Marina Krakovsky

This book takes a deep look into the value that middleman provide. To be useful, middleman must provide value to both the sellers and the buyers in the exchange. Thing is, middleman need to sustain their trade as well, that means taking a share of the profit from the exchange. When middleman do their job right, they provide more value than their expense, benefiting all those involved. The bad reputation of middleman comes about when they cost more than the value they provide.
Krakovsky provides six different ways that middleman can provide value when they act as the Bridge, Certifier, Enforces, Risk Bearer, Concierge, and Insulator. The six value providing activities are not mutually exclusive. Each is needed and sometimes required in many different situations. Each has the power to provide massive value to society. Each role increases efficiency by allowing for less idle capacity, reducing time spend, or reducing stress for either party. But should the middleman take more profit than the value the service provides, it will be easy to cut the middleman out of the exchange.
Being the bridge means reducing the transaction costs between people. Many markets were not sustainable due to high costs, the middleman can bridge the gap by reducing those costs. The certifier helps by sorting through information and providing the appropriate value to the information. Without expertise, it is difficult to discern the value of information, while the certifier has the expertise to know the proper value. Enforces make sure that all parties to an exchange play by the rules. By punishing those that break the rules, the enforcer can make certain that foul play is not costless. The risk bearer can handle the risky side of the business more than any individual can. Having the ability to diversify revenue streams, the risk bearer can survive when losing money from some sources due to profits from others. A concierge can tailor information to best fit the client. Having access to the same information does not mean the same value can be extracted by different people, the concierge listens to the client and helps them find the appropriate thing for them. The insulator takes away the pressure of being seen inappropriate. Representing oneself has different social connotation then representing someone else, the insulator levels the power relationship between the parties without damaging either parties’ reputation.
The focus of the book is when the middleman provides more value than the expense, while sparse information in given to why some middleman fail. In the introductory chapter, the author provides the potential view of middleman that depend on their ability to get things done to the value they extract. The major problem is the insufficient explanation of why some middleman are seen in the negative relative to the values they are meant to provide. Some sporadic examples are provided when middleman is notorious for the poor job done, but they lack depth. Understanding what makes a bad middleman in detail would have helped a lot in explaining what mistakes not to make. There is a lot of value in knowing what not do to.
Extremely well written and research from different fields are used such as economics, game theory, psychology, and sociology. The technical parts are fun to read. Even though examples of middleman doing a poor job are pervasive, a chapter or two on the failures of the middleman would have provided a lot of value.… (plus d'informations)

The bad news is the internet has not eliminated the middleman as predicted. The good news is the internet has not eliminated the middleman as predicted. The Middleman Economy details how middlemen have not only survived, but are thriving.

Krakovsky’s great service is to have sliced middlemen into six new categories: the bridge, the certifier, the enforcer, the risk bearer, the concierge and the insulator. The names are wonderfully and accurately descriptive. You can pretty much figure out exactly how each differs. None of them is new or unique because of the internet, but categorizing and classifying them gives new insight into how the world has always worked. That, and the succinct, broad definition she got from one of her interviewees: Middlemen connect nodes on a network that increases the value of the network. That summarizes the great and real value of The Middleman Economy.

Each kind of middleman gets a chapter, and a great deal of description of how they operate in their specialty. Too much, in fact. The book is so micro there is no examination at all of how this plays out in the economy, as one might expect from the title. Are any of these categories trending up or down? How has the internet shifted the mix? What portion of GDP can we attribute to middlemen? Can an economy be improved with a refocusing, encouragement, or discouragement of various kinds of middlemen? Can we learn from economies which encourage middlemen compared to those that discourage them? Krakovsky addresses none of the macroeconomic aspects. She is all about descriptions of individuals in their day to day work. She persists way too long after the reader has understood exactly what is happening.

This effort is valid and valuable, but it should be taken to a much more economically significant level to make a real difference.

David Wineberg… (plus d'informations)