Limiting Leakage and Lemons
By Amy Willis
How do middlemen emerge, and what value do they create in the economy? Who isn’t a middleman, and why do they seem to suffer such disdain? In this week’s episode, EconTalk host Russ Roberts chats with Marina Krakovsky about her new book, The Middleman Economy.
Now it’s your turn. Use the prompts below to help us keep thinking about the episode and continue the conversation. As always, we love to hear from you.
1. In the very beginning of the conversation, Krakovsky notes, “No one likes a middleman, but most of us are middlemen.” By the end of the conversation, she’s identified six roles for middlemen: bridge, certifier, enforcer, risk-bearer, concierge, and insulator. Does your work fit one of these types? Which of these middlemen stand out for their usefulness in your own life?2. In their discussion of Open Table, Krakovsky and Roberts discuss why restaurants (generally) don’t charge a fee or a deposit on reservations, like hotels do, for example. What do you think the cultural norm is behind this phenomenon? How likely is it that you think this norm will soon change?
3. Both Roberts and Krakovsky emphasize the “soft skills” of [human] middlemen. Is anyone who makes their living by employing “soft skills” to be considered a middleman? Or, who then is not a middleman? Explain.
Extra Credit: If you go through the EconTalk archives, you’ll find an episode in which Roberts spoke with a famous insulator. Who was it? How does this individual illustrate the insulator role? Is this the sort of middleman you love or hate? (P.S. We’d like to share some of these responses…and we’ve got a pile of books that need homes…)