I dine elsewhere, otoh, tipping really is for good service.

    9. Roy,

      Actually, I think that's a bad analogy. Receiving tips is not like receiving commissions for sales because commissions have to be paid legally. A salesperson, at least usually, has an explicit and legally binding contract which specifies how the commission structure works. If they sell 100 units of a product and make, say, a 20% commission on all sales they know exactly (and legally) what to expect come pay day.

      A server, on the other hand, is not afforded that luxury. They may expect to receive a 20% tip from their customers, but the customers have no legal obligation to tip them to tip them 20% (or at all).

    10. Jim,

      Again, I think you missed the point and are misrepresenting what I am saying. I never said, "a waitress doesn't have the same option of moving to another job based on their wage." He/She certainly does, but that's irrelevant to the issue at hand, which is whether or not the tipping system is better or worse than a pure wage based system.

      You wrote: "If the Tip system is there, than it is what consumers prefer." How do you know that? I suppose it's an empirical question that we could find the answer to, but I'm skeptical of your rush to judgement on what people want. Just because something has always been that way doesn't mean that people prefer it.

      Your idea of utility is nothing but a tautology and it doesn't provide any useful information about the world.

      1) Why did that person leave tip? 2) Because it maximized their utility. 3) How do you know it maximized their utility? 4) Because they left a tip.

      Do you see the problem with the sort of economic reasoning you use?

      Also, you equivocate when it comes to the discussion of "central planning". Using your definition, are you really suggesting that all "central planning" is bad? When I say that abolishing the tipping system wouldn't involve central planning, I mean that no central planner would be setting the wage for the servers (only the market).

    11. Hey, I only said tipping was a bit like commissions, not an exact analogy. The point being there are lots of ways people get paid for services other than by salaries.

    12. Roy,

      I agree with your last point. I was simply pointing out what I find to be a crucial difference between the commissions and tips.

  24. This comment has been removed by the author.

  25. It seems to me that a typical conservative response is present in some responses to this thread. Particularly: if something exists in a certain shape or form, then that's the best way for it to exist, and any changes will undoubtly worsen the situation. Or more simply put, "if it ain't broken, don't fix it."

    This is simply absurd, since it claims that the idea of improving anything is nonsensical, which would in turn suggest a black and white world, where there are only two states for everything, broken or fixed.

    The current system of compensating waiters for their service isn't broken, otherwise it wouldn't function at all. But it hasn't been demonstrated by anyone in this discussion that it can't be improved by removing tipping from it.

    1. Your liberal response is worse than the conservative ones in this case. Try pragmatic.

    2. How is my response worse? My only point is that there are more states than "broken" and "best-possible". I'm not even sure how you found anything liberal in my response. It's nothing but simple logic.

    3. By the way, if you were looking for the antonym of "conservative", it's "progressive", not "liberal".

    4. No, progressives have more common sense than liberals. and I was looking to describe those who fix things by first breaking them.

    5. > progressives have more common sense than liberals

      I won't ask you how you came up with that or for the source of your definitions of "liberalism" and progressivism". But speaking abstractly, since progressives are for progress and liberals are for liberties, it would make sense that when providing liberties is unreasonable, liberals would stick to their guns and progressives would win the "common sense" battle. Of course, this is highly hypothetical and unrelated to our reality.

      Let's get back to our topic at hand though. How is my response worse than anything? Do you disagree that something could be functional and yet have room for improvement?

    6. Tes, if that's now the question.

    7. Source of my definition, Apple dictionary, Version 2.1.3 (80.4)
      liberal |ˈlib(ə)rəl|
      1 open to new behavior or opinions and willing to discard traditional values

    8. And so we have:
      Liberal: favorable to progress or reform, as in political or religious affairs.
      Progressive: favoring or advocating progress, change, improvement, or reform, as opposed to wishing to maintain things as they are, especially in political matters.

      Seem the same to me. But your progressives have more common sense than your liberals. Alright... :)

      What is "Tes"? And are you going to elaborate on my response being "worse"?

    9. Tes is a purposefully made typo.

    10. This feels like pulling out teeth...

      And what would "Tes" be without the typo?

  26. Greg,
    On one hand you say a waitress can assess her wage and decide whether to move on to another position, but on the other hand you say this is irrelvant to whether or not a wage based system is better than a TIP system.
    This is your contradiction! If she can decide if the TIP system is better for her than a wage system, then its obviously not irrelvant as to which one is better!!!!
    So you must be saying one of 2 things:

    1.The wage system is better than the TIP system, its just she is too dumb to know what good for her (because she doesnt know how to apply at the local Macdonalds?) So thus you know better than the waitress as to how to better her situation.
    2. You making some regulation or whatever it is you would do, would actually improve her current wage (which is absurd because you cant just increase the cost of something without impacting this business, and you already confessed that you dont want to control the wage).

    See, your saying the wage system is better than a TIP system because an employee can more accurately gauge their wage then confess that she can decide which brings more utility for her. She made the decision! She told you which is better! That what the science of economics is, listening to what the actors are telling you! What drives me crazy about these types of interventions into the free market, they are always done with good intention, but it completely ignores that THIS WAS HER BEST CHOICE!
    The TIP system is better than the wage system for her and she has told you by taking the job and keeping it. She has the option to work at a wage job, she has shown you which system is better for her. Others may want the wage job, for them that system is better.
    This is somewhat similiar to the child labour law argument. No matter what good you think you are doing, you are removing the best choice. If you look at a family unit as a whole (and do it with the assumption that the parents are not evil child haters) and the 12 year old is working, so then your outraged and make a law, "No working until 16 or 18", guess what, you have just removed that familys best option and now they will revert to their second best option.
    Countries that have done this without a healthy economy have seen rises in child prostitution. Only Capitalism and free markets can remove the need for child labour. The fallacy that the government removed child labour in America is just that, A fallacy. Capitalism removed the need for child labour (and thus gave the family a better "first choice") and shortly after the government passed laws.

  27. The concept of utility is not some circular argument. You seem to scoff at it in your post. I am not going to get into explaining utility, but I suggest you do a little research on it. This is a widely accepted term in the science of economics. It can tell us much about the world as to why human action is conducted as it is.
    In economics, all volunatry Human action (not breathing or blinking, but purposful action) is an aim to decrease or remove some uneasyness.

    You keep saying you would abolish Tipping without central planning. How? Again Greg, all regulation etc... IS CENTRAL PLANNING! Central planning doesnt just mean you must fix the wage! any law or regulation that would prevent tipping is central planning! so please stop saying you could do this somehow without central planning.

    So again, unless your gonna do this grass roots and without using the threat of force and/or imprisonment to enforce it, then it is central planning!

    All government action is enforced by the threat of force and/or imprisonment. So please explain to me, how you abolish tipping without the threat of force and/or imprisonment.

    And when I say this, I need you to think it through. You must pretend that the waitress and retaurant will keep the tipping system and your going to remove it. You likely go down the road most do and start with fines etc...but think it through. Say the waitress and restaurant will not change to your will not matter what, they will not pay a fine, they will not compromise, they want the tipping system no matter what and are going to take a stand for it. What will you do without any force,violence and/or imprisonment that is supposedly NOT central planning?

    For the record, yes, all central planning is bad. I am a pure Libertarian (or you could call an anarco-capitalist). You are giving a perfect example as to why. If you want to get into discussing this point in itself, please e mail me jfisher@shire.com
    This wil take over a discussion board in itself so better to stay to the tipping point here.

    1. Jim, tipping in its current form could easily be converted to the way the rest of the market operates by raising the current minimum wage for tipped employees from $2.13 to the standard minimum wage of $7.25. This would ensure that everyone gets paid at least the minimum wage, and if you feel that your server really performed outstandingly, you could tip him/her, knowing that you're giving the server an extra bonus, not paying their salary.

  28. Val,
    You have obviously missed the point. If the minimum wage is 7.25 (meaning you will get that no matter where you choose to work)and the waitress chooses her position over every single minimum wage job available, then obviously she is choosing the waitress job for a reason. IT IS BETTER FOR HER THAN THE OTHER JOBS!

    So if we look at economics as a science and not through the Liberal do gooder blinders, we listen to what her action is telling us. it is telling us that her position brings her greater utility than the minimum wage jobs! So if minimum wage is the supposed "minimum that people should earn", and she gets greater utility than the minimum wage, why the hell are we seeking to increase her salary?

    Again Val, either you are saying her job is not as good as a minimum wage job (and thus she is just too stupid to realize that she can gain more utility elsewhere), or you are saying that we need to increase her salary regardless of how it compares to her other choices.

    So my question to you Val is, why is this needed? Why must we insure we turn her better than minimum wage job, into a minimum wage job?
    What ultimately are the consiquences of this new regulation you would put in? its impossible to tell. My guess is that likely it would just turn her position to a minimum wage job once everyone knows she is not making $2.13 anymore. If people still felt compelled to tip and it actually raised the cost of the meal, then the actual amount of business would likely decrease. Resteraunt demand is an extreemely elastic demand curve (as is its supply). industries with elastic supply and demand are easily impacted. Regulation always has negative impact over the free market for overall utility. You may be able to increase ones utility but always at the expense of anothers and the total will be less. (I am sure someone will ask me to explain this and/or prove it so please see above e mail if you want it detailed)

    1. Jim,

      I was responding to this:
      Say the waitress and restaurant will not change to your will not matter what, they will not pay a fine, they will not compromise, they want the tipping system no matter what and are going to take a stand for it.

      I find it difficult respond to your comments in whole because they are very much all around the place with ideas. I don't want to write any books here.

      So the only point I was making was that it's possible to modify the tipping system without any laws that ban tipping.

      When you're ready to agree with me on this point, we can move on to discussing intelligence levels of the wait staff, consequences of raising their minimum wage, et cetera.

    2. Well, you didn't really respond to the idea that the restaurant and waitress are taking a stand and keeping the tipping system. Which includes paying $2.13. Yes the waitress may not put up a fuss if she thinks she is getting 7.25 plus tips, But the restaurant owner would, for it is he that looses.

      Now he must fork out additional cash. So you are by force, making the restaurant owner pay more money.

    3. That's correct, I didn't respond to it. I've noticed that in discussions such as this one it's difficult to come to any sort of consensus when people refuse to acknowledge responses to their claims. Person A makes a claim, person B responds to the claim, but person A, instead of accepting or refuting person B's response goes on to make other claims. This is anti-productive, since people simply end up talking past each other.

      Thus, I would first like you to respond to my point that "it's possible to modify the tipping system without any laws that [expressly] ban tipping."

      Once you do that, we'll be able to philosophise about the role of force in society, and talk about restaurant owners unhappy with having to pay salaries, instead of pushing that responsibility onto restaurant customers.

    4. What Really needs to be answered is "why is the intervention necessary"?

      It's not really possible to do this without making a law as you say. Because right now the law for minimum wage does not extend to resteraunts. So you would have to make the law (not existing) to include resteraunts. This point is regardless. My point was that it can't be done without central planning. Which means law, regulation, whatever you want to call it Val, your idea still needs to be enforced by threat of violence and/ or imprisonment.

    5. 1) I didn't say that it's possible to do anything without laws.

      2) What I said is that "it's possible to modify the tipping system without any laws that [expressly] ban tipping." A law that raises the minimum wage does not ban tipping.

      And again, we'll talk about the "threat[s] of violence and/ or imprisonment" after you respond to what I'm saying, and not to something else. I don't mind discussing with you any and every point you want to make, but you need to stop trying to ignore any points you don't like.

  29. One other point, I noticed Greg was careful not to want to fix the wage of the waitress job, which tells me he understands the damage that minimum wage laws do to the economy. this is an obvious and agreed on point even by very different schools of economic thought, from the Austrians like myself to the Neo-classical to the Keynsians all agree that minimum wage has a negative impact on the economy. If you understand why this is and agree, you are clever enough on economics to follow my reasoning here and dont have much to stand on.

    1. "Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects." (source: http://en.wikipedia.org/wiki/Minimum_wage#Surveys_of_economists)

  30. Val,
    I will hopefully fulfill your request. Yes I agree. You can remove tipping without making a law banning tipping. This is truly an absurd point. You can also prevent driving between 55mph and 72mph by making a law that prohibits the manufacturing of cars.

    I have no idea why this is a sticking point for you? All kinds of law and regulation aim to accomplish things indirectly. If you made a minimum wage law apply to restaurants, it would obviously have the purpose of eliminating tipping. It doesn't make any difference that you didn't explicitly word the law that way.

    1. It's a sticking point for me because of your original argument:
      You must pretend that the waitress and retaurant will keep the tipping system and your going to remove it. You likely go down the road most do and start with fines etc...but think it through. Say the waitress and restaurant will not change to your will not matter what, they will not pay a fine, they will not compromise, they want the tipping system no matter what and are going to take a stand for it. What will you do without any force,violence and/or imprisonment ...

      Expressly banning tipping would be incredibly stupid. There is nothing inherently wrong with tipping (not the system we have in place now), and making a law that bans tipping would be antagonizing and create unnecessary conflicts.

      If we raise the minimum wage of waiters, though, you'll pay just a bit more for your meal, AND you'll be able to leave tips on top of that for outstanding service.

      We haven't yet determined whether or not this would improve the current system, but we do know that we can do it without any threats of violence, fines, etc.

  31. Val,
    The comment you quoted was in refence to Greg's claim he could accomplish this without central planning.

    and you are dead wrong that your law (although it doesnt explicitly ban tipping) is enforced without the threat of force and/or imprisonment. Becuase you are still making a law or regulation that raises the minimum wage for restaurants. What happens to the restaurant owner that refuses to raise his wage from $2.13 to $7.25?
    You act as though this is some nutruel law that doesnt impact or add cost to anyone. It obviously hurts the owner! If he decides to take a stand and continue paying his waitress the same as he always did, guess what?
    ALL REGULATION, LAW, GOVERNMENT ACTIONS, whatever you want to call it, are enforced by threat of violence and/or imprisonment.

    1. Alright, so now we can get to the point you enjoy bringing up so much, the "threat of violence and/or imprisonment."

      Just so I understand your position clearly, are you an anarchist? Do you think that any law is a bad law?

    2. Most regulations of this sort are enforced by assessing fines for non-compliance. There are no debtors prisons here for non-payment of such as civil fines.

    3. Roy,

      All Regulation is enforced by threat of force or imprisonment.

      Follow your argument though to conclusion. If the government outlaws Gay marriage (lets say it was legal everywhere to begin with), but does this through regulation and says there is a $10,000.00 fine for any gays that marry. If the homosexual refuses to pay the fine what happens?

      You say there are no debtors prisons?

      So what then? All regulation is enforced by fine and if we refuse to pay, nothing happens?

      You eventually will have forced imposed on you. You will be stripped of any and all property until the fine is met, or you will find yourself in prison.

      Are you telling me people just willingly comply with regulations they dont want? there is really no worry of force or imprisonment if the homosexual refuses to pay $10,000.00???

      Take a step back and look at it, every day millions of people do things they do not want to, pay taxes, renew their license, etc etc, remove all guns and threat of violence/imprisonment from the state. Would any of us do these things?

      If you refuse to pay the fines Roy, force/imprisonment will be imposed on you. Even a speeding ticket is imposed this way. Dont pay one and see what happens. And follow it through all the way to the end. No matter what, you will not pay the speeding ticket. Then see how traffic laws are truly enforced.

      By your logic enforcement or compliance happens because of a tax (or a fine as you say). But why would any of us pay the fine????

    4. Your inferences that followed from your tacit admission that your blanket assertion about threat of VIOLENCE or IMPRISONMENT was wrong are just so much additional baloney. In civil courts, as I noted,the unpaid fines are eventually collectible as judgement debts.
      The is no VIOLENCE and no IMPRISONMENT as a consequence for non payment.
      The rest of what you have to say is based on similar deceit and lack of logic. Not worth responding to.

  32. Val,
    I am an Anarco-Capitalist or Pure Libertarian, but that isnt the reason I keep mentioning it and dont want to get into that exact point here. the point I want to get across is that even when were talking about an economic subject as seemingly beneign as tipping, to change from what free people are doing in the market place, does mean does mean force and always has a negative impact on total utility.
    Although I am not a utilitarian, from my stance as an individualist, its about rights. What right does Greg have to interfere with what consensual parties are doing in the market place? why? Becuase he deems it irrational? I want him and all to understand, any change from what free people do is indeed central planning and can only happen with the backing of force. He continually denies this, but it is absolutly the truth. If government had no force, no police, army etc... no regulation would be possible. You could write and re-write all the great ideas you have for tipping or the elimination of it, and it would all be meaningless. So when someone thinks they want to start tinkering with the free market, they can only do so by these means. I am not looking to get into my personal philosophy. I just want this point conceded since it was denied multiple times. Its important for people to understand what they are really doing when they come up with these silly idea like ridding us of tipping. Greg feels that what others are doing freely in the market place is not rational enough for him and feels the need to use force and the threat of imprisonment to change it (not really because he doesnt understand the truth of what he proposes, he doesnt understand why people actually do what the government tells them, this is what I want understood). Its important to understand what central planning is and that is all a government is capable of doing. As the famous Russian economist Yuri Malstov says "All government is socialism,... more government, more socialism,... less government, less socialism.

    If you do want to discuss the matter of force and violence further, I am happy to, just e mail me at above address

  33. "In civil courts, as I noted,the unpaid fines are eventually collectible as judgement debts"

    Again Roy, you refuse to follow your own logic all the way to conclusion. what happens if the person refuses to pay any debts owed? By your logic, it ends there! Nothing happens, everthing is wonderful. No force needed.

    If you and I live on an island and I tell you that you must do this or must do that, and as a consiquence for not doing what I say you must pay me fines, then guess what? Either I have the force to make you comply, or you tell me to take a hike. Why would you pay me a fine or do what I say over what you want to do?????

    I challenge you to explain how government regulation is different?

    You need to follow your own logic to conclusion, meaning what happens in a case of complete refusal to comply or pay the fines????

    For some reason you get to end your follow through with a "judgement debt" and then the story ends. well guess what? either the debt MUST be paid or something happens. OTHERWISE, WHO WOULD PAY?????

    "The rest of what you have to say is based on similar deceit and lack of logic. Not worth responding to."

    Where is the deceit? You think people arbitrarily do something other than what they choose and there is no reason as to why?

    if a civil court judges against you with a debt, do you get to tell them to piss off?

    Follow your own logic to conclusion before you criticize mine!

    1. You deceitfully changed "violence" to :"force" when you knew you were wrong. Which changes the entire argument since in one way or another everything we do is by use of some form of persuasive force.
      And yes, if you want to ruin your credit you can tell your creditors to piss off. No violence or jail, unless your creditor decides to punish you, and then goes to jail for his satisfaction. No-one will trust you in the future but you can live free or die with the rest of the nuts, including your libertarian idiots.

    2. Roy,
      I am using force to mean threat of violence and / or imprisonment.

      And no, not everything we do is by force. The whole idea of freedom means you live without force from others. It is an absolute absurd statement to say all human action is based from some type of force. Everything that happens in a free market is 100 percent voluntary.

      Somehow I let you slip in the term "civil" court and took the bait. This has nothing to do with civil court. We are talking about government regulation which is not enforced by "civil" court.

      And no, youre completely wrong, it's not just a matter of ruining your credit. Government regulations are not enforced by civil courts and putting a stain on your credit. That's absurd! Don't pay a speeding ticket and hope you end up with just a stain on your credit report and see what happens!

      Free markets work the way your saying not government regulation.

      Is the truth getting under your skin? Is that why I'm now an idiot.

      Sounds like you still need to explain how regulation makes people do what they don't want to without any use of force (and yes that means threat of violence and/or imprisonment, don't deceive yourself again!)

      You still need to think your logic through!

      What happens when government imposes a fine for breaking regulation and you refuse to pay? Tell me how there doesn't need to be any force yet people still do what they don't want to?

  34. its amazing to me that you think any government can have power over its people without force?

    All power is backed by force. All government has power over its people by force (threat of violence and /or imprisonment).

    there is no such thing as a government in power that does not have this. that is the very substance of government. If any government were to disarm itself completely, it would immeadiatly cease to have any power over its people.

    1. Again, what you originally claimed was "violence" and jail. Homeless people owe money up the gazoo, yet on spite of dopes that believe in no regulated markets, no safety nets, and would like all debtors whipped and jailed, they continue live free and die.
      Homeless can't even find a home in jail unless they commit a crime. Civil liabilities, however, are not crimes. You'd certainly like them to be to keep you free, not realizing that all freedom comes with the responsibility to cooperate with your fellow men to maintain it.
      It's a waste of time to argue with a zealot, and a liar to boot. But if you want to trade insults, have at it.

    2. "Somehow I let you slip in the term "civil" court and took the bait." Another lie. No such trickery was involved. You're the trickster. It's the only way you zealots can defeat honest logic. Switching the original premises to suit your persuasive purposes is your best tactic. Fallacious practice, nevertheless.
      Nobody's biting.

  35. What the heck are you talking about?

    I am an advocate for the free market in place of government

    You are mixing them up

    I say all government regulation is imposed by force.

    You say no most is posed by fines

    I am saying those fines are imposed by force

    Markets are 100 voluntary and use no force
    Government only imposes by force, even it's fines.

    I don't know what the heck your saying with your homeless guy, does he owe to the market? Government?

    You were trying to tell me the government can Impose its regulation without force and refused to think it through

    1. I think I get it. Your moving from the "government can only have regulation with backing of force" debate and arguing with a straw man about safety nets, because you know I am a libertarian and realize I am right about the force so want to move on to other libertarian beliefs

    2. I'm not trying to tell you anything, Government regulation in a properly operated democracy (with no Ron Pauls in charge that is) s a cooperative endeavor. There are no markets that operate successfully and never have been without all parties trusting that the others will cooperate in making the markets work.
      But it's useless to argue with those that can't grasp that simplest of an abstract concept.

    3. Roy,

      Let's stick to the original point you made. Let's assume force sake of argument it's ok to use force interchangably with threat of violence and/ or imprisonment and I am not the slick trickster you say I am.

      How is government regulation imposed?

      You say no force, it's only fines, just hurts your credit.

      I say no, those fines are imposed by force.

      Who is right?

      What happens if the government fines you for breaking a regulation and you refuse to pay the fine?

      They just put a mark on your credit and all is good? No force?

      Is that true?

    4. "realize I am right about the force so want to move on to other libertarian beliefs"
      Another obvious lie. Your credibility here has reached, if possible, a new low.

    5. If you can't handle the fact that you forgot there were civil regulations as well as criminal, I don't care.

    6. But perhaps in your libertarian logic you see all force as violent. Pity.

  36. Civil regulations??

    Are you going to try and tell me we were discussing civil regulations?

    It was not perfectly clear I was talking about government regulation as were you when I said "government regulation" 10,000 times?

    You have a nice evening Roy

    1. Most government regulations are civil. I should know, I was a Federal investigator for over 20 years. Worked later in three government regulated industries.
      No violators of civil rules and statutes were ever threatened with VIOLENCE or prison.
      (Also worked as Police Commission investigator, and even those violators were seldom threatened with violence or jail time.)
      And I know a liar when I see one and you're a poor one.

  37. "most government regulations are Civil'

    what the heck are you talking about.

    Please entertain me Roy, please tell me one government regulation that happens to be a civil regulation? this I really need to hear?

    1. http://en.wikipedia.org/wiki/Civil_code

  38. Roy,

    You have called me a liar several times and go on to say "most government regulations are civil"

    I ask for just one example of a government regulation that is a "civil regulation"

    Rather than give me just one example (because there isn't any) you post a Wiki link for "civil code"

    If you would bother to read your own link, you would see that civil law applies to "private" parties. Civil law is that which is intended to set guidelines to resolve disputes between private parties.

    This is not the same as "Government regulations"

    If you indeed worked in 3 government regulated industries (as I currently do) then you know these government regulations have nothing to do with civil law or civil court.

    But please, despite this truth that for some reason either you don't understand or are Intentionally twisting, call me a liar again.

    Please point out my lie? As I have just pointed out yours (either an Intentional lie or you just dont understand , which it is I really don't care)

    Again Roy, please give me an example of a government regulation that is a civil regulation? You wont because there isn't any.

    You say you worked in 3 government regulated Industries. Just point out one rule from any of those 3 jobs that is a civil regulation. Should be pretty easy?

  39. Here is a decent definition of government regulation from the free dictionary.


    You are impossible to conversate with, because for one you dont understand my point "that all government regulation has the backing of force (meaning threat of violence and/or imprisonment), and two, you dont even understand your own point because you have mixed up all definitions of commonly used terms. And to top it off constantly insult my integrity by calling me a liar.

    when someone constantly insults the person they are debating with on a personal level, it is usually because the weight of their argument doesnt speak for itself so they search for something else.

    as you say I am loosing credibility or embarrasing myself. if this were in the actual argument, then you dont need to say it. but because it is not in the substance of your argument, you feel the need to say it. If I am lying, point out the lie and tell me the truth. So far you have failed misirably at this. Your wiki link proves my point, not yours. It does not say that government regulation is civil regulation yet for some reason you feel it holds weight for your argument. It doesnt. Or perhpas you hoped no one would read it? I am not sure what you were thinking.

    And with your homeless man example. I have no idea what your point is???? I am not sure you do.

    the fact is, to remove tipping from the current free market system, some form of government law or regulation would need to be used (Not frigging Civil!, civil law has nothing to do with it!) and that law / regulation would have the backing of force (meaning the backing of the threat of violence and/or imprisonment). The reason the author of this piece didnt debate this, is becuase its true, the reason Val didnt go further, is becuase he saw the point and it is valid. for some reason you think government can make people go against their own will with no power of force (meaning no threat of violence and/or imprisonment). why Roy? Why would people listen to the government against their own will?

    Its the same reason we pay taxes we dont want to pay. same reason we renew a license we dont want to. The same reason someone doesnt open a store in their house if they dont have proper zoning and on and on.

    1. Even in your cited definition of government regulation there is no mention of "threat of violence and/or imprisonment."
      And you've tried to unlie a lie there as well. It can't be done.

  40. The point of my posting the definition was to show you that government regulation is not civil regulation which for some reason had to be a point of debate with you?

    The fact it is backed by force is just obvious. All you need to do is think it through Roy, which you have refused to do. What happens if someone takes a stand against a government regulation. Choose any government regulation Roy. Lets say the regulation is that you must paint your house red (it doesnt matter how trivial the regulation is). You decide to take stand Roy. You will not comply with this regulation becuase you feel its your house and you should be able to paint it any color you want. Your refuse to comply. And by refuse, that means in its entirety. You will not pay a fine, you will not comply with the regulation in any form whatsoever.

    What will happen Roy? According to you, it will just end up being a stain on your credit.

    what I am arguing is that you must comply or force will be used against you.

    So please, instead of bickering about civil regulation which has nothing to do with what we are talking about. Just do the thought experiment. Pick any government regulation and think it through, what happens when you take a stand and refuse to comply?

    Most dont argue this point with me, because the answer is obvious. Its just obvious, if there was no backing of force, then regulation would be impossible. people wouldhave no reason to go against their own will. and if it was their own will, then there would be no reason for the regulation in the first place.

    Your one of the first that has even argued this point with me. Even the most Liberal or conservative people understand this is a fact of statism. I am not sure why you refuse to see it.

    1. "what I am arguing is that you must comply or force will be used against you." And here I had thought you were saying it was violence and imprisonment.

  41. Ive tried to unlie a lie?

    You dont even make a rational case for your aguement and for some reason keep calling me a liar, yet fail continuously to point out what I am lying about

    1. To suit whatever rationalization supports your present argument, you change violence to force and back again. All of these shenanigans are forms of lying.

  42. Roy,
    Each and every time I used the term force, I used it to mean threat of violence and or imprisonment.
    I am sorry if you thought I meant force as in F=MA kind of force, or perhaps you though I was talking about the Star Wars force.

    what I meant with the term force is obvious, but for some reason you keep trying to make a point that I am lying becuase I was not always using the term force in the same way. Please point out where I used it to mean something different?

    You wont bother to answer this exact point as you havent bothered to answer anything. You are not interested in debating the point I am making becuase you made some foolish point about civil regulations that made no sense and have been soundly mistaken that somehow government regulation does not need force and is really civil regulation.

    Roy, time to call it quits (at least I am). If you want to actually acknowledge the real substance of the argument, then I am happy to discuss if tipping can be removed by government without force (yes Roy,....that means threat of imprisonment or violence)

    1. If force always meant threat of imprisonment or violence when you used it, then as I said initially, there are no such threats involved in most civil regulations. There are certain federal regulations that have criminal penalties, but the usual state codes don't add criminal penalties to civil matters. That's how successful con-men get away with fraud, they know where the line is and essentially use running up an unpaid debt as a way to steal.
      I used to investigate those matters with an eye toward establishing there was criminal fraud involved instead of civil. But you'll never admit that you were wrong here, so this lesson will no doubt fall on deaf ears.

  43. Roy,
    We are not even remotely talking about civil regulations! We are talking about removing the tipping system. Which cannot be done with a civil regulation. We are talking about government regulation.
    I find it comical that you state you were hired by the state to Investigate these matters. What happens when you catch someone performing this fraud? Did you give the criminal a stain on their credit? So even your presence in the civil matter is about force.
    Regardless, the point is, you cannot remove tipping without the force of the state (yes Roy, once again, meaning threat of violence or imprisonment). Otherwise it would not work. All federal and state regulation is enforced in the same manner. Why your insistent to try and change the debate toward civil matters, I don't know? We are discussing removing tipping. It is impossible to do without threat of force (same damn meaning as usual Roy) if it can, you have failed miserably to explain how!

  44. What have criminal regulations got to do with tipping or tipping's got to do with fraud? In any case your arguments have boiled down to a grasping of delusional straws.
    Civil regulations have to do with civil fraud, not criminal fraud. Civil fraud alone is not punishable by violence and/or imprisonment. An employee, for example, can get fined or fired. If he doesn't pay the fine, his assets can be attached, etc., etc., etc. Again, no debtors prisons, etc., etc.
    I don't expect that you'll even try to understand this, as you're clearly blinded by some cockamamie ideology, and the thought of losing the argument here seems to unhinge you. So I'm answering for the sake of the audience, not for you.

  45. Thank you so much for this post.

    I don't agree with the 20% increase in dish prices. It would be interesting to figure out why is this tip even calculated in percentage.

    It makes absolutely no sense, no matter how hard I try to make sense out of it....

    So say for example that i'm working as a waiter in a restaurant. The restaurant has a fancy version of mac and cheese at say $20. It also has a lobster dish at $200. Wine ranges from $30 - $300 at this restaurant.

    I work a night shift, and serve lets say 10 tables two people each. This one particular night, all my guests were college students, and they all ordered the cheapest meals, and the cheapest bottle of wine. Say the bill ends up being $100 a table.

    Thats a grand of food and beverage i served that night. I get 25% *because 15% is like completely offensive, i mean i need to remember a couple of dishes, a type of wine).

    So i make $250 that night and i'm super happy. People tipped me 25% on average, and thats a good tip right?

    But say that the patrons were a bit on the cheap side, everyone tipped the minimum 15%. So i made $100 and im kinda bummed out.

    Now say that everyone orders two lobster dishes, sides appetizers and an expensive bottle of wine.

    I end up serving $8000 worth of food and beverage.

    Now these are people that can afford meal like that and can afford to tip correctly. Plus i've done a good job so i get 25% in tips.

    I've made $2000 that night and im happy. Not because I made so much money, but because i made 25% of what i served.

    Ahhh... but say that there was an anomaly. All of the patrons that night, saved their entire lives and wanted to treat themselves to a nice dinner at my restaurant and can't really afford to tip that much, but want to try a lobster for once in their lives.

    They still tip, but say they are not familiar with the customs on top of everything, and tip according to how many trips i made to the table.

    Say they each leave a miserably 5% tip.

    I'm like "WTF? 5% that's an insult!"

    But then i count my money, and realize that i have $400 in my pocket.

    Then i go

    "WTF? This was a lousy night, people tipped 5% on average, but i still made almost double the money than last night when i made a killing on tips, i mean 25%!?"

    Can someone explain this paradox to me?

    I would really appreciate it.

    I am an immigrant myself and have a hard time understanding this phenomenon.

    I think i've heard before that people complain how you don't get benefits. But this seems like profit sharing to me.

    A good chef creates great dishes, the owner paid an interior designer to design everything. Invested a ton of capital to lease the location, furnish it equip it etc.

    A waiter just drops in, comes and goes, MAKES NO INVESTMENT (no risk?) and every single one gets to share the success of the restaurant. Isn't this profit sharing model considered a huge benefit in other jobs?

    I would calculate how many trips on average my waiters have to make at my restaurant. That would be a parameter indicating how hard my waiters work. Then i would consider how long it takes to turn a table, and that would indicate some sort of capacity.

    Combining those two, i could come up with an hourly rate that i would divide evenly and add to every dish.

    The way i look at things, a waiter is just carrying a plate or a glass and has to attach a name to it i.e. "expensive lobster dish" "cheap mac n cheese". But not even that maybe, he lists it all, turns it into numbers, those numbers get submitted to the kitchen, they come out as plates with stuff on it and glasses with liquid in it, and he brings it back to the appropriate table. Same amount of work, regardless of whats on the plate.

    But then again i'm foreign, and an architect (a poor one at that) i consider myself a rational being, and thats why i probably dont understand this.

    Please please please shoot an argument at citizens.arrest@gmail.com