Having followed the middleman from his most honest service to his purest extraction, the volume turns, in its penultimate plate, to the oldest wish that has ever been directed at him: the wish to be rid of him altogether. If the middleman takes a cut, and if that cut is sometimes the rent of a position rather than the wage of a service, then why not simply remove him — let the buyer and the seller, the saver and the borrower, meet face to face without the one who stands between, and keep for themselves the cut he has always taken? This is the dream of disintermediation, and it is among the most persistent dreams in the history of commerce, renewed with every technology that has ever promised to bring the two sides closer. It is also among the most reliably disappointed. For the middleman, it turns out, is uncommonly hard to be rid of; expelled in one form, he returns in another; and the long record of the attempts to dispense with him, read with attention, turns out to be not a record of his obsolescence but the strongest testimony there is to the reality of what he does. This plate reads that record, and finds in the failure of disintermediation the proof of the thesis the whole volume has been building: that the middleman, for all the suspicion he draws, mostly earns his keep — for the simple reason that, mostly, he cannot be done without.
The dream has been dreamed in every generation, each time in the language of its newest invention. The telegraph and the telephone were to let buyers and sellers speak directly across distances, and so dissolve the brokers who had bridged those distances for a fee. The mail-order catalogue was to carry the manufacturer's goods straight to the customer's door, cutting out the shopkeeper. The internet, most grandly of all, was to be the death of the middleman entire: with every buyer able to find every seller directly, the wholesalers and retailers and travel agents and stockbrokers who had stood between them would be swept away, their margins returned to the principals who had paid them, and a great frictionless marketplace would arise in which the two sides met without intercession. The forecasters of the nineteen-nineties wrote of the death of distance and the end of the intermediary as settled conclusions. And after the internet came the ledger that needed no trust, with the boldest promise yet: that value could pass directly from one party to another with no bank, no clearinghouse, no trusted third party of any kind, the middleman abolished not merely from this market or that but from the very architecture of exchange. Each of these technologies was real, and each genuinely changed the terms on which the two sides could meet. And each was greeted, by its enthusiasts, as the long-awaited instrument that would finally cut the middleman clean out.
What happened instead, with a regularity that ought by now to be expected, was that the middleman was not eliminated but replaced — and replaced, very often, by a larger one. The internet did not abolish the intermediary; it bred the platforms, the greatest intermediaries the world has ever known, which now stand between buyers and sellers more massively, and take their cut more surely, than the retailers they displaced. The travel agent was indeed swept away, and in his place rose the booking platform, an intermediary of incomparably greater reach and power. The classified advertisement was disintermediated, and the marketplace platform took its ground. The ledger that was to abolish the trusted third party bred exchanges and custodians and wallet-keepers who became trusted third parties of exactly the old kind, only newer and, as a season of spectacular collapses has shown, frequently less trustworthy than the banks they were meant to shame. This is re-intermediation, the predictable sequel to every disintermediation: the old middleman falls, the new one rises, and the cut, far from being returned to the two sides, is merely collected by a different hand. The forecasters who announced the end of the intermediary had a counterpart, less heard at the time, who predicted precisely this — that the network would not abolish the middleman but breed new species of him, fitted to the new terrain — and it is the counterpart who has been proved right, again and again, in every arena where the dream of disintermediation has been pursued.
Expelled in one form, the middleman returns in another, and often a larger: the internet that was to be his death bred the platforms, the greatest intermediaries the world has ever known.
The reason the middleman cannot be eliminated is the burden of every prior plate in this volume, gathered now into a single principle: that the middleman's cut is mostly the wage of functions that are real, and that real functions do not vanish when the man performing them is dismissed — they must still be performed, and whoever performs them becomes the new middleman. The two sides must still be brought together; someone must do the matching. They must still be given reason to trust one another; someone must do the vouching. The risk of the thing must still be borne while it changes hands; someone must do the bearing. The borrower must still be watched, the prices must still be reconciled, the immediacy must still be supplied. These are not incidental services that a clever technology can wish away; they are the irreducible work of making exchange possible between parties who are distant, or mistrustful, or mismatched in what they want and when, and they are required whether or not any particular middleman survives to perform them. A technology that genuinely lowers the cost of these functions does a real and valuable thing — but it does not abolish the functions, and so it does not abolish the middleman; it merely hands his work to a new performer, who, because the work is valuable, will be paid for it, and who is therefore a middleman by another name. To cut out the middleman, one would have to cut out his function; and the function cannot be cut out, because it is the very thing that makes the exchange go.
None of this means that disintermediation is empty, a pure illusion that changes nothing; it means that its real achievement is not the one its rhetoric promises. What disintermediation actually does, when it works, is two things. The first and commonest is that it disciplines the middleman: by handing his function to a cheaper performer, it thins his cut. The discount broker who charged a fraction of the full-service commission, the index fund that did the work of the active manager for a tenth of the fee, the online marketplace that collapsed a chain of wholesalers into a single efficient layer — these are real and great achievements, and they are achievements of disintermediation, but what they achieved was not the elimination of the middleman; it was his replacement by a leaner one, the wide spread narrowed, the bloated commission cut down toward the cost of the service actually rendered. This is disintermediation's true and considerable power: not to abolish the cut but to discipline it, to press it down toward the real cost of the function and squeeze out whatever toll had swollen it. And there is a second thing it can do, rarer but cleaner, which is to deliver exactly what the dream promised in the one case where the dream is achievable: the case of the pure toll. Where the middleman was the rentier of the passage and nothing more, where his cut was all levy and no service, there is no function to return when he is removed — and a technology that routes around his chokepoint simply ends him, and gives the cut back to the two sides, as the dream foretold. The pure parasite, and only the pure parasite, can be truly cut out.
The dream of abolishing the middleman resolves, in practice, into the discipline of him — the wide spread narrowed, the bloated commission cut down; only the pure toll, which has no function to return, can be cut out entire.
And here disintermediation reveals itself as something more than a recurring episode in commercial history: it is the volume's seam made operational, the very test that distinguishes the wage from the toll. For consider what the outcome of an attempt at disintermediation tells you about the cut that was removed. If the middleman is cut out and nothing is lost — if the two sides go on meeting as well as before, and keep the cut between them — then the cut was toll: there was no function in it, its removal costs nothing, and the suspicion of the parasite was, in that case, correct. But if the middleman is cut out and the exchange falters — if the two sides can no longer find or trust or pay one another, or if a new middleman must at once arise to do what the old one did — then the cut was wage: there was a real function in it, which someone must still perform and be paid for. Disintermediation is thus the experiment that the volume's whole question has been waiting for, the operation that sorts the earned cut from the extracted one by the simple criterion of what happens when you try to remove it. The dream of total disintermediation is, in this light, the dream of a world in which every cut is pure toll, so that every middleman can be cut out and every cut reclaimed; and the persistent failure of that dream is the discovery that the world is not like that — that most cuts are wage, most functions real, and most middlemen, therefore, ineliminable, removable only at the price of summoning their replacements.
The verdict of this plate, then, inverts the dream it examines. The centuries-long record of disintermediation's disappointments, which might seem a record of repeated failure, is in truth the strongest single piece of evidence the volume can offer for its central claim. The middleman has been the object of suspicion in every age, and in every age some new instrument has promised to expose him as the dispensable parasite the suspicion holds him to be — and in every age the instrument has failed to dispense with him, succeeding only in replacing him or in thinning his cut. If the middleman were what the oldest charge says he is, a parasite who merely levies and performs no function, then he could be removed at will, and the long history of trying would be a history of success. That it is instead a history of his stubborn return is the plainest demonstration that he is mostly not a parasite — that his cut is mostly the wage of a function real enough that it must be performed by someone, and that the someone must be paid. The cases where disintermediation does succeed are precious for exactly this reason: they identify, with an experimental cleanness no argument could match, the genuine tolls — the middlemen who really could be cut out, because there was nothing in their cut but levy. So disintermediation does not refute the volume; it confirms it, sorting the wage from the toll by the test of removal, and finding, in the great preponderance of cases, that the cut survives every attempt to reclaim it because the function survives, and the function survives because it is real.
Disintermediation, then, is the standing dream of a world without the middleman and the standing proof that there can be no such world — that the most one can do is change him, discipline him, thin his cut, and, in the single clean case of the pure toll, be rid of him outright. The middleman is not an accident of commerce to be engineered away but a permanent feature of it, the bearer of functions that exchange between distant or mistrustful or mismatched parties cannot do without; and the suspicion that has dogged him through every age, while right about the toll, is wrong about the man, who mostly earns the cut he takes by doing the work that someone must. There remains one question that disintermediation cannot escape, and it is the question to which the bridge from this plate runs. If the two sides are to meet without a middleman, something must still bind them to their bargain — must hold the seller to deliver and the buyer to pay, across the distance and the mistrust that the middleman used to bridge. That something is the contract; and the contract, examined, proves to need writing, and trusting, and above all enforcing, and the enforcement of a contract is a third party standing between the two to make them keep their word — which is the middleman, returned in the last and subtlest of all his disguises. The volume's final plate now remains, and to it falls the task the whole work has been preparing: to draw, as well as it can be drawn, the line between the middleman who earns his cut and the one who merely levies it — the line, never quite where either side claims it lies, between creation and toll. As the table says of every price, first to last: the argument remains open.