No The Internet Doesn't Do Away With Middlemen — It Just Changes Their Role
from the enablers,-not-gatekeeprs dept
There’s an idea that’s been popular for a while that the internet somehow does away with “middlemen.” A perfect example of this is NY Times’ Damon Darlin acting surprised at a new middleman business delivering food to various companies from various food trucks and chefs:
Hold on, though, wasn?t that a job description that the Internet was destroying? There was even a 25-cent word for it: disintermediation. The Web, we were told, was eliminating the need for the layers of brokers, agents, wholesalers and even retailers that separate the consumer from the producer.
It’s time for this argument to go away. We’ve been arguing for a while that the internet doesn’t kill middlemen, it just changes what kind of middlemen you need. It gets rid of gatekeepers, but replaces them with enablers. There’s still a tremendous role for middlemen operations that enable buyers and sellers to do more. But there’s no role for someone acting as a “gatekeeper” that blocks what buyers and sellers can do. Of course, gatekeepers hate this, because when they were gatekeepers they were the central player (and could charge monopoly rents). But enablers are not central. They’re there to help the really important players: the buyers and the sellers. And there just aren’t the same monopoly rents. Such is life in modern society. But, let’s drop this claim that middlemen are going away, and admit to the reality: it’s just the gatekeepers that go away.