Middlemen Rule the Economy and We Let Them

We love to complain about middlemen. They’re the ones we think jack up prices, slow things down, and wedge themselves between us and the stuff we want. But here’s the truth: middlemen are everywhere, and the modern economy doesn’t just tolerate them—it’s built around them. We may talk about cutting them out, but what we’ve really done is replace small middlemen with bigger, more powerful ones. Think about companies like Uber, Amazon, or Honey. They promise simplicity, but they’ve become juggernauts—middlemen on steroids. They don’t just facilitate transactions. They control compliance, streamline payments, manage supply chains, and collect a mountain of data. That’s a whole new level of power. Middlemen used to be logistics experts or regional wholesalers. Now they’re data-driven machines with lobbying power.

The dream of cutting them out isn’t new. Direct-to-consumer startups like Casper, Bonobos, and Everlane tried to sell us on a clean, no-middleman future. But most of them failed or sold out. Why? Because building your own supply chain is hard, expensive, and inefficient. Turns out middlemen know what they’re doing. They’ve been at this for decades, and they’re good at it. Even worse, when DTC brands try to scale, they end up creating their own middlemen—third-party logistics, affiliate marketers, warehousing partners. It’s a cycle. You can’t build a scalable business without someone in the middle.

And sometimes, the middlemen don’t just take a cut—they take advantage. Honey, the browser extension we thought was saving us money with coupon codes, was busted for scamming the system. They collected referral commissions even when they didn’t offer any real savings. It may have flown under the radar for a while, but when YouTubers found out they were being shortchanged on affiliate revenue, all hell broke loose. That’s the thing with scams—they only get attention when the scam hurts someone with a platform.

The structure of our economy has always leaned on middlemen. The Industrial Revolution created manufacturers, wholesalers, and retailers, each depending on the other to keep goods moving and cash flowing. But today’s supply chains are global, complex, and more reliant than ever on massive intermediaries. Walmart, for instance, integrates wholesale, retail, and data-driven logistics to outcompete almost everyone. Smaller businesses can’t match that scale.

Data is the new fuel. Companies like Amazon and Walmart don’t just use it—they weaponize it. They track what we buy, how often, when we browse, and what we hesitate on. That data powers everything from marketing to inventory control to pricing models. It’s how they keep costs low and margins high—and it’s why most smaller businesses can’t compete. Data isn’t just an advantage anymore; it’s the new middleman.

But it’s not just about logistics and sales. Regulations have created entire ecosystems of required middlemen. Take Visa and Mastercard—they exist because businesses can’t function without accepting plastic. Want to go cash-only? Good luck. Consumers expect convenience, and these companies charge a fee just to move money. And because they’re baked into our financial infrastructure, they’re basically untouchable. They’re not optional—they’re mandated.

Then there’s the H-1B visa system, which middlemen consulting firms have turned into a profit engine. They hire foreign workers at below-market wages, lock them into contracts, and rent them out to tech giants like Google and Meta. It’s outsourcing dressed up as domestic hiring. These workers don’t have leverage, and the big companies offload the legal risk to the consultants. Meanwhile, American workers, immigrants, and expats all lose in a rigged labor market.

What makes this worse? Lobbying. Middlemen aren’t just participants in the economy—they shape it. They push for rules that keep them relevant and push out competition. Regulations that seem harmless on the surface often have a hidden agenda: make compliance so complicated that only giants with teams of lawyers and data analysts can survive.

So what do we do about it? First, we stop pretending middlemen are going away. They’re not. But we can make the playing field fairer. That means tighter regulations, especially in industries where just a few firms control access—like finance, healthcare, and logistics. Visa and Mastercard should face the same scrutiny as tech monopolies. And industries run by private equity or asset managers? They need oversight too. Real competition depends on it.

The power of middlemen isn’t just an annoyance—it’s a structural challenge. The question is whether we have the will to rebuild a system that works for consumers, workers, and entrepreneurs—not just for the guys in the middle.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind