If, like Kish and me, you like to watch The Food Network from time to time, you’ve been exposed to capitalism at its very essence. Whether it is Diners, Drive-Ins and Dives, where great food made from scratch earns raves and steadfast loyalty from customers, or the latest competitive cooking or baking show, or Restaurant Impossible, where the host tries to rescue a failing business every show, viewers of The Food Network regularly see how capitalism works.
Restaurant Impossible is a good example. Each episode, chef Robert Irvine takes his bulging biceps to a new restaurant that’s on the skids. In short order, he finds out why the place has one foot on the banana peel. The food is slop. The service stinks. The decor is dreadful. The owner doesn’t know how to keep the books or otherwise run a successful business. The kitchen is a grease-laden horror story. The cooking staff doesn’t even know how to properly chop vegetables.
The viewer quickly understands why the marketplace has spoken and the business is doomed. Irvine, however, injects $10,000 and effort into the venture and tries to turn it around in two days. The place gets redecorated. The menu gets changed. The staff gets trained and a kick in the butt, besides. The owner gets schooled on basic business and finance principles. And, quality and the importance of serving hot, tasty, attractively presented food in a pleasant setting are emphasized and re-emphasized. After two days the place reopens to rave reviews and we learn how the business fares over the next few months.
In short, Irvine and his team are like the Bain Capital of the restaurant sector of our economy. They don’t get an equity interest in exchange for their investment of time and money, but the principles of what they are doing is the same: figure out why a business is failing, decide how to fix the problems, and then spend the money and time necessary to try to turn the business around. In the real world, unlike on Restaurant Impossible, sometimes the turnaround can’t be achieved.
Restaurant Impossible is a weekly, one-hour lesson in business basics and the “invisible hand” at work. Adam Smith — and probably Mitt Romney, too — would be proud.