Bitcoin Audible – Read_919
Frédéric Bastiat: The Unseen Role of Intermediaries
Host: Guy Swann
Date: December 7, 2025
Episode Overview
This episode explores the essential, often misunderstood, role of intermediaries—merchants, distributors, platforms, banks, etc.—in markets and society. Guided by Frédéric Bastiat’s 19th-century economic thought (as summarized by Ulrich Fromme), Guy Swann challenges the prevailing “anti-intermediary” attitude common in Bitcoin and broader tech circles. The discussion delves into why the goal isn’t to eliminate intermediaries but to strip them of abusive, controlling powers, using both historical and modern examples—especially within the context of Bitcoin and today's digital infrastructure.
Key Discussion Points & Insights
1. Setting the Stage: Why Intermediaries Matter
- Guy stresses Bitcoiners’ tendency to conflate the abuse of power by intermediaries (banks, big tech platforms) with the existence of intermediaries themselves.
- “We make this grave error of thinking that the goal is to end the banks… to build a world without intermediaries at all. And I think that is a fundamental error.” (03:05)
- Bastiat, a 19th-century economist, highlighted that socialists often argued for abolishing intermediaries, claiming only government should provide distribution—an error then, as now.
2. Bastiat’s Argument: The “Unseen” Value of Middlemen
- Bastiat’s famous wheat example: If the hungry in Paris need corn from Odessa, there are only three options: fetch it themselves (impossible), use market intermediaries, or rely on government central planning.
- “For 36 million citizens to go and fetch the corn… is a manifest impossibility.” (06:41)
- Bastiat shows only intermediaries—acting in their self-interest—can efficiently coordinate the necessary logistics, capital, and local knowledge for society to work.
- Centralized state distribution, in contrast, leads to corruption, injustice, and inefficiency.
- Quote:
“The more we examine these advanced schools, the more do we become convinced that there is but one thing at the root of ignorance: Proclaiming itself infallible and claiming despotism in the name of this infallibility.” (08:54)
3. Market Competition: Intermediaries’ Value Is Regulated By The Market
- Intermediaries are paid because their services produce value—purchasing, logistics, risk, storage—and competition drives them to provide higher quality at lower cost.
- “The profit made by intermediaries is therefore normal because their services contain in themselves the principle of remuneration.” (11:12)
- Competition naturally embeds consumer protection: profits can’t wildly exceed value, or new competitors will arise.
4. Modern Analogies: Platforms, Banks & Digital Intermediaries
- Guy draws a parallel to today’s digital intermediaries (Amazon, Facebook, Uber, Twitter, banks)—they became essential facilitators but morphed into network “owners,” accruing abusive power.
- “The platforms that these network owners… control the network… are kind of universally hated, even among quote unquote free market people. …The ultimate [are] the control and abuse intermediaries… the banks.” (14:14)
- The “get rid of all intermediaries” ethos in Bitcoin and tech is misguided because:
- Intermediation is necessary for complexity/scale.
- The real target should be minimizing the power to abuse, not eliminating the facilitator’s role.
5. Bitcoin Lightning, Nostr, and Decentralized Tech
- In decentralized systems like Bitcoin and Lightning:
- Intermediaries exist (LSPs, nodes, relays) but are minimized in power.
- Users can exit or swap intermediaries at negligible cost—eliminating control without eliminating the facilitating function.
- “It’s not a world where we got rid of intermediaries, it’s a world where we’ve detached the service… from any particular intermediary.” (20:10)
- On Lightning:
- LSPs (Lightning Service Providers) are “the future of a bank”—paid for facilitating liquidity but can’t censor/steal, and must compete.
- “They are intermediaries without being custodians… you are getting paid for that service… without ability to meaningfully abuse, corrupt, or stop transactions.” (27:39)
6. The Danger of Intermediaries Becoming Owners
- Guy describes a principal-agent problem: once intermediaries “own” the network/content, they stop needing to serve users well, becoming abusive.
- Example: Platform lock-in with Notion, Medium, Twitter—users lose data portability; content becomes imprisoned.
- “All my stuff is universal, reversible. …But so much of the web, so much of software has literally gone the opposite direction. …If you write an article on their platform, you can’t even export it…” (33:13–34:11)
- Audible as an example: platform takes 60% of revenue, leaving content creators with 40% collectively, due to network control.
- “They are no longer facilitators, they are owners.” (36:44)
7. The True Solution: Portability and Protocols over Platforms
- Guy’s prescription: keep intermediaries as facilitators only, not owners.
- Protocols (e.g., Lightning, Nostr, pubkey) sever the link between content/network and any one intermediary.
- “It puts them [intermediaries] in their proper place and isolates the one very critical job that they do to only that job and creates protocols for assessing and verifying everything else that they are delivering. Outside of needing them.” (29:28)
- The ideal: users can seamlessly leave/switch intermediaries; their content/funds/networks go with them.
8. Final Reflection & Bastiat’s Wisdom
- Summing up: Society must have intermediaries to scale, but their role should be limited and non-abusive.
- The greatest threat is when we mistake control for service—when intermediaries claim infallibility or ownership “in the name of” users.
- Bastiat quote (ending):
“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? …Do they believe that they themselves are made of a finer clay than the rest of mankind?” (43:29)
- Bastiat quote (ending):
Notable Quotes & Moments
-
(01:17) Guy Swann:
“They fail to distinguish the bad incentive or the very piece of control from the underlying structure that’s actually designed to produce value.”
-
(05:57) Bastiat (via Fromme):
“There are three means by which this contact [between stomach and corn] may be: first, the famished men may go themselves and fetch the corn. Second, they may leave this task to those to whose trade it belongs. Third, they may club together and give the office in charge to public functionaries.”
-
(08:54) Bastiat:
“The more we examine these advanced schools, the more do we become convinced that there is but one thing at the root of ignorance: Proclaiming itself infallible and claiming despotism in the name of this infallibility.”
-
(14:14) Guy Swann:
“The platforms that these network owners… control the network through which that service can be offered, are kind of universally hated…”
-
(24:51) Guy Swann:
“It’s not about removing the intermediaries; it’s about removing the intermediaries’ control…”
-
(27:39) Guy Swann:
“They are intermediaries without being custodians… you are getting paid for that service without ability to meaningfully abuse, corrupt, or stop transactions.”
-
(29:28) Guy Swann:
“It puts them in their proper place and isolates the one very critical job that they do to only that job and creates protocols for assessing and verifying everything else that they are delivering. Outside of needing them.”
-
(36:44) On Audible, Guy Swann:
“They are no longer facilitators; they are owners. And I don’t really hate them for it—it’s a technological problem…”
-
(43:29) Bastiat:
“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good?…”
Timestamped Guide to Major Segments
- 00:00–03:05 – Introduction & Guy’s framing of the role of intermediaries in markets
- 03:05–07:56 – Bastiat’s history lesson: the wheat-from-Odessa analogy; critique of anti-intermediary socialism
- 07:56–10:37 – The knowledge problem, division of labor, and Bastiat’s foundational economic insight
- 10:37–13:58 – Market mechanics: why middlemen’s compensation is earned and self-regulating
- 13:58–20:10 – Modern platforms, user frustration, and the fallacy of eliminating all intermediaries
- 20:10–29:28 – Case study: Bitcoin, Lightning, servers vs. peer-to-peer, and separation of function from control
- 29:28–36:44 – Data ownership, lock-in horror stories, and the consequences of losing content/network portability
- 36:44–43:29 – Call to action: protocols over platforms, the future of content and networks, closing Bastiat quote
Tone & Language
Guy’s tone throughout is critical yet optimistic, candid, and slightly exasperated with recurring industry and cultural misunderstandings. He blends historical economic analysis (Bastiat), practical anecdotes, and rants about modern software pain points. The style is accessible, jargon-light (for Bitcoin Audible), and peppered with informal asides.
Summary Takeaway
Intermediaries are indispensable to complex societies and markets—including Bitcoin’s. The true problem isn’t their existence, but their accumulation of abusive control. Modern protocols are showing how to restore intermediaries’ role as mere facilitators, ensuring users retain ownership and portability of their assets, networks, and content. The right solution is to architect systems where switching intermediaries is frictionless, and the cost of exit is trivial, not to embark on the futile quest of eliminating intermediaries altogether.