Commodification
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Commodification (or commoditization) is the transformation of what is normally a non-commodity into a commodity, or, in other words, to assign value. As the word commodity has distinct meanings in business and in Marxian theory, commodification has different meanings depending on the context.
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[edit] Business and economics
In the business world, commodification is a process that transforms the market for a unique, branded product into a market based on undifferentiated price competition. In economic terms, the market changes from one of monopolistic competition to one of perfect competition. Commodification can be the desired outcome of an entity in the market, or it can be an unintentional outcome that no party actively sought to achieve.
Consumers usually benefit from commodification, since perfect competition usually leads to lower prices. (Crude oil is a notable exception.) Branded producers often suffer under commodification, since the value of the brand (and ability to command price premiums) can be weakened. For example, a June 2006 Fortune article by Marc Gunther discussed how commodification has been a challenge to Sony: "Almost as soon as Sony unveils a new device, cheap knockoffs are built in China." That is to say that Sony products are undifferentiable from the competing products, diminishing the value of the Sony brand.
[edit] Marxist theory
In Marxist political economy, commodification takes place when economic value is assigned to something that traditionally would not be considered in economic terms, for example, an idea, identity, gender. For instance, sex becomes a marketed commodity, something to be bought and sold rather than freely exchanged. Human beings can be considered subject to commodification in contexts such as genetic engineering, social engineering, cloning, eugenics, social Darwinism, Fascism, mass marketing and employment.
[edit] Criticism
The process of commodification often has negative connotations for the individuals who discuss it. Karl Marx extensively criticized the social impact of commodification under the name commodity fetishism. A criticism of commodification is that it ignores individual agency and the individual's ability to resist the never-ending spread of the market. Commodification itself became popular during the rise of critical discourse analysis in semiotics.
[edit] External links
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