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Wednesday, November 18, 2009

A Nation of Middlemen

I had an amusing conversation with one of my coworkers at my most recent job. He said "I have a friend who started a wallet manufacturing business. He's selling 'Faraday cage wallets', to protect your ID cards from broadcasting information. Starting a business is hard!"

I said "Oh, he makes wallets?" My coworker replied "No, he hires a factory in China to make them for him."

I gave my coworker a hard time about "Why doesn't he make the wallets himself?" The reply was "Do you really expect him to sit around sewing wallets all day? Why hire someone at $10+/hour to make wallets when you can hire someone in China for $1/hour?"

The details of the business were amusing:

  1. He doesn't manufacture the wallets himself. He outsources that.
  2. He hired a lawyer and filed for a patent on his wallet design. The idea of making a "Faraday cage wallet" was not his idea. However, he owns a patent!
  3. He signed agreements with a bunch of online stores to sell his wallets and carry them in their inventory. He doesn't have his own store.
The guy's business is nothing! He's just a middleman! He doesn't make the wallets! He doesn't sell the wallets! He does nothing!

He does own a patent, but that's only due to a defect in the legal/patent system and not that it was his original idea. Intellectual property is not a valid form of property. In patent law, "first to file a patent!" isn't the same as "person who came up with the idea!"

The USA is a nation of middlemen. Nobody's actually interesting in building something. The guy who actually does the real work is a sucker and a fool.


Anonymous said...

I don't really see your point, except I'm surprised he was able to get a patent. I've heard of these types of wallets for a few years now.

theftthroughinflation said...

" don't really see your point"

His point is that the wallet dealer is contributing nothing to society. He does not make the wallets, he doesn't retail them and he didn't even think of them. If wallets cost 1$ to make during manufacturing and this guy sells them to a retailer for 2$ each and they sell it to the public for 3$ each then the price is wastefully inflated for no reason!
people in NA don't create anything! We are an economy of middlemen...which seems to work for now but when the consumers and producers realize that we don't offer a valuable service we will have no role.

Anonymous said...

Welcome to Marxism!

So, middlemen create no value, huh?
Should we all go and man the factories and fields?

I agree with FSK on one thing, however, there is no place for intellectual property patenting. It can exist, only in one form, as a "trade secret". Once you let it out, you have no claim to it.

But, consider also, that the guy can't hire 5$ workers, that's illegal! Say thanks to a welfare state, when you realize what is going on, and why China has a guaranteed income.

theftthroughinflation said...

I'm not saying we should man the fields or the factory. I'm saying we should be producing ourselves or directly retailing products from the producer, the middleman syndrome is wasteful and not sustainable. Its one thing if a wallet inventor has no manufacturing capabilities and no sales skills to sell the royalties for the initial release, its another for someone with none of the above skills to make profit off of neither inventing or manufacturing or retailing. In a free market economy he would be undercut by retailers who would buy directly from the factories and undercut the competion because they dont have to pay a middleman. When the rest of the world wakes up to north america's middleman syndrome we will get shafted.

As far as china goes that is a a special case. Communist regiemes have a surplus of people who have nothing to do, in the past they would be killed in wars or gulags or worked to death. China realized they could sell out their people to the west and profit off of their labour by recieving money to keep the people oppressed. I wrote more about that idea on my blog:

Anonymous said...

Perhaps we should consider small software companies as middlemen.

Computers and development software are relatively cheap.

There is nothing a company can't do, that a few friends can't do.

The workers need to throw off the clowns that employ them c.f. FSK's previous posts on getting fired and the lack of respect given to software developers.

An additional point is that today:

1) Supposedly permanent jobs are really short-term - they last between 1 - 3 years

2) Employers don't give time for training or self-training

3) A decent wage becomes less decent when there are constant periods of unemployment

Companies now act as middlemen that don't want to put anything into the system (i.e. training and jobs that actually last for years). They just want pre-trained short-term labor that can be turned off and on like a tap.

Chrono said...

LOL...the producers and consumers will not ever realize this fact. Ask yourself a question. When and how did you realize the economy seldom adds any real value to the inflated prices you pay for goods?

From my experience, I did not realize this from interacting with my pro-state troll fellow slaves, nor did I learn this in any state-sponsored school. In fact I learned the opposite in school. So what do you suppose will cause these people to 'realize'?

If people ever realized it, Atlas would have already shrugged. But there's an interesting twist to this. In a way...he did.

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