Tuesday, March 24, 2009

The return of the middleman

(Blogger failed to post this week's piece automatically in my absence. To my regular readers I apologize for the delay in posting.)

The middleman has gotten a terrible name.

Not too long ago I attended a meeting on food policy where I heard sharp comments about the negative role of middlemen. One farmer wanted a better and closer relationship with her customers and felt that the current system was working against her and against the very survivability of the small farm.

In this she is correct. The vast agribusinesses which now dominate our food economy tend to lock farmer and consumer alike into a system that forces high-cost inputs on farmers while giving them low prices for their produce and that pushes poisoned, unhealthy and overly packaged foods on the public.

But there are many different kinds of middlemen. Unfortunately, they have all been lumped together through years of advertising by companies that claim they have eliminated the middleman and so can bring you large savings. But the process by which those middlemen were eliminated and the effects of that process are rarely discussed.

Yes, it's true that costs for manufactured goods have come down greatly in the globalized economy. The giant retailers that include Wal-Mart and Costco have abetted the export of manufacturing to the Far East in a game of labor arbitrage that pits workers around the world against each other. But lower wages and lax labor rights and safety laws haven't been the only lure. Weak environmental laws have also made it cheaper to manufacture products in developing countries.

All of this is well known by those who've watch the process evolve. But perhaps less well-understood is the destruction of the dense network of "middlemen" who used to make up the bulk of the leadership in our communities. (Here I borrow generously from the thinking of James Howard Kunstler.) The man or woman who ran the local hardware store before it was obliterated by Home Depot was a "middleman." The man or woman who ran the local bookstore before it was obliterated by Barnes & Noble was a "middleman." The man or woman who ran the local grocery before it was bankrupted by Wal-Mart was a "middleman." These middlemen (and middlewomen) tended to be connected to a more regional or at least national supply network.

They were contributors to the softball league, the symphony and the school play. They sat on the city council, the school board and the county commission. They raised money for local charities and building projects.

Today, they've been replaced largely by minimum-wage clerks who know little about what they are selling and have difficulty meeting their own needs let alone making substantial contributions to the communities in which they live. It's not their fault. It's our fault for acquiescing to such a system--for being seduced by the lure of cheap prices without understanding the collateral damage we were inflicting on our communities.

But now as the globalized economy withers--never to return in its present form in my view--we are bereft of that dense network of local shopowners, brokers of all kinds of goods, hometown bankers, small equipment repairmen who can restore broken goods to useful work and so many others whom we will be needing in the future that is now unfolding.

Far from needing to eliminate the middleman, we are now going to be obliged to repopulate our communities with them for they were the glue that made our intricate regional and even national economies work. As we return to a more localized existence in the wake of a financial disaster brought on in part by energy stringency--stringency that is only temporarily in retreat--we have two related tasks ahead of us: First, to rebuild the network of middlemen that we will need for the future, and second, to rehabilitate the idea of the middlemen through both words that elevate their role and deeds that support their return to our communities.


Anonymous said...

Excellent post, Curt.

Each time I hear "we eliminate the middleman", I cringe. The middleman is simply another word for middle-class. Middlemen are one of the truest forms of capitalism. They take risks and closely interact with local consumers to know what products and services will satisfy their needs. If they are wrong about consumer needs/wants, they suffer the financial consequences. What's the alternative? Either the government or corporations dictate what we want, since we have no alternatives because those alternatives were financially non-viable and ceased to exist.

And lest we think that the corporations are doing a fine job, you need look no further than products like Welch's Aqua Juice: http://www.welchs.com/products/juices-and-drinks/livinglightly/aquajuice

Only a corporate entity could tell you they are saving you money and keeping costs down, while they turn around and sell you apple juice for the equivalent of $15.00 per gallon. Enjoy the $0.30 you saved from elimination of the middleman - you'll need it...

When huge corporations eliminate the middleman and "pass the savings on to you", it's at the expense of your neighbor who worked long hours providing excellent service and decades of knowledge at the hardware store or the guy down the street who managed the local grocery store that tried to stock quality local items from local farmers, rather than flavorless far-away food-like items.

It's easy to lament the situation, but rather than get down about how things are, I simply choose to buy locally so people in my community can continue to send their kids to college, pay their bills & property taxes and continue to build strong communities that are places worth living.

Anonymous said...

True, Kurt! I guess it depends on your definition of "middleman". Given yours, I agree. I've always thought of "middleman" in the negative - a person in between me and what I need (product or service) but offering little to no "value added" benefit to me. Probably because I've heard it used in this context more often than not!