Something For Nothing

By: Phil Williams

I don’t want to brag or anything, but back in the day, I was one smooth operator. On one occasion, I went to a local restaurant for a cup of coffee, dropped a ten-dollar tip and headed for the door. The beautiful waitress actually ran out the door with that ten spot in her hand asking, “What are you doing?” to which I gave a suave and debonair reply: “Leaving a good tip for my favorite waitress,” Like I said — one smooth operator. We have now been married for thirty-seven years.

Generally speaking, tips are important, and designed to do two things: provide a little extra compensation for someone who has done a good job and to bless them by showing appreciation. But there is a strange phenomenon that American culture is experiencing right now. Have you noticed? At every turn we are being asked to give a tip for someone who has done nothing.

One of the hallmarks of the free market is the matching of private sector success with customer satisfaction. In the service-related sector, tips can be an indication that someone appreciates effort to reach their approval. Forced tipping creates a grudge match between the two.

Recently, my wife and I stopped by a little self-serve yogurt shop. We picked up our cups, served ourselves, and added our own toppings, all while the staff stood behind the counter and watched. As we checked out the very nice lady said, “Please insert your card, and it will ask you a question.” The question was whether or not I wanted to leave a tip that amounted to a percentage of the overall sale…um, NO. I literally did all of the work and paid you for it, so why would you ask for a tip?

This new socio-cultural trend is referred to as “guilt tipping” or even “gratuity gouging.” The worst cases are those you pay before you get the product, like the barista who charges you first, leaving you with a sudden sense of dread that she just saw that you did not leave a “guilt tip” and now she’s reaching for the “special muffin.”

Reports indicate consumers are developing “tipping fatigue,” a weariness with the new demand that we must give something for nothing. I’m all for doing something to bless others, but sooner or later the market will begin to self-correct, and too many requests for the guilt tip will result in fewer tips overall. It becomes the retail version of panhandling, no different than the guys who walk up at the red light, spit on your window, rub it with their dirty sleeve and demand payment. It was something you didn’t ask for, they asked for payment they didn’t earn, and you are expected to comply.

People don’t like to be pressured into tipping. In fact, people in a free-market society don’t like to be forced into doing anything with their hard-earned dollars that they don’t already want to do on their own. That’s part of what makes the free market free.

Half of the free market is the producer of goods and services. The long held concept is that building the better mousetrap means that your company will rise to the top in a “survival of the fittest” scenario. But the other half of the free market is the consumer. In a truly free market, consumers want what they want, not what they are told to want. If the product has proven its value, consumers will spend their dollars. It is supply meeting actual demand.

For example, in the early days of cell phones, they were considered novelties. They were nice but cost a lot if you “exceeded your plan.” Over time they became affordably convenient, and could even fit in your pocket. Then texting became a thing, they included cameras, and they gained internet access. Now it is inconceivable that someone would be without a smartphone and many houses have done away with landlines.

The free market works when the private sector, left alone to do their work, builds successively better mousetraps, and consumers decide that those mousetraps are what they want. Don’t tell us to spend something for nothing.

But now we have the guilt tipping of electric vehicles (EVs).

EV manufacturers could easily move through the same stages of market integration and expansion that I just described for the now ubiquitous smartphone. Over time the private sector would invest its own dollars, grow their market share, and prove their worth. But instead, quite the opposite is happening. The fake market is self-correcting as consumers have become fatigued with the EV push.

Government has stepped in and created a false market and pushed a supply-and-demand narrative well ahead of its time. The EV is fast becoming the automotive version of “guilt tipping” — Something for nothing. A technology which has its merits and many drawbacks. Under normal market conditions some will choose EVs and many will not because we are still accustomed to being in a free market society.

But more and more, the government has decided that they are like the expectant barista who tells you to pay and wait for the card reader to ask you a question about tipping before you get what you really came there for. They will ask, they will cajole, and they will push their government subsidized not-so-free market product…and you and I will have to make a hard decision – Do we look them in the eye and tell them they haven’t proven their worth yet and risk getting the “special muffin?”

Free market economies only work when the consumer is actually free to choose what was actually freely developed and marketed. Otherwise the market will self-correct as consumers get EV guilt tipping fatigue.

Stop asking for something for nothing.

By: Phil Williams