On Middlemen

I recently heard a very interesting podcast on EconTalk on the crucial role that middlemen play in the functioning of a modern economy. It made me want to go back and hear a related podcast with Mike Munger.

Marina Krakovsky, who was the guest on the recent episode, summarized some of her positions in her blog "In Defense of the Middleman".

One of the middlemen I interviewed, the micro-VC Mike Maples, Jr., put it well when he pointed out that in our highly connected world, “things and entities that accelerate connections are going to be more valuable.” This is why Maples is bullish on so many Internet businesses, having made early investments in Twitter, Lyft, and TaskRabbit, among others. “That’s what a middleman does,” Maples says: “They connect nodes in a network to increase the value of the network.”

The six primary roles of a middleman listed towards the end of the blog, and the numerous examples made me ponder for quite a while one why middlemen are so despised, when they provide such an important service.

Sorry, I am still pondering :).