Review of the book “Direct: The Rise of the Middleman Economy and the Power of Going to the Source

Consumers do not only pay for products, but also for middlemen who, over the past 30 years, have built retail empires capable of transporting goods to all corners of the world, which led to transforming the economy and life.

Kathryn Judge, Professor of Law at Columbia University, highlighted in her book “Direct: The Rise of the Middleman Economy and the Power of Going to the Source” both the hidden and overt costs that consumers pay in what she calls the middleman economy.

Although in some ways middlemen are needed, her warning is clear: habituating ourselves to buying from global intermediaries has blinded us to the benefits of more intimate and local economies.
 

The very attributes that make middlemen good connectors also give them outsized power. In time, this enables them to expand their domains, entrench the need for their services, contort consumer decision making, and otherwise promote their interests at the expense of those they are meant to serve.
 

The costs of middlemen are multiplying, and appearing in places where we might not expect, including higher fees paid to realtors for house sales. But for Judge, costs go beyond mere economic hazards and represent an artificial intermediary that diminishes the integrity of direct exchange. In more forceful passages, she charges the most dominant intermediaries with contributing to loneliness, isolation, and lack of “human flourishing” around the world.   
 

Judge, whose academic work shows a keen interest in finance and regulation, writes in a clear and insightful voice, drawing meticulously from academic journals and sources that include reports from the US Department of Agriculture, research from the National Bureau of Economic Research and the US Federal Reserve, as well as detailed accounts from the public writings of members of community supported agriculture (CSA) groups, which allow consumers to buy directly from local farmers.

Judge also frequently taps personal experience, comparing the process of buying fresh produce as a CSA member to purchasing similar items at a big box store. Such examples give her argument traction while revealing her bias for local (aka direct) commerce.

In one example, drawing from sources like Charles Fishman’s brilliant book The Wal-Mart Effect, the author tracks how the retail giant has morphed from a major player in retailing to an economy unto itself, in part because the company has leveraged unique strengths into next-level advantages like upselling, retention, and customer intelligence.

The author strongly criticizes e-commerce heavyweights, who use their dominant market positions to undercut competitors on price and lure customers with conveniences like free shipping.
 

Ultimately, the reader is challenged to consider the human values that direct purchasing can provide. Judge offers numerous examples of ways that consumers can buy directly from local institutions and boutique ventures (consider your local bookseller!).
 

Judge believes that direct exchange fosters connection and community while promoting a more just, resilient, and accountable economic system.
 

Source: Strategy+Business, Amazon