Agents are not exposed to windfall gains or losses because they do not own anything.
They just help facilitate the meeting of the seller and the buyer. i.e. the meeting of the producer and the consumer.
And because of these characteristics, Agent Businesses are more sustainable in nature than Producer businesses.
Agents own the consumers.
As it is said in the business world, “instead of building the world’s best mouse trap and hoping everyone make a queue outside your garage to buy it from you, gather all the people in the world with the problem of too many mice and you will eventually have multiple great mouse trap inventors with you and a lot of buyers as well.”
Agents are also at the top of the information hierarchy. And they are flexible because of no fixed assets.
Starting from the politicians who are agents of power to every single work that happens in India, everything has an agent.
DIYs vs. Agent Countries.
Countries with Low vs High Trust && Low vs High Dignity of Labour.
Because India is a low trust country + a country with low dignity of labour, this will always be a AGENT country vs a country like USA where the trust is high and dignity of labour is high, hence it is a DIY country.
There is a agent for every single thing in India:
- Government work? Agent.
- Buy sell rent Land / RE? Agent.
- Banking? Agent.
- Travel? Agent.
- Education Admission? Agents.
- Looking to get married? Agents will bring you matches.
- Looking to sell your produce as a farmer? Agents.
- Insurance? Agent.
- Got robbed? Agent to make the police work!
- Want some extra justice? Agent to make the judges work in your favour!
Think about getting any work done in India and you can think about an agent who you need to mediate to get the work done.
Not only that, it has become so that you HAVE to use these agents.
Even If you want directly to the end party (or end point), you still have to pay these agents most of the times.
Meaning, these Agents are monopolizing their services aka they are building Tolls to these services.
For example:
Let’s say I want to get some government permits. It is generally done through some set of Agents. But I want to get it done myself without paying anything to agents because I think the agent services are overpriced.
As a free citizen, I am free to get it done myself.
But they won’t do it until you pay one of their agents. They will make you experience hell. They won’t say NO. They won’t say Yes. They will keep you hanging until you come to senses and pay up.
Now is this the fault of the government officials alone? I used to think so. But after tons and tons of research and trying to dig deeper and trying to know the truth, there was more to it.
Even government posts are very much highly valued in India because of the fixed and risk free cash flow and almost nil probability of getting fired.
And of course there are agents who will help you get government jobs or help you crack the exams or help you get the leaked papers. All you need to do is pay.
If you are a DIY person, you hate this culture. You want to move to a better culture as soon as possible.
But there is another way.
To accept the reality and adapt to this culture.
To be a flexible business that acts as a producer when producers are scarce and act as an agent when producers are available in oversupply.
Agents have their own features.
Agents are mini marketplaces. They own the customers and hence they own the suppliers.
It’s like “the bar that is preferred by most girls is automatically also the most preferred bar of the boys” “supply goes where the demand is”.
And agents are preferred by customers (in cases where agents haven’t monopolized themselves) is because Agents help customers find the best offers after getting prices from all the sellers.
To summarize, Agents in India have special powers:
- They are at the top of the information hierarchy.
- They own the demand (customers) and hence own the supply (producers).
- Agents have no or low fixed costs and hence are never affected by windfall gains or losses.
- Agents built tolls on roads they do not own and collect taxes for themselves and for those in power. (hence being the face of all the dirty work).
But because of this nature of agent culture, there is a very specific type of Price Discrimination at play in India:
“Upside Down Price Discrimination” – In normal price discrimination, richer the consumer, higher the prices.
But India is different.
Here, the richer (in financial or social capital / political power) the consumer, the agents charge them lower and lower fees. Because the richer or more powerful I am, I am in less need of these agents to influence the officials in an government office or anywhere else.
Now do this on a scale large enough and for a time long enough, what you get is a skewed wealth distribution.
But this Agent culture is not going anywhere. For better or worse.
But something needs to be done to help negate the effects of monopolization of such basic services.
To begin with, I want to publish the known rates charged by agents for all basic type of government services for every district in our country.
Therefore, to start getting the data for this project, we are looking to appoint a volunteer for every district who will be awarded with the title of “Superr Head of District” for their district.
I have worked the last 4 years to understand that this Agent culture cannot be terminated or acted against if you want to make any progress in business in India so I have decided to work with them instead and work towards bringing transparency as a step one.
As we cannot do away with the evils of this Agency Culture, let’s become the Agent of Agents.