In Praise Of Middlemen

Some weeks ago, I had mentioned my new-found friend, Bablu Das, the property dealer without property. He makes a living by dealing in titled properties in New Delhi’s Chittaranjan Park; while his own house is in Tughlaquabad, where they possess no titles. Hence my description of the man:

“Property dealer without property.”

What does this reveal about the nature of our political rulers? First, that despite all the big talk of socialist “equality,” official policies have actually worked the opposite way, making India a deeply stratified society. This is clear in New Delhi itself:

First Class: Lutyens’ Bungalow Zome

Second Class: Outside LBZ but possessed of property titles.

Third Class: No property titles, no postal address, no sewage lines etc.

Fourth Class: Village India, no titles.

Fifth Class: Forested India, no property at all.

And so on and so forth.

Quite frankly, instead of all the “reservations” for the lower castes and the forest-dwellers, I would much prefer to build an Urban India where everyone lives FIRST CLASS – where all properties have titles, postal addresses, sewage lines… everything. This is not difficult to achieve. And it will yield far more for all our poor people than all reservations put together.

But we were talking about Bablu Das.

Well, the other day, a friend made some inquiries about properties in my area and, looking for answers, I naturally turned to my friend Bablu, who happily obliged. When I relayed the information to my friend, I was asked how I had come by this knowledge. When I responded that a property dealer had told me this, I was told to stay clear of such types. My well-meaning friend seemed to dislike property dealers in general. Perhaps she disliked all “middlemen” – as our school and college education had taught us to. I then set about thinking of a killing argument in favour of Bablu Das, to convince my friend that he and others like him were useful members of the commonwealth. This proved to be quite easy.

The other day, Bablu Das told me a sad story. He spoke of how he had shown a difficult client 8 houses, but she was still not satisfied. He said that he would show her 4 more, and then give up altogether. Drove the point home: That property dealers like him take great pains to ensure that their clients get satisfaction. You could, of course, try to acquire property without going through such dealers, but it is anyone’s guess whether you would be better off doing so.

My friend did not like the fact that property dealers charge commissions – that too, from both sides. Huge racket, she thought. But the fact is that these “transaction costs” are “good costs” – in that they make for a better outcome. If you pay these transaction costs, you are likely to be better off.

The same is true of all middlemen.