Skip to main content

The Emergence of Intermediaries in the Economy and the Value of Direct Transactions

Kathryn Judge’s latest book, “Direct,” delves into the burgeoning issue of the intermediary-driven economy. As a Columbia University law professor, Judge critically examines the hidden and explicit costs that consumers incur in this intermediary-laden market.

The focus of her critique is the digital and e-commerce platforms that serve as intermediaries – wholesalers, retailers, and brokers – between consumers and the products or services they purchase. These intermediaries have gained prominence due to global demand and complex supply chains. While Judge acknowledges their necessity, she cautions against the over-reliance on global intermediaries, highlighting the overlooked advantages of local and direct economies.

Judge argues that the qualities making intermediaries efficient connectors also grant them disproportionate influence. Over time, they grow their domains, entrench their necessity, manipulate consumer choices, and advance their interests, often at the expense of those they should serve.

She points out the escalating costs associated with intermediaries, evident in unexpected areas like real estate. For Judge, however, the implications extend beyond financial risks to the erosion of direct exchange’s integrity. She attributes issues like loneliness and a decline in “human flourishing” to dominant intermediaries.

Drawing from a diverse array of sources, including academic journals, government reports, and public writings from community-supported agriculture (CSA) groups, Judge offers a well-researched perspective. Her argument gains depth when juxtaposing personal experiences, like comparing CSA purchases to big-box store shopping, advocating for local commerce.

Judge discusses the evolution of e-commerce into a domain where few large players exert significant control, often to the detriment of smaller competitors and consumers. She illustrates how large intermediaries and extended supply chains are interconnected, each reinforcing the other, leading to even larger intermediaries and more complex supply chains.

She critiques the structure of the middleman economy, exemplified by companies like Wal-Mart, which have grown into self-contained economies. Judge criticizes large entities, including financial institutions and e-commerce giants, for their role in perpetuating this system, often at the expense of smaller competitors and consumer welfare.

The book ultimately prompts readers to reflect on the human values inherent in direct transactions. Judge proposes ways to support local businesses and boutique ventures, arguing that direct commerce nurtures community bonds and fosters a fairer, more resilient, and accountable economic system. “Direct” serves as a poignant reminder of the hidden costs in minor conveniences and the substantial human benefits of local purchasing.