"Bill Gates has been right about a lot of things over the years - Microsoft, mosquito nets, the risk of pandemics. One thing he was not so right about: the idea that the internet would cut out the economy's middlemen. In his 1995 book "The Road Ahead," Gates predicted that the information highway would "extend the electronic marketplace and make it the ultimate go-between," leading to a scenario where the only humans often involved in a transaction would be the actual buyer and seller."
"Middlemen are a necessary evil in many parts of the modern economy. Supply chains are increasingly complex, so someone has to manage coordination and logistics. Consumers demand convenience, which middlemen provide. Suppliers don't have a choice - they have to go where the people are, even if that means signing up for a delivery app or e-commerce platform that gives them a raw deal."
"The problem with middlemen isn't their existence. If I'm in the mood for chicken for dinner, I don't want to drive out to the chicken farm to pick a little guy out - that would take a lot of time, and I am not an expert in what makes a good chicken. I want to be able to go buy it from the grocery store,"
Bill Gates predicted the internet would eliminate middlemen, but the internet instead spawned powerful new intermediaries such as Amazon, Uber, and DoorDash. These intermediaries connect buyers and sellers while extracting fees and controlling access. Complex supply chains and consumer demand for convenience make intermediaries necessary in many industries. Suppliers often must join dominant platforms and accept unfavorable terms. The resulting economy concentrates power in intermediaries that coordinate logistics, set tolls, and extract value away from producers and consumers. The core issue is the dominance and rent-extracting behavior of some intermediaries, not the existence of middlemen themselves.
Read at Business Insider
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