“Shakespeare in Love” and the Humanity of Business.

I’m reading Tom Stoppard’s biography by Hermione Lee. I never thought I could read 900 pages on a subject previously  unimportant to me with such delight. It is a marvelous book. Stoppard’s life is interesting and eventful, it provides a good glimpse into the world of culture and entertainment in the last quarter of the 20th century. Plus, Lee’s analyses of Stoppard’s plays are masterful.

One thing that comes out of Lee’s biography of Stoppard is how independent-minded he was, and how—as opposed to many of his colleagues—he never conceived of himself as a guru, nor a “joiner” of good causes. For example, when some of his fellow playwrights signed a letter to endorse a ban on all performances to segregated audiences, so as to signal their support for the anti-apartheid fight, he chose not to. “His instinct was against ‘isolationism’. He preferred to give his royalties to an anti-apartheid organization” but allow people to see his work.

Lee reports this comment from Stoppard to the campaigner who wanted him to join: “Of course the idea of a segregated audience is abhorrent. So too is the idea of a playwright being imprisoned or otherwise victimized for his work—but did any of your signatories, I wonder, ban productions of their plays in this time last year in Czechoslovakia, or in Poland?”. Stoppard was shocked at the hypocrisy at the invasion of Prague in 1968 and was critical of the simultaneous disdain for Western institutions and total blindness to what was happening behind the Iron curtain so common in those years among intellectuals in the “free world”.

Stoppard is hardly an “unphilosophical” writer. His work is filled with profound philosophical riddles. I never saw a performance of “Jumpers”, perhaps his most philosophical play, but after reading Lee’s book I know that, as soon as theaters come to life again, I’ll search for it. Nor did Stoppard stay away from political engagement. Quite the opposite. But his politics were quite different than many others’. See this intriguing piece by the late Norman Barry. On politics, he had a great line, used more than once in his plays: political opinions are often, and perhaps entirely, a function of temperament.

Moreover, Stoppard was not convinced that good theatre is only an occasion for a writer to show off as a good person – or an erudite one. He maintained that “a theatre’s job is to prevent people from leaving their seats before the entertainment is over”.

My acquaintance with Stoppard’s work is limited (I am not much of a theatre-goer), but the book leaves you thirsty for more. So I ended up watching and re-watching a few films to which he contributed his writing (though he preferred theatre to the cinema). I was struck by Shakespeare in Love, which I watched as a kid and found amusing, and found amusing again today. It is a constant stream of wit and jokes and deals lightly with some very important subjects, beginning with: can theatre, and art more generally, show us the nature of love?

Lee points out that “the most joyous parts of the film are the challenges of getting a play funded, cast, written into rehearsal and onto the stage. It’s a loving, comic tribute to the theatre”. There is an element in the plot that I think can be considered as subtly McCloskeyan. It hasn’t to do with Shakespeare per se, but rather with “the challenges of getting a play funded”. Most of the works of the bard “sing of honorable aristocrats or comical peasants or sweet shepherds” in spite of the fact “his audience included a big promotion of the merchants and apprentices of businesslike London” (McCloskey, Bourgeois Dignity).

In “Shakespeare in Love”, impresario Philip Henslowe is in debt to the ruthless moneylender Fennyman. At the beginning of the movie, the latter is hardly a commendable person. But he is struck by the magic of theatre. He profoundly connects with the beauty of Romeo and Juliet, perhaps more than Henslowe, for whom the theatre is routine. Fennyman becomes a committed investor, a friend of actors, and, for a brief and hardly memorable moment, an actor himself. I suppose some people may consider his story a sort of redemption via art. I consider it quite differently. I think it is great for Shakespeare in Love to show us that business people are not blind to art and can actually grasp it better than others. It emphasizes their humanity. On the contrary, the most dislikable character in Shakespeare in Love is Lord Wessex, who marries for money, is both aristocratic and quite dishonorable in his actions, and is totally oblivious to artistic expression. In the movie, Stoppard of course celebrates those who understand art and beauty whatever class they belong to, as if they were members of a fraternity that includes usurers, apprentices, nurses, and Queen Elizabeth herself. A great celebration for art but also an indirect appreciation of the profound humanity of those who work with money and yet can be sensitive souls too.

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Putting Entrepreneurship on the Menu

Even before the arrival of COVID-19, the restaurant industry was being transformed by a variety of forces, in particular the competition for home delivery among UberEats, GrubHub, DoorDash and others. In addition, pop-ups, test kitchens, and food trucks offered unique dining opportunities at a very small scale and for short periods of time. These acts of entrepreneurship were possible because the food service industry is still largely characterized by “permissionless innovation.” The regulatory costs of entry are low, and physical and human capital are fairly mobile, all of which allows people to try out ideas and see what sticks. As COVID-19 has created new challenges for restaurants, even the innovators have to keep innovating to meet the new demands of consumers, not to mention complying with local public health regulations. Often the most valuable sorts of entrepreneurial innovations are not ones that make big headlines but ones that instead make improvements in existing products and services to better meet the needs of consumers.

Two examples of this sort of entrepreneurial innovation are taking place here in Fishers, Indiana. Although both of these innovations pre-date COVID-19, one is well-poised to take advantage of the changes the pandemic has brought, and the other has demonstrated the kind of flexibility that is often necessary for effective entrepreneurial responses to exogenous shocks like a pandemic.

The first example is a company called ClusterTruck. Based in Indianapolis, they recently opened a second kitchen here in Fishers. They are a nice example of innovating on an innovation. One of the problems with food delivery services like GrubHub is that the drivers are not employees of the restaurants, and the restaurants are dependent on the schedules of the drivers when they promise a delivery time. We’ve all had the experience of our order coming much later, or even earlier, than expected, or having food that was no longer hot. The creators of ClusterTruck were, as Israel Kirzner puts it, “alert” to the opportunity to improve that model. One of the ways they did that was by creating a restaurant that is delivery and pick-up only.

ClusterTruck has integrated the food preparation and the delivery process in two ways. First, the drivers all work for them. But they also won’t start preparing your food until they have one of the drivers committed for that delivery. This prevents food from sitting and waiting for a driver to pick up. And without seating, their whole kitchen is geared to competing and preparing delivery orders. It’s not a sideline. It’s what they do. Their app also has several nice innovations. One of those is the ability to order ahead for delivery at a specified time. With in-house drivers, Clustertruck can meet a pretty tight window that way. The other nice innovation is the ability to share a link to your order that allows other people to piggy-back on the same order but pay with their own account. So offices ordering lunch don’t have to worry about Venmo or other ways of settling up. Everyone can order and pay for their own meal but have it delivered together. And to be able to satisfy groups and families this way, their menu spans a variety of cuisines, from a few Asian and Mexican dishes to pub food and pizza.

This full integration from preparation to delivery, along with ordering ahead and the ability to easily order in groups, puts them a step ahead of the other platform-based delivery services. Nonetheless, like every other restaurant, they’ll have to provide good eats if they are going to expand the way they have planned. As the current big wave of COVID-19 will enhance the demand for home delivery of prepared food, their entrepreneurial innovations seem well-positioned to succeed.

The second example of innovation is illustrative of the flexibility that good entrepreneurship demands. COVID-19 has been devastating for local restaurants, as they operate on such thin margins that the loss of business over the last several months has been too much for them to continue. But how to keep a great menu alive in a different form that can work in the world of COVID? One answer comes from the world of test kitchens. This model, which predates the pandemic, is one in which space is created for a small number of counter-service restaurants to share, while rotating the particular cuisines that occupy the various slots. A particular idea might only be there for a few months while the owners try to discover if their model is workable, hence the “test kitchen” concept. This model allows them to share some overhead costs and work out recipes without having to worry about table service or other elements of a full-service restaurant. We have a test kitchen like this located inside a local brewery, which itself is a nice innovation given the mutual benefits involved.

One of the kitchens at our Fishers Test Kitchen is an Asian street food place called Lil Dumplings. It was opened by the chef from Rook, a very well-regarded Indianapolis restaurant, and served mostly dumplings. The full service Rook was a casualty of COVID, however, going out of business earlier this fall. But that loss also presented an entrepreneurial opportunity. The former chef recently switched the menu at his Test Kitchen location over to ramen and steamed buns, and is serving several items very similar to customer favorites from Rook. The test kitchen model gives entrepreneurs who are alert to changes elsewhere in the market the flexibility they need to quickly switch over a menu and meet that new demand. It also provides a cheap way of discovering whether Rook’s dishes are still valued by its former customers. (I can report that they most definitely are!) And doing it with counter service, carry-out, and delivery options makes the whole thing work in a pandemic.

Too often we think about entrepreneurial innovations as being big, grand things like the invention of the automobile or airplane. In fact, most of what good entrepreneurs do is to take existing products and services and find ways to improve them around the edges. Inventing the cell phone is great, but adding a camera on to it gives it an amazing new range of possibilities. Reorganizing the way in which a product or service is provided, as ClusterTruck has done, is one way to innovate, and taking advantage of a flexible production structure to recover some value from a failed business is another. Good entrepreneurs are people who are alert to these kinds of opportunities and take advantage of them to make consumers better off. Creating environments that allow for permissionless innovation of this sort is the best way for policymakers to attract that entrepreneurial energy and thereby improve their communities.

 

 

For more on competition and entrepreneurship, see Steve Horwitz’s Liberty Classic on Israel Kirzner’s classic work Competition and Entrepreneurship, new this month at Econlib.

 


*Steven Horwitz is the Distinguished Professor of Free Enterprise and Director of the Institute for the Study of Political Economy in the Department of Economics in the Miller College of Business at Ball State University in Muncie, IN. He is also an Affiliated Senior Scholar at the Mercatus Center in Arlington, VA, a Senior Fellow at the Fraser Institute of Canada, and the economics editor at the Cato Institute’s libertarianism.org. He is the author of four books, including most recently Austrian Economics: An Introduction. He is also the 2020 recipient of the Julian L. Simon Memorial Award from the Competitive Enterprise Institute.

For more articles by Steven Horwitz, see the Archive.

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Centralization, Decentralization, and Coordination

David Rosenthal writes, very powerful economic forces drive centralization of a successful decentralized system. . . the fundamental problem is that decentralized systems inherently provide users a worse experience than centralized systems along the axes that the vast majority of … Continue reading

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