A largely unremarked upon, but rather remarkable, development in American life is that Americans are now spending as much or more money on food outside the home than they are in the home.
The average American meal is being prepared by someone other than the person eating it.
This fact creates an economic relationship between consumer and preparer/server wherein the former must pay some reciprocal attention to the well-being of those who prepare and serve. This attention is typically reflected by prices, which will determine remuneration for the workers.
In a “systems approach” such attentiveness might express itself in demands for increases in the minimum wage, without thinking about the small profit margins of most restaurants and the fact that consumers seem especially reactive to increased food prices. Most economists understand the disruptive effects of mandatory wage increases.
A non-coercive, more individualized approach emphasizes tipping as a mode of both raising the worker to a living wage and expressing gratitude.
In many European countries servers make a living wage so tips are already (effectively) built into the check. There are two downsides to this approach, however: the server has little incentive to provide good service, and the served has little opportunity to express gratitude. Indeed, in my experience the quality of restaurant service in most European establishments is substandard.
Now, I have no way of proving this, but my guess is there is an inverse relationship between how hard someone shills for a $15 minimum wage and what percentage of the bill they tip.
But that's not my point.
The point is how we think of social interaction: is it to be governed by large-scale abstract determinations (why $15?) that address “causes” and “manage systems,” or is it dependent on the free, erratic, occasionally disappointing but always other-regarding interactions of individuals?
The former seems well-ordered and reliable while the latter leads to disappointment and breakdown (servers spitting in food or customers stiffing on the tip). But systems in general can't compensate for such breakdowns of comity, nor can they encourage the development of the virtues necessary to human interaction, especially when the parties to the interaction are in an unequal position (disparities of wealth, status, etcetera).
I am thinking here particularly of the virtue of liberality, which may be roughly defined as giving from one’s excess; or, put another way, using well what one has the opportunity to use poorly.
Liberality is distinguished from charity in that charity applies primarily to how we relate to those for whom we have affection. Philanthropy, on the other hand, tends to be abstract and impersonal.
Liberality properly applies both to our attachment to money and how it is used in a transactional sense with another human being. Unlike alms, which are not transactional, liberality protects the dignity of the recipient by connecting the receipt of money to some action performed. It is, paradoxically, a kind of merited gift.
Having money above what we need to attend to the necessities of life has always created moral difficulty for humans, but the virtue of liberality addresses both the acquisition of money and its use. Just as a soldier interested in courage needs to keep his weapons in good repair, so also the virtue of liberality asks us to keep our money in good repair. Saving money is no sin, but loving it in itself and thus hoarding it, is.
Indiscriminate dispensing of money neither respects the integrity of the recipient nor develops the prudential judgment of the giver. Liberality most applies, therefore, in personal interactions. In giving, the liberal person frees the money; he opens his hands rather than behaves tight-fistedly.
Prudent generosity in tipping thus meets the demands of the virtue of liberality, ennobling the spirit of the giver as well as affirming the good work of the recipient.
It is a genuinely civil mode of transferring wealth that doesn't upset the delicate balance of market exchange. The same cannot be said of advocating for a rise in the minimum wage which, while having a connection to distributive justice, requires nothing of the advocate and may actually harm the well-being of the supposed beneficiary by upsetting the operations of the exchange market.
Opening a policy brief can be no substitute for opening a wallet.
My recent article on liberality aimed to refine our understandings of the ways in which we can give from our excess.
A well-ordered polity, argued Aristotle, operates as a mode of civic friendship. Friendship, in turn, requires propinquity, reciprocity, and a certain amount of equality between friends.
Where massive inequality exists, civic friendship becomes easily strained. Without propinquity, giving from excess can easily become distorted. Philanthropic giving over large distances not only creates power differentials but typically leaves the giver in a position where he or she doesn’t have much at stake if the giving goes wrong.
“Liberality” could be thought of as a series of reciprocal gestures within the context of a sort of civic friendship that satisfies moral demands in ways that “philanthropy” cannot, and bypasses some of the particularity we might find in notions of “charity.”
A good society would be one where liberality is cultivated, and where its economic and social structures are conducive to such acts.
Matthew Gerken had a telling response to my article. He asked whether I would refund part of my student’s tuition and then have them “tip” me at the end of the semester based on how much they liked my “service.” The short answer to this is “no,” but I would not be dismissive of his charge, nor would I want to open myself to charges of hypocrisy.
It has long been the case in educational systems that professors were dozents who were paid by students at the end of the semester. Saint Augustine, you may recall, expressed great dismay at his students not paying him. While it is not a perfect system of exchange there is much to be said for paying for a service after it is rendered. I’m getting new windows put in my house, and while I put half down I won’t pay the balance until the job has been completed to my satisfaction.
Paying after the service is a way of keeping the worker honest and maintaining some consumer control. With some services the consumer can offer something beyond the bargained price as a way of expressing gratitude for a service that was exceptionally good. All this is distorted in prepaying economies. One of the reasons why the burgers are never going to be as good at McDonald’s as at a good local place, besides quality of ingredients and scale of production, is that you pay for your McDonald’s burger in advance.
Among other things, you lose leverage.
Nowhere are the market distortions associated with pre-paying economies more discernible than in the academy. Indeed, the economics of higher education hardly make any sense whatsoever. Consumers often feel as if they got a better bargain if they paid more money, since “prestige” is the main product they are purchasing. The price structure is completely distorted by borrowed money. The good “purchased” (education) often has no intrinsic relationship to its use (a good career). The “buyers” often have no idea how much it’s costing them, or how much value they will get from it.
Professors, as a result, have little incentive to do teaching well, and the more prestigious the school the less incentive they have. Some schools may attempt to fill the gap with student evaluations, but these are extremely unreliable guides to teaching effectiveness, because just as the professor/student relationship is economically distorted it is also distorted in terms of evaluation.
To go back to Mr. Gerken’s original question: if students paid professors at the end of a semester you would likely see much better instruction from the professors and better learning from the students. Very little in the current economic and social structures of higher education encourages any of the participants to the encouragement of virtue, particularly those such as liberality or truth-seeking.
All of which is to say that when we discuss systems of giving, or mechanisms by which we transfer wealth, the questions of how we give cannot be divorced from general considerations of economic exchange. If an economy is distorted the systems of reward, redistribution, and giving will be distorted as well. Economies are sensitive entities: an activity in one place has reverberations in many others, in ways we don’t often realize. A good economy encourages productive activity, not speculative. It has systems of exchange that are flexible enough to accommodate the economic needs of different actors. It operates on a humane and often intimate scale. It is structured so that it stresses accountability, liberality and other virtues.
I don’t know if Mr. Gerken meant his suggestion seriously, but it is a serious point. Perhaps the whole economy of higher education would be well served by going back to a dozent system (and reducing endowments), but in the interim I’ll continue to cash my checks and trust I’m being sufficiently conscientious in the classroom.
So in order to encourage the practice of liberality, will you be issuing a partial refund of the tuition the students in your classes would have otherwise paid, and instruct them to tip you accordingly? Then you would have appropriate incentive to teach well, which you otherwise wouldn’t.