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The Many, Many Men (and Women) in the Middle

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In my most-recent column for AIER, I defend middlemen [2]. A slice:

But it’s important to remember that eliminating a supplier from a supply chain merely because that supplier charges for its services is foolish. If those services are valuable — if those services reduce retailers’ costs of acquiring some good for resale — then for retailers to refuse to purchase that supplier’s services causes retailers’ costs not to fall, but to rise. Any retailer who “eliminates” middlemen in this foolish way will itself soon be eliminated by its more competent competitors.

Because in our modern economy every one of us purchases from others nearly everything we use, our economy is a vast complex of middlemen. Its supply chains span the globe. And because these supply chains have been crafted by decades of relentless, innovation-driven competition, they are mind-bogglingly efficient. (If you doubt this last claim, ask yourself what makes possible the inexpensive blueberries that Minnesotans and New Yorkers routinely purchase from supermarkets in January.) And so let’s applaud middlemen, for without them we would all — or, rather, the few of us who would somehow manage to survive — be mired in unimaginable poverty.

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