You tip people in the service industry who (within the parameters of their job description) may make your day significantly better or worse.

The cashier gets paid to meet a strict criteria of service expectations.

The dancer at club Jiggles can spend that five minutes of an Aerosmith song (or SEAL, but it’s one of the two right?) however she likes but if the RNC is in the house she knows she better work for it.

The cabbie can miss lights, take detours, drive the speed limit, obey one-way signs. But if he’s willing to catch you that plane it just seems fair to put an extra tenner in his hand.

The practice started in restaurants as a way of facilitating small business. Tipping ensures that bad waitresses will get paid less and move along compared to a better or prettier waitress. Letting the customer administer payroll, performance review, merit raises, in the form of her take-homepay takes a load off the owner who is probably also pulling burgers off the grill in the kitchen.

I know from experience that I get the best service in Japan where it is an insult to tip and the worst service in Sydney (only considering major cities I’ve eaten in) where the wait staff always seems bored, or drunk.

See To Insure Prejudice: Racial Disparities in Taxicab Tipping by Ayres, Vars, and Zakariya.

As I commented recently at the ThinkMarkets blog, my point has nothing to do with free speech, the first amendment, and freedom of expression. In business, you can get fired for saying certain things that are a lot more civil than what he says. It’s about civility, not freedom of speech. If you don’t understand this, that might put you in his camp.