Commodification
Within a capitalist economic system, commodification is the transformation of goods, services, ideas, nature, personal information and people into commodities or objects of trade. A commodity at its most basic, according to Arjun Appadurai, is "anything intended for exchange," or any object of economic value.
Commodification is often criticised on the grounds that some things ought not to be treated as commodities—for example water, education, data, information, knowledge, human life, and animal life. Human commodity is a term used in case of human organ trade, paid surrogacy also known as commodification of the womb, and human trafficking. Slave trade as a form of human trafficking is a form of the commodification of people. According to Gøsta Esping-Andersen people are commodified or 'turned into objects' when selling their labour on the market to an employer.
Terminology
The earliest use of the word commodification in English attested in the Oxford English Dictionary dates from 1975. Use of the concept of commodification became common with the rise of critical discourse analysis in semiotics.Business and economics
The word commodification, which describes assignment of economic value to something not previously considered in economic terms, is sometimes also used to describe the transformation of the market for a unique, branded product into a market based on undifferentiated products.These two concepts are fundamentally different and the business community more commonly uses commoditization to describe the transformation of the market to undifferentiated products through increased competition, typically resulting in decreasing prices. While in economic terms, commoditization is closely related to and often follows from the stage when a market changes from one of monopolistic competition to one of perfect competition, a product essentially becomes a commodity when customers perceive little or no value difference between brands or versions.
Commoditization 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.
According to Neo-classical economic theory, consumers can benefit from commoditization, since perfect competition usually leads to lower prices. Branded producers often suffer under commoditization, since the value of the brand can be weakened.
However, false commoditization can create substantial risk when premier products do have substantial value to offer, particularly in health, safety and security. Examples are counterfeit drugs and generic network services.
Commodification and commoditization
The terms commodification and commoditization are sometimes used synonymously, particularly in the sense of this article, to describe the process of making commodities out of anything that was not used to be available for trade previously; compare anthropology usage.However, other authors distinguish them, with commodification used in social contexts to mean that a non-commercial good has become commercial, typically with connotations of "corrupted by commerce", while commoditization is used in business contexts to mean when the market for an existing product has become a commodity market, where products are interchangeable and there is heavy price competition. In a quip: "Microprocessors are commoditized. Love is commodified."
The difference between the terms of commodification and commoditization has been drawn by James Surowiecki and Douglas Rushkoff. In particular, Rushkoff argued that the words commodification and commoditization were used to describe the two different processes of the assignment of value to a social good, and the movement towards undifferentiated competition, respectively:
Commodification is used to describe the process by which something which does not have an economic value is assigned a value and hence how market values can replace other social values. It describes a modification of relationships, formerly untainted by commerce, into commercial relationships in everyday use.
Commoditization is the process by which goods that have economic value and are distinguishable in terms of attributes end up becoming simple commodities in the eyes of the market or consumers. It is the movement of a market from differentiated to undifferentiated price competition and from monopolistic to perfect competition.
Cultural commodification
American author and feminist bell hooks thinks about the cultural commodification of race and difference as the dominant culture "eating the other". To hooks, cultural expressions of Otherness, even revolutionary ones, are sold to the dominant culture for their enjoyment. And any messages of social change are not marketed for their messages but used as a mechanism for the dominant ones to acquire a piece of the "primitive". Any interests in past historical culture almost always have a modern twist. According to Mariana Torgovnick:What is clear now is that the West's fascination with the primitive has to do with its own crises in identity, with its own need to clearly demarcate subject and object even while flirting with other ways of experiencing the universe.
hooks states that marginalized groups are seduced by this concept because of "the promise of recognition and reconciliation".
When the dominant culture demands that the Other be offered as sign that progressive political change is taking place, that the American Dream can indeed be inclusive of difference, it invites a resurgence of essentialist cultural nationalism.
Commodification of indigenous cultures refers to "areas in the life of a community which prior to its penetration by tourism have not been within the domain of economic relations regulated by criteria of market exchange”. An example of this type of cultural commodification can be described through viewing the perspective of Hawaiian cultural change since the 1950s. A Hawaiian Luau, which was once a traditional performance reserved for community members and local people, but through the rise of tourism, this tradition has lost part of its cultural meaning and is now mostly a "for profit" performance.
Digital commodification is when a business or corporation uses information from an online community without their knowledge for profit. The commodification of information allows a higher up authority to make money rather than a collaborative system of free thoughts.