middlemen are not superfluous

I am starting to think differently about many businesses which I previously considered superfluous, because you know, we can do without them. Now I see that even though we technically can it is often too impractical for us to do. So if not for these middlemen almost no one would have been doing that. But I see that I'm getting too abstract, let me give you some examples.

The recent case which is the cause of this post was about giving away a trainer machine. I have put it on KleinAnzeigen and after just a few minutes was contacted by some Kostana, and the trainer was picked up half a hour later. The fishy part here is that the trainer is for women and Kostana seems to be a female name, but the picking up was done by a couple of guys. And they asked if I am giving away something else. Looks like they were junkmen collecting all the available free stuff to sell it later. Somehow I have always considered this a bad thing to do. I want to give something to someone who would put it to use, but these guys are just middlemen making profit on free stuff. But this time I thought: I succeded in getting rid of unused trainer, it was quick and very convenient for me (only a few previous giveaways were that smooth), and these people made their living instead of taking my taxes through welfare. What's not to like?!

Another case is the business of collecting old clothes via these marked containers in all parts of city. These companies sort the collected textiles, recycle the worst parts into heat insulation, send the average quality things to charities, and sell the best pieces in "second hands". A common first reaction is something like: "The bastards! Pretend to be charitable to get free stuff and then make a profit of it." Well, they do charity, and if not for them you wouldn't likely do recycling or donating yourself.

Yet another example is quite banal but it became even more obvious to me when applied to small international trade. People in USSR didn't like "speculators": if you are buying cheap and selling expensively you are a fraud! Well, the guy is selling not only the thing but also his service of delivery. You still have the option to contact the manufacturer, agree on the delivery to your country, accept the risks of poor quality of postal service of third world countries, wait a couple of months until the goods arrive. Or you can pay the middleman a bit more to skip the waiting and risks.

Same goes for credits and investments. Why would anyone need a credit in the bank if you can just borrow from a wealthy neighbour some money to start your business. But when you are that neighbour you start thinking. How well do I know this guy? What are the chances his business will make it? What is the chance that the guy won't be able to pay back? What do I do if he just plainly refuses? Maybe I can find a better use for this money? Do I have a time to analyse that? Uhm, I guess I'd pass. There are people who professionally answer questions like these. And the interest from multiple credits safeguards them from occasional bankrupcies. That also applies to investing in currencies or stocks: of course you can do that yourself, but honestly do you have time and brains to do that right?

I won't argue that middlemen are perfect and infallible. But now I rather think this system is mostly good with some flaws, and don't rail at it anymore.

Артемий Трегубенко,

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