The Price of Everything - Eduardo Porter [82]
This view is further bolstered, social scientists suggest, by American racial diversity. In 1996, the American sociologist William Julius Wilson wrote that American whites rebelled against welfare in the 1970s because they saw it as using their hard-earned taxes to give blacks “medical and legal services that many of them could not afford to purchase for their own families.” They didn’t think it was fair.
In the United States, an optimistic belief in a just market economy is a useful worldview to have—encouraging the investments that are most likely to lead to success. In France—where taxes on high incomes are higher and social supports for those with low income are more generous—these beliefs would be less profitable.
CULTURAL NORMS OFTEN lead to what many economists would consider blatantly crazy behavior. Have you ever considered why you tip? To a classically trained economist tips are insane. They amount to paying something for nothing, giving money away. Tipping your regular barber might save you from getting an ear lopped off the next time around. But what’s the point of tipping a cabdriver you will never see again? Tips are not, by any means, universal. They are rare in Europe and Asia. I recall a waiter at a restaurant in Tokyo chasing me onto the street to return a few thousand yen I left on the table. Presumably, he thought the absentminded gaijin had forgotten his change.
In the United States, however, tipping is at the root of elaborate rituals. Even one-shot diners who will never return to a given restaurant insist on tipping the customary 15 percent. Waiters deploy friendliness to increase their rewards. Studies have found waiters and waitresses who introduce themselves by name, repeat customers’ words when taking their order, touch customers slightly on the arm, or draw a smiley face on the back of the check tend to get bigger tips.
These differences are, in part, adaptations to different labor markets. In the United States waiters earn little. As the minimum wage has risen to $7.25, for waiters it has been stuck at $2.13 since 1991, on the grounds that they can supplement it with tips. But the labor-market pricing differences are themselves rooted in different approaches to economic justice. Europeans believe such wages are unfair, and have thus imposed compulsory service charges to add to the bill instead.
THE PRICE OF REPUGNANCE
There is ample evidence that culture can distort prices. Witness the betting at any international soccer match. No self-respecting fan will vote against the national team. National pride invariably leads fans to overestimate their team’s odds of victory. Bookies appreciate the biases. But cultural preferences can subvert economic logic entirely, impeding transactions at any price.
At Le Cheval du Roy, a butchery in Caen, France, in 2009 one could buy horse fillet—a choice cut—for €30 per kilo. In parts of the United States, trying to carve up such a cut might land a butcher in jail. A law in Illinois banning such butchery forced the last American horse slaughterhouse to close in 2007. For the past few years, Democrats and Republicans in Congress have been trying to pass a bill to ban the possession, transportation, purchase, sale, delivery, import, or export of horse meat or horses if they are intended for human consumption. Serving horse meat to humans has been illegal in California since 1998, when state residents voted a ban into law.
This has little to do with the welfare of horses. It is perfectly legal to kill them