When the waiter doesn't give exact change

I tend to write about weighty things. Life also has little details.

I still pay for some restaurant meals with cash, especially if it's a lunch where the total bill is under $20. Waiters have been making occasional mistakes for as long as there have been waiters, yet today I write about something else.

It may have been ten years ago that I first ran into the idea of waiters deliberately not giving you exact change. The first problem is psychological. When people my age were young, a quarter was a valuable coin -- because of inflation but also because children are much poorer than adults. It is no longer of much importance to you if you're being a rational economic actor, but it still has that trace in my feelings. So if their change is off by even a quarter, it is already changing the rules of the game. They're forcing you into the realm of approximations where you're supposed to think that maybe a quarter doesn't matter. I've never known a waiter at a Chinese restaurant to do this, and it's one nice feature of Chinese restaurants (a tiny one, to be sure).

Say the bill is $10.25 and you give them a twenty. If they bring you a five and ten ones, I find it mildly annoying for the reasons above but not too bad. I figure they are being generous and offering me a free quarter. I proceed to leave a cash tip. I can verify it's correct because I see two ones there and know it is 20% of my ten-dollar tab.

What I really dislike is when they only bring you a five and four ones. You've been shorted by seventy-five cents. Who has pocketed that seventy-five cents? I assume it is the waiter, not the restaurant, though it's not entirely clear. Next, they are assuming you are going to leave a tip -- which goes against the social form of a tip as a voluntary payment. But what's more, they are making you do extra math. If I want to leave a 20% tip I should now put down one dollar bill and a quarter. Now when I look at the cash on the table as against my ten-dollar tab, it looks like a very poor tip. But if a quarter isn't important, then I could just leave a dollar. Yet I'm also aware that that is a tip under 20%, so there's some temptation to leave an extra dollar to be sure it's enough.

As long as we as a society are still using coins, we should use them right, partly to be in harmony with our past.

I am happy with retail stores that have a dish of pennies, because you can grab one to cover your purchase of $10.01, and it's also a place to put the few pennies you might get in change. Even when I was young, pennies were not very important. But the vital thing is that it is voluntary. I can if I choose fish in my pocket for that extra penny I owe, and I can pocket the pennies I get from change. I think of penny dishes as an arrangement you see in places on the lower end of the economic spectrum. Maybe there's some stigma attached to it, but I don't think there should be.

I am sympathetic to restaurants adding 18% or 20% to the bill for parties of five or more. When it's no one person's job to make sure everything adds up to include a decent tip, I presume the total is often short, which is why they adopt these policies. In that case there is real money at stake.

In fact, when I order a lunch special that costs $10 and ask for water as my beverage (because in fact water is the beverage I want most), I will typically leave a tip of 30% or even 40%. They've done as much work as they would for a more expensive meal. But that is my choice, and that makes all the difference.

Social mobility isn't important, improving the condition of the poor is

The Atlantic in its August 2019 issue had an article about Raj Chetty, a brilliant economist who has achieved a vastly better understanding of social inequality using fine-grained data that was not available to earlier researchers. One result of his work is identifying opportunity zones, noting that when people from poor zones move to those places, then their children will have higher lifetime earnings. If promising initiatives like this were implemented, social mobility would increase.

So the key question he is addressing is social mobility. He notes that someone in the bottom fifth of family income making it to the fifth has a 10% chance in Salt Lake City but only a 5% chance in Milwaukee, a disparity he would like to fix . He is far from alone in focusing on this -- the feeling that a good society is one where more poor people have a chance to make it.

I was following along without complaint, but suddenly I stopped to ask this question: Why is this an important goal? It assumes a zero-sum game, and associated with the upward mobility of someone in the bottom 20% is the downward mobility of some other person or persons.

Perhaps the assumption is that this poor person is deserving of higher income on account of merit -- they are smarter and harder-working than those people whom they will leap over. More on that later.

Or perhaps the idea is that the bottom 20% is a class, and this class deserves to have some of its members move upwards. This strikes me as an illusion. A family of the bottom 20% that makes it to the top will merge into it -- the children will be indistinguishable from the rest of the 20%. I could see the argument if the category was race. Black people and their children are still black in the top 20%, so they are visible and an example to others of what African-Americans can do. But the class of poor people in general is defined by nothing but poverty. It's a fair guess that most people in the top 20% today had ancestors 100 years ago who were poor.

Far more important than social mobility is to restructure society to improve the circumstances of the bottom 20%. One simple way to do this is redistributive taxation. I have suggested wage magnification as one way to do it (the government turning a $12/hour job into an $18/hour job), though a guaranteed minimum income is another way. Strengthening those parts of the social safety net that benefits the poor (such as Medicaid or food stamps) would also help.

There is no doubt that wealth has its privileges and the children of the wealthy have much better chances than the children of the poor. It would be great to dismantle discrimination (which is very real), but I'm not so sure about extraordinary measures to allow a few more poor people to make it to the top.

Suppose we allocated income in a totally random fashion. When each child is assigned a social security number, they also get their lifetime income. A few will enjoy the riches of being in the 1%, most will be in the middle and some will be poor. The child of a rich family would be as likely as the child of a poor family to end up in the bottom 20%. That doesn't sound like any kind of improvement to me. An improvement is improving the lot of the bottom 20%, however they got there.

There are other factors that make social mobility complicated. One is that "merit" is somewhat heritable. If you're a hard worker, the chances are that your children will be too, based on what you teach them and the example you set -- and possibly to some extent on genetic endowment. If over the course of decades many of those with merit in the bottom 20% rise, there will be fewer left who deserve to rise based on merit. I have read that today class is more important than race in determining future earnings. The children of the black middle class do pretty well, and the children of the white lower class do much less well.

I like the idea of a society where hard workers who create useful things earn more money. I don't mind a society where if they create something of enormous value, they can get enormously rich. As long as there is a disparity in wealth, there is the question of what can be done with it. We seem to all agree that they can buy a fancier house and car and consumer goods. In contrast, many people share with me the view that good health care should be available regardless of income. Rich people should not be higher on the waiting list for organ transplants. But another thing people like to do with their money is to spend it on their children or leave it to their children when they die. If we really want a society where children of rich and poor start out on an equal footing, one implication would be an inheritance tax of 100%. To me that's too extreme and doesn't solve the fundamental problem.

The children of the rich are not inherently more deserving of good things than other children. Here's a radical idea (for a leftist): they are not less deserving either. As long as the choice is where to put people on a zero-sum ladder of family income, I see no real benefit to shaking things up. In fact, studies have shown that ordinary people feel that to take from a rich person to make them poor is unjust, though they feel less that way if they only recently became rich.

Some of what I'm suggesting may sound like a conservative argument -- things are fine the way they are, the children of the rich can go right on getting benefits the children of the poor do not have. But I am instead endorsing a more radical left-wing view -- the idea that we should raise the condition of the bottom 20% -- which necessarily requires lowering the condition of the top 1%, as no one else has the money.

The dream of mobility is that "anyone can make it". But even in a society with good mobility where anyone can make it, not EVERYONE can make it. I'm more concerned about the large majority of those born in the bottom 20% who will remain in the bottom 20% even if social mobility is increased.

Where was the power of the rich in the 1930s?

The social safety net is a no-brainer to me. Capitalism has created great wealth and also created great inequality. Starting with Roosevelt in the 1930s, the US built a social safety net, paid for by taxes on the wealthy. The other industrialized nations have all taken the same path. And yet today in the US this concept is under attack. Leading the charge are wealthy Republicans whose personal interest is aligned with lower taxes. But they are also backed by a large number of working people who benefit from the safety net they oppose, acting against their own self-interest. How did this happen? We are told that the wealthy wield great political power, and there is a lot of truth to that.

But how were things different in the 1930s? In Roosevelt's landslide victory in 1936, he won every state except Vermont and Maine. Yet his support was far from unanimous. The popular vote total was 61%, and his Republican opponent got 36%. Over a third of the voters disapproved of him. Presumably the rich were disproportionately represented among that one third, but they had a large minority of ordinary people. Whatever arguments the opponents were making have not made it into the histories I have read. How come the rich lacked power then and yet they have so much of it now?

One of the many things I have been curious about is the US reconstruction of Japan after World War II, carried out in large measure by Douglas MacArthur. The Wikipedia article notes that it was a rare opportunity for one nation to largely remake the society of another nation. Yet while MacArthur was a staunch Republican, the blueprint of society that was imposed on Japan was very much like Roosevelt's New Deal. From Wikipedia, "MacArthur's efforts to encourage trade union membership met with phenomenal success, and by 1947, 48% of the non-agricultural workforce was unionized." Elected Republican legislators might have recognized that the New Deal was so popular with the US electorate that it was unwise to suggest dismantling it. But there was no parallel concern for the views of the Japanese. So perhaps MacArthur was an example of a fair number of Republicans who were convinced that the New Deal was a good idea? Or did they just lack insight, somehow?

In my youth I was earnestly devoted to the goal of a socialist revolution the US. I had enough perspective to look at a wide range of nations where there had been socialist movements, and compare those that succeeded and those that failed. It seemed to me that the key factor in the victory of a socialist revolution was overwhelming incompetence on the part of the existing regime. Where the powers that be had enough political savvy to divide the opposition and buy off parts of it (for instance) the revolutions failed.

So is it possible that the rich in the 1930s just lacked vision and a good PR operation? And that they finally got enough political wisdom to add to their financial advantage to bring about the Reagan revolution of 1980? Or is it possible that through the 1960s they had scruples about just plain lying, and the new generation of right-wing activists lost those scruples?

I would welcome other perspectives on this mystery.

The Biggest Picture

We often speak of backing off from details to look at the big picture. Here I'm going to back up to the biggest picture I can think of. In descending order of importance:

1. The world is an amazingly complicated place. There might have been nothing at all, or a universe with nothing but stars, dust and rock. But here on the surface of this planet we can perceive amazing complexity. The world is interesting!

2. We long for purpose. We want to know what's right and wrong -- what's good and bad. Whether we live up to our standards or not, we want to know those standards exist. They don't. There is no inherent right or wrong and no inherent meaning. In reflective moods people sometimes rage over the unfairness of our mortality -- whatever we create in our minds will be destroyed when we die. Mortality isn't the key obstacle to meaning, however, it's just the first and most obvious one. If we lived for thousands or millions of years, there would still be no objective meaning, or right and wrong.

3. We are animals, and a big part of our human nature is our minds. Our minds have been profoundly shaped by evolution. Like other animals, we seek pleasure and avoiding pain, but we as humans have more complicated desires. In the absence of an objective right and wrong, we still feel that there is right and wrong. The source of this conviction is our human nature as shaped by evolution. We value fairness, loyalty, and love, for instance. We value our human relationships, especially those with partners and children. We seek status and strive to better our condition or keep it from worsening. The most profound reason we fear death is that we are programmed by evolution to fear death. For some people religious belief is central. I'm confident they are mistaken as to matters of fact, but in the absence of any objective purpose, what they have chosen is no worse than any other.

4. Our collective human activity is causing damage to our environment and natural world which cannot be corrected for millions of years. Our future for those millions of years will include far less biological diversity. Climate change may make the planet a much less hospitable place for humans as well. Yet bad consequences that last millions of years seem unable to motivate most people more than bad consequences that last ten years (or even just one year or one month).

5. Our human nature constrains us but also allows us considerable freedom in how we organize our societies. Compared to most of human existence, things are very good today in western nations. We do not fear the arrival of some army within twenty years that will kill, rape, pillage, and destroy everything we have built. It is rare that others take our property or our lives. The vast majority of the time, our fellow citizens will help us achieve our goals if it doesn't inconvenience them much. To take a very simple case, in the grocery store aisles we move our cart to the side when we stop to let others get by. We have also created great prosperity, even for our poorer citizens. Entertainment via electronic devices is virtually limitless. We have eliminated serious infectious diseases, we have effective medicines for medical conditions that have plagued humanity throughout our past. And effective painkillers mean we don't have to die in agony any more.

6. We also can see so many ways that things could be better. People have somewhat different values. Some value greater independence and less government involvement in their lives, even if it means more suffering for those who are less well off. Others (including me) value the common good more, and seek reduced income inequality, a better social safety net, and less political power for the rich. We seek to reduce discrimination based on identities, such as race, sex and nationality. I value the rule of law, democracy, and an open society, the constellation that is perhaps the single most important thing under attack by Trump and his Republican allies.

7. Everything else. Here are the more mundane concerns of our lives that occupy 99% of our attention and effort. Eating, sleeping, working, socializing with others, sex, exercise, and TV shows. Bigger-ticket items here are getting a better-paying job or one with better working conditions, finding a life partner, and maintaining our health as best we are able.

A wise formulation of how to live life is to accept what cannot be changed, to work to change what can be changed, and to be wise enough to tell the difference. Items 1 through 3 above, the most important, are impervious to change.

Some of us take time to celebrate what we've achieved in point 5 and work to not lose what we've achieved. Some work to make things better regarding points 4 and 6. A very few put a lot of effort into them. Mostly we live our lives in category 7. And given our human nature, that is as it should be and how it has to be. But understanding the earlier six points is part of an authentic, grounded life.

I wonder how other people would formulate their big picture differently.