A few years ago, it occurred to me that you can learn a thing or two about the Austrian theory of the business cycle by watching reality TV. Specifically, there are lessons to be learned about recessions, depressions, and what the economists of the Austrian school like Ludwig von Mises and F.A. Hayek call malinvestment from a show like celebrity chef Gordon Ramsays Kitchen Nightmares.
The shows setup is predictable, as are its patterns: every week, Gordon Ramsay visits and helps revamp and resuscitate a restaurant that is ailing and failing. The restaurant is a disaster, the owner or chef hates Chef Ramsay at the outset, the narrator wonders if he can do it, and eventually everybody is happy at the end of the show. Its clear, though, that without Gordon Ramsays help, the restaurant would almost certainly fail. Kitchen Nightmares is a very fun show to watch, and its usually a story of trial and redemption. For every restaurant saved by Gordon Ramsay, however, there are probably another hundred or so that go under.
Art Carden is a Research Fellow at the Independent Institute in Oakland, California and an Associate Professor of Economics at Samford Universitys Brock School of Business.