Die Aufhebung des Bezahlens

by on March 13, 2016 at 3:00 pm in Economics, Food and Drink | Permalink

At [new D.C. restaurant] Pineapple and Pearls, Silverman says there will be no sticker shock. A $250 dinner will cost $250. When diners make a reservation, they will pay half upfront and will be billed the other half automatically on the day of their reservation. If they cancel 72 hours in advance of their reservation, diners will be refunded their initial payment.

…Pineapple and Pearls wants to “eliminate the guest from ever having to look at a bill,” Silverman says. “When you show up, you have nothing to worry about. Everything is paid for. All you have to do is sit back and have a good time. We’ll take care of the rest.”

Here is the full story, here is my earlier post “Why is it so hard to find the cash register?

1 Attila Smith March 13, 2016 at 3:40 pm

Lieber Herr Cowen, warum haben Sie gewählt, den Titel ihres Beitrags auf deutsch zu schreiben? Und warum denken Sie, Herr Harding, dass Silvermans innovative Entscheidung Deutschland (das nicht gerade klein ist) wieder groß machen wird?

2 Adrian Ratnapala March 13, 2016 at 3:58 pm

Who the hell is Silverman?

3 Tyler Cowen March 13, 2016 at 7:16 pm

It is a tease on Hegel, obviously.

4 Ray Lopez March 13, 2016 at 10:22 pm

This is why TC is a chess master. The rest of us see tactics, he sees strategy!

From Marxist.com I got this, which is the closest I could find on this theme. I’m guessing this post is in reference to a transition to a pre-paid and cashless society, which will make for no surprises (or shocks), and I agree is historically inevitable (and will make negative interest rates possible):

In the words of Hegel, everything which exists, exists of necessity. But, equally, everything which exists is doomed to perish, to be transformed into something else. Thus what is “necessary” in one time and place becomes “unnecessary” in another. Everything begets its opposite, which is destined to overcome and negate it. This is true of individual living things as much as societies and nature generally.

5 Nathan W March 14, 2016 at 12:18 am

Perhaps a cashless society would rapidly evolve into technologically coordinated barter systems to evade taxes.

6 Someone from the other site March 13, 2016 at 3:52 pm

I wondered about the exact same thing.

Also the title and your post areas incredibly awkward German.

7 prior_test2 March 14, 2016 at 1:13 am

Hey, in Prof. Cowen’s German speaking world, apparently there is such a thing as a free dinner – if one trusts the title, that is.

Of course, as ever so often the case here when trying to create a narrative, the linked information shows that restaurant owner fully expects to be paid, in contradiction to the headline.

(‘Aufhebung des Bezahlens’ – not so easy to translate fluidly, but ‘removal of the need to pay’ or ‘abolition of paying’ give a good idea of how a German speaking reader would interpret that title, with the ‘end of paying’ placing it more in American headline style. ‘Bezahlen/zahlen’ always means paying for something, and not the means of payment – ‘Wollen Sie bar oder mit Karte bezahlen/Zahlen Sie bar oder mit Karte’ means essentially ‘Do you wish to pay with cash or card?’ ‘Aufhebung’ is a term referring to something being removed/lifted/abolished/no longer in force, etc.)

8 David Wright March 14, 2016 at 3:05 am

Hegel wrote incredibly awkward German. And, contrary to prior_test2, any German familiar with Hegel would instantly get the reference. What is wrong with Cowen’s German is not the use of “Aufhebung” in the Hegelian sense, but the use of “das Bezahlen” instead of “die Bezahlung” as the noun-form of “bezahlen”. Hegel would probably have written “die Aufhebung der Bezahlung”. Even better: “Die wahre Aufhebung der Bezahlung durch die konkreten Erscheinung der allgemeinen Vernunft des Geistes.” Like I said, Hegel was a really bad writer.

9 Max Ghenis March 13, 2016 at 4:13 pm

Great to hear they’re abandoning the traditional tipping model and its harms: it’s discriminatory (e.g. black servers are tipped less, black customers receive worse service due to tipping stereotypes), correlated to sexual harassment and corruption, and nearly uncorrelated to service quality. The more that restaurants follow the lead of Danny Meyer and now Aaron Silverman, the more quickly we can end this damaging and outdated custom.

10 MC March 13, 2016 at 7:22 pm

A survey sample of 394 people, which required statistical correction to prevent a loss of 21% of the sample. Setting that aside, guess who allegedly ‘discriminates’ the most against black servers for bad service:

these results suggest that Black consumers, but not White consumers, might discriminate against Black servers by leaving them smaller gratuities when they are less satisfied with the service and atmosphere quality. (Brewster & Lynn, Soc Inq 2014, p. 16)

11 Nathan W March 14, 2016 at 12:24 am

I imagine a lot of white people would still leave a decent tip because they don’t want a perception of racism, but then never return as a result of the bad service. A black person can hardly (rarely) be accused of being racist against blacks, so they can more easily penalize bad service with a low tip. That’s my guess … Anyways, I’m not shy to leave zero tip for bad service unless the waiter’s clearly having a bad/flustered day and seems a little apologetic about the matter.

12 Keith March 13, 2016 at 7:41 pm

Except it works great. Friends from outside the US always comment about how great the service is here. If the wait staff aren’t hustling for the tip than the service stinks.

13 Nathan W March 14, 2016 at 12:28 am

Absolutely. I’ve spent time in dozens of countries, and while five star restaurants are an obviously different story (or so I understand from movies), service at average to decent restaurants in Canada and USA is head and shoulders above anywhere I’ve ever been. Sometimes it’s nice to just be left alone and have to go looking for the server if you want something more though …

14 prior_test2 March 14, 2016 at 1:21 am

‘Friends from outside the US always comment about how great the service is here.’

And most of the Germans I know don’t like how they have to eat quickly so the next group of tippers is available, remain dismayed at how the price of the meal is not transparent (sales tax playing a role in this perception), and generally find that a system with less service, but where the wait staff has medical care, guaranteed vacation, and are paid decently would all reflect a better place to live.

But then, most Germans fully support the idea that it is illegal to require an employer to force their employees to act in a cheerful manner – when you are in a bad mood, it is no reason to be fired. As Walmart discovered 15 years ago, when their greeter/happy employee concept was tossed out the window by German legal decisions – to general approval.

Germans in general just don’t believe that being servile or expecting others to be servile is a sign of a healthy society.

15 David Wright March 14, 2016 at 3:11 am

I can’t disagree with prior_test2’s observations about Germans’ attitudes, but you will notice that he doesn’t dispute that the quality of service is, in fact, better in the US. Once my mom visited while I was living in Germany and she spilled her drink in a restaurant. Instead of getting the replacement she expected, she got scolded by the waiter. Despite her embarrassment and horror, I couldn’t help but smile at the perfection of the culture clash.

16 Moreno Klaus March 14, 2016 at 5:48 am

I think it is more Germany/NL service that sucks, than US being very good.

17 chuck martel March 13, 2016 at 4:15 pm

More encouragement for the peasants to raid the pitchfork factory. But then again, it is DC, the overlord of its colonies.

18 Attila Smith March 13, 2016 at 4:22 pm

Why is “Die Aufhebung des Bezahlens” awkward German? By the way, your second sentence is -umm- a bit awkward, since it contains no verb !

19 Max Ghenis March 13, 2016 at 4:44 pm

Think you intended to reply to “Someone from other site” – this is a top-level comment.

20 Attila Smith March 13, 2016 at 4:53 pm

Yes Max, you are right. Could Tyler Cowen please transfer my comment where it belongs, namely a reply to the comment of “Someone from the other site” ?

21 Adrian Ratnapala March 13, 2016 at 5:09 pm

I think in this context “area” is a verb.

The next prize to goes for whoever can explain the hell it means.

22 rayward March 13, 2016 at 5:42 pm

Cancellations are a problem for restaurants, which can turn just so many tables per night. I’m from a restaurant family, so I am sympathetic. But really. No dinner is worth the price mentioned here. I’ve been to the finest restaurants in NYC, SF, Charleston, but this is ridiculous. I refuse to attend the Charleston food and wine festival for that reason. Indeed, can those who pay thousands distinguish a $10 bottle of wine from a $200 bottle of wine. Can those who pay hundreds for foie gras at a popular restaurant in NYC distinguish chicken McNuggets. Like I said, I am from a restaurant family, but I am also a realistic and know that most customers would be satisfied with a basket of Chicken McNuggets and a bottle of Blue Nun.

23 Tony B March 13, 2016 at 5:58 pm

If you came from a restaurant family and can’t distinguish Chicken McNuggets and Blue Nun from foie gras and Sauternes, then I feel very sorry for your family’s customers. Really, there’s a difference between deflating pretensions and just being a jerk.

24 So Much For Subtlety March 13, 2016 at 7:20 pm

Well I am not entirely comfortable using McNuggets as my example, but as it happens, roast chicken is one of the most delicious things on the planet. So it is entirely credible people would like it. McDonald’s success proves it.

A lot of food is signalling. A lot of wine purchasing is clearly signalling in that even the professionals do poorly in blind tastings. If you want to be in the business of allowing people to signal, then a restaurant is a good choice. If you want to feed people, you could do a lot worse than roast chicken and Blue Nun.

I think we can all agree that cancellations are almost a crime against humanity though and if restaurants want to punish people for it, they will have my support. Hotels do.

25 Deek March 14, 2016 at 5:40 am

“if restaurants want to punish people for it, they will have my support. Hotels do.”

That will be fine until smaller restaurants go to third parties to sell their reservations. One of these third party sites will assume near monopoly control, take a 20% cut and back the customer to the point where the restaurants terms and conditions are meaningless. As this third party site by now drives 80% of the restaurant’s custom they have no choice but to turn control of huge parts of their business over to reservations.com.

That’s what happened with hotel reservations. I’m sure Michelin stars at one end and informal semi-carry outs at the other will be fine, but the mid-range date night choice will have their terms set by the middleman.

26 Nathan W March 14, 2016 at 8:26 am

Due to charging cancellations and also filling up late no-reservation arrivals with practical consideration for how many reservations don’t show up after, say, 2am, some hotels can run at 102-103% “capacity”.

I worked as night auditor in a hotel for a while and earned the company a few hundred dollars extra a day for the entire time I worked there without ever going overboard and having no room left. However, I got fired shortly after mentioning to several colleagues about how we made a couple dollars an hour less than other similar companies operating nearby (it was easy to extract money from them without the trouble of court, after pointing out some basic legal realities …).

27 Doug March 13, 2016 at 8:15 pm

I am positive that nearly anyone can tell the difference between a cryo-seared burger and a McDonalds burger. Those are the types of dishes you’re paying $300+ to eat at restaurants like Per Se and Alinea. You’re talking about cuisine requires an incredible amount of skilled labor to perfect small details and experiment with cutting-edge culinary technology.


28 Nathan W March 14, 2016 at 12:46 am

I worked in a top ten Australian award winning Italian seafood restaurant for a while back in the day (Italy 1, Camberville in Melbourne). Three hours of every shift were spent preparing a special sauce, at a labour cost of over $50 and materials cost of, I’d guess, about $20-30, and never mind the opportunity cost of what else I could have done with the time and space. The output was a single smallish spoonful of sauce onto each of about 15 dishes, or about $5 per dish for this special flavour. Service was good and the atmosphere was fine dining, but you were absolutely getting your money’s worth, every penny, if you could afford it. Mains were in the range of $30-50 and wines were reasonably priced. However, I’ve been to some places where $30 mains gets you battered and fried something or other with a French accented server who knows nothing about the menu, where table wine starts at $10 a glass.

Given the existence of this second type of restaurant, it seems that quite a lot of people can be easily fooled by a French accent and high prices as signals of quality. Not intended as anti-American, but I think this is far more common in America, where a lot of people think that American cheddar is amazing cheese, that Cheese Whiz is a cheese of ANY sort, and where steak of any sort is often perceived as a delicacy of sorts. Europeans, for example, are famously snobbish about their food, and many hold Americans in much disregard for their ignorance (on average) about gastronomy.

Unless you’re just choosing rare ingredients, and in which case if it’s rare it’s probably unethical to be eating it, I don’t see how fine dining can really provide fully costed value+profits in excess of $100 per person, excluding drinks. Obviously, you’re paying for exclusivity and signalling.

29 Doug March 14, 2016 at 3:04 pm

> I don’t see how fine dining can really provide fully costed value+profits in excess of $100 per person, excluding drinks.

Take a look at an example of one night’s menu at Alinea (definitely the best restaurant in Chicago, probably the best restaurant in America, arguably the best restaurant in the world). There’s 13 courses for $250 a head. Each dish is highly labor intensive, contains multiple components, and is very sensitive to timings and failure. Some might contend that the dishes are small, (otherwise it’d be hard to eat 13 in succession). But while that reduces raw material cost, it only reduces labor costs marginally. That’s not even counting capital costs (Alinea often buys bespoke industrial equipment just for a single dish), higher overhead from doing one seating a day, plates that have to be discarded because they don’t come out perfect, and the fact that much of the chefs’ time there is devoted to experimenting on future menu changes.


Also on the interest of value+profits, it’s interesting that Noma (San Pellegrino #1 ranked world restaurant) doesn’t turn a profit. It has to be subsidized by the Nordic culture council. Similar to Alinea it’s about $250 a head, with 12-18 courses depending on the menu. It does a lunch and dinner sitting, each with about 20-25 people. To produce that requires 50 chefs working 12+ hours a day (plus servers, sommeliers, foragers, etc). Some of those chefs are solely devoted to the test kitchen. Right there, a single meal at Noma requires 12 hours of labor.

30 Nathan W March 15, 2016 at 12:11 am

I wasn’t at all considering multi-course meals. Excellent points all around.

31 Alex from Germany March 13, 2016 at 6:00 pm


32 prior_test2 March 14, 2016 at 1:24 am

Freibier für alle!

33 Adrian Turcu March 13, 2016 at 6:52 pm

Every restaurateur’s dream. I have to cook for this amount of dollars? Check me out expertly gauging quality and quantity downwards, expectations be damned.

34 Luis Pedro Coelho March 13, 2016 at 6:59 pm

Isn’t this just a variation on the now-common idea of having restaurant “tickets” instead of reservations so that cancellations do not hurt the restaurant? The convenience is to the restaurant, of course (which is fine by me; but don’t patronize me with the idea that you are “saving from looking at a bill”. In any case, MasterCard will eventually present me with the bill…)

35 Richard Scott March 14, 2016 at 1:56 am

But the bill ‘pain of paying’ will be associated with MasterCard not disaggregated across all your purchases. And your enjoyment of the aftertaste of the meal won’t be rudely interrupted by an unexpectedly high bill.

36 Keith March 13, 2016 at 7:43 pm

I give this restaurant 6 months tops.

37 Barkley Rosser March 14, 2016 at 3:16 am

Interesting story.. I have no idea if it will last six months or not, but Komi in DC, which it views as its competition, has been around for several years now at about those prices. So it can be done in DC.

The linked article claims that this place will immediately be among the most expensive restaurants in the world and then provides a link to the supposedly 35 most expensive. Does not look like it. One problem is that this place’s price includes wine pairings, whereas most of those listed do not have wine in the price, which can easily add a lot. Also, the list is clearly missing a bunch of places. It has only one from Japan in the top ten, Kyoto’s Kitcho, but there are several others there and in Osaka that are in the same price range. None from Osaka or Tokyo are listed at all, and Tokyo has more three star restaurants than any other city, including Paris.

As for Paris, well, Arpege at 12 is a joke, wildly overrated, although plenty expensive. As for #3, Guy Savoy, this is an excellent place, and maybe they do have this very expensive 18 course meal, but one can eat there for far less and have a fabulous meal, with some special deals getting you in and out for not much more than $100 per person. Really.

As for those who say that there is no food worth any of these prices, well, obviously this is a matter of taste, and there are plenty of overrated places. But the market is tough, and places that do not deliver quality food and service at those prices indeed do not survive, and many on that 35 most expensive list have been around for awhile. Maybe they are fooling people (I think Arpege is, although maybe I was just there on an off day for them), but I think at least some of them are indeed delivering something that is really memorable and outstanding, whether one wants to pay those prices or not.

BTW, I have no idea if their payment system will help or hurt, which is the main focus for Tyler of this thread.

Comments on this entry are closed.

Previous post:

Next post: