My friend Prakash told me about a movement which runs cafes where the rule is pay-what-you-can. The One World Everybody Eats has “more than 60 pay-what-you-can community cafes operating in America, and over 50 others are in the planning stages in six countries.”
The deal is that you eat what’s on offer at the cafe and then pay whatever you wish. They claim that no one is turned away. They note on their website,
Healthy, dignified dining is available to everyone who walks into our cafes, including the nearly 50 million people in America who are experiencing food insecurity, utilizing social programs, and who don’t know where their next meal will come from.
Prakash wanted to know what I thought of the idea. He said that the cafes are “overall profitable.”
I think it is a wonderful idea. What makes it wonderful is the voluntary nature of the enterprise. Some people voluntarily decided to start a cafe where they leave it to their customers to pay voluntarily however much they want. All voluntary trades are mutually beneficial. Therefore as a proponent of free markets — which means that all trades are voluntary and that there are no barriers to entry or exit — I applaud the effort of the people who run those cafes.
I should underline the voluntary aspects of the whole enterprise. The founders were not coerced by anyone, not even the government, to get into this business. They freely chose to do that. There entered freely. And they are not forcing anyone to fund their cafes, unlike the government which forces people — at the point of a gun if necessary — to fund its giving of “free” stuff to people. Then on the other side of the equation, the people freely choose to eat at the cafes, and freely choose to pay whatever they pay. No force involved. Voluntary acts all around.
Brilliant idea. Will it work? Yes, in some parts of the world. In those parts of the world that are the most prosperous, and therefore the most able to afford free stuff. It will not work in a place like India or Somalia. It is not that poor people are somehow morally deficient or that rich people are somehow ethically superior. It is not a question of morality or ethics at all. It is a question of human strategic behavior in the face of scarcity.
In any place where there is a lot to go around, people behave nicely even among strangers. They don’t grab. They politely take only as much as they need, knowing full well that they can come back and get more when they need more. At my local bank branch, I usually pick up a few pieces of hard candy from the basket at the waiting area, or help myself to a hot chocolate or a coffee. I am never tempted to grab a handful because I have more at home. Now if they had put expensive candy, perhaps I would be more tempted.
Where there isn’t enough for everyone, then the old law of the jungle operates: grab while the grabbing is good because if you don’t, someone else will and you will have to do without. The model of that kind of human behavior in a world of scarcity is called “the tragedy of the commons.”
The matter is whether the cafes are sustainable, which translates into the simple question of whether the costs will be covered by the revenues. That can only be settled empirically. Only time will tell. If I were into the prediction business, I’d say that pay-what-you-can cafe model will not last. Certainly a few dozen cafes around the US could go on for years, provided there are rich donors willing to fund venture. But it will not replace the McDonalds’ model of pay for what you buy.
Still, I know of one institution that works on the pay-what-you-can model and has been a going concern for several decades. It’s Shri S. N. Goenka’s institution that teaches Vipassana to hundreds of thousands of students around the world. The model is simple: you sign up for a course (of various durations, starting from 10 days to several months) without paying a penny or even promising to pay anything. Boarding and lodging is also included for free, not just the training in mindfulness meditation. At the end of the course, you donate whatever you can afford for the expenses of future students, just as someone before you donated and made your training and stay at the center possible.
That’s a very sensible business model. (Unlike leftists, I love the word ‘business.’) People voluntarily offer to teach, other people voluntarily accept the opportunity to learn, and people voluntarily donate. It has demonstrated that it is sustainable.
What do you think makes Goenka’s model work?
Life is a Random Draw 
Similar things are happening in South India where you can get a fairly good meal for five rupees (7 cents) in one of those Anna Canteens or Amma Canteens. Outside, the cost of the meal is around sixty rupees or so. As you discussed some time ago, one day we will wake up in a post scarcity economy.
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I do not think Amma canteen is a good example. It runs on tax money (i.e. money forcibly extracted out of people at gun point). Aravind eye hospital may be a better example.
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As has been pointed out, the government forcing people to pay for “free” stuff is not the same thing as people voluntarily providing food for those who cannot afford food. That was the main point of the post.
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Wikipedia works on same model i.e. voluntary effort and donation. Khanacademy as well. The world is made up of mostly good people. We may be misinformed many a times, but very few of us are really evil.
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