[Biweekly Symposium] No. 593: Brokers, Division of Labour, and the Service Economy: An Inframarginal Analysis.

Lecturer: PANG Chun

Host: QIN Sidao

Commentators: JIANG Qiping, YANG Peifang, WU Qing

Professor PANG Chun started with two questions regarding brokers in the service industry: firstly, why do they exist? And secondly, what is the nature of the service economy from the perspective of the brokers who provide services? It seems like an easy question, but why wouldn’t the consumers go to the factories and buy what they need? Why won’t these factories hire logistics companies to deliver their goods to their consumers? Professor PANG Chun pointed out the the shift of goods depends on the service, that is the service of delivery, information, marketing, and post-sale services. Therefore, he established that the service industry is a special good that “connects” both parties of a deal.He also illustrated the cost, effectiveness, devision, and necessity of the service industry. A “hub”, as Professor PANG referred to the service industry, is also the link that claims an extra fee for offering the transfer of the content of an exchange. He also argued that through improvement of the service industry, the transaction cost of exchanges would be greatly lowered. Therefore, a critical target of the reform of an economy should also be increase the institutional efficiency. 

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