Commodification, decommoditization and value judgments

Commodification is described, defined and used in many different ways. One major difference can be attributed to the way commodification is described in business settings vs. in social settings.

In the business world, we often hear of decommoditization. 

Decommoditization in the business sense usually means differentiating a product on the basis of more than price. You may know a common instance of this as 'branding'. The business tries to have its 'commodity' products (which are differentiated largely only on the basis of price and nothing else) seen as something more. This is often done by associating the product with 'humanizing' messages of belonging, validation, nostalgia and so forth.

Who hasn't seen a commercial in which we are told a product will make us look better, be accepted, or remind us of the 'good old days'?

This is an attempt to associate a commodity product (that cannot compete with similar products in any way other than by lowering the price) with something more (usually more humanizing or interpersonal) in order to generate higher profits. 

But in social sciences and other settings, this is called 'commodification'. Isn't that the opposite?

It is true that in business literature, this practice of decommoditizing products is portrayed as a good way to maximize profits. Commoditization, on the other hand is usually bad for profits, because it usually means you can only gain a competitive advantage by lowering your price. 

So why do so many social scientists portray businesses and capitalist societies as bent on the destructive practice of commodifying--commodifying people, labor, relationships, even thoughts, feelings and artistic expression? Aren't most businesses trying to decommoditize instead of commoditize?

Why does the business world so often describe decommoditization as a better way to make money, yet social scientists insist that the business world is out to 'commodify' everything? 

Well, I have given two reasons before: 1) businesses are sensitive to negative externalities and will often only engage in decommodification to the extent that it does not involve paying to reduce negative externalities (because that can cut into profits--or at least that is the argument). 2) Businesses often engage in what I have called 'unilateral' decommodification--the attempt to 'manufacture' or give the appearance of decommodification rather than actually decommodifying. It is the attempt to give the appearance of decommodification to the consumer. Cohen (1988) called this "staged authenticity". 

So, why all the apparent contradiction?

Businesses describe decommoditization as a better way to make money, yet social scientists often portray businesses as being out to commodify things in ways that have outcomes that are destructive to human feelings and intrinsic worth. Why the apparent contradiction?

THE ANSWER IS THAT COMMODIFICATION INVOLVES VALUE JUDGMENTS, AND ALSO HINGES ON PERSPECTIVE.

Here is a clear cut example:

"It turns out that people are most sensitive to the effects of commodification in the cultural arena. Paradoxically, advertising promotes commodification while simultaneously denying it. Advertising blankets the cash nexus with narratives and signifiers that position the meaning of the commodity within non-commodified relations. For example, ads often place commodities at the center of idyllic familial relations. Just think of the many McDonald's commercials in which dad shares a moment of quality time with his son over a Happy Meal that includes a plastic promo from the latest Disney movie. Imagery of exchange is replaced by a representation of a caring moment between father and child" (from stlawu.edu course on global capital).

So, in this example, the assertion is made that businesses try to replace images of a commodity product with humanizing, social, and relational images--that is a good summary. Businesses are trying to replace images of commodities with more decommodified images of the thing being sold--because it's better business. And, let's be honest, many of us do prefer to buy things we feel good about over things we don't. Granted some people will do anything to save a dollar, but many (most?) people prefer to buy products we trust, feel confident in and feel good about (look at the literature that has already discussed the social implications of consuming commodities: Veblen's 'conspicuous consumption' [1899], Baudrillard [1972]).

So far so good. But the quote above also states "Paradoxically, advertising promotes commodification while simultaneously denying it". This is my (repeated) point about what I call 'unilateral' decommodification. The issue is not that businesses prefer to sell decommodified products, the issue is not even that they try to embed commodities with relational or humanizing elements--because many people prefer to feel good about the products they are buying. 

The issue really involves value judgments about what 'should' or 'should not' be done. 

The real question is: 'Is it OK for business to try to associate their products with relational, interpersonal and humanizing elements, and if so, to what extent?' Most people would probably agree that businesses should be able to present their products in the best light possible--that is one end of the decommoditization spectrum. On the other end, some businesses sometimes destroy things that by human consensus have been deemed invaluable, and do so through blatant dishonesty and intrigue. For example, most people would likely say that businesses should not be allowed to destroy all the rain forests by lying about how many trees they are cutting down there, or that they should be able to mine on indigenous lands by 'paying off' local governments. 

So the question is: Where do we draw the line?

It is a bigger question than is parsimonious for the current project. However, it should be noted that 'unilateral' decommoditization (the attempt to present a humanizing or affective side of a product being sold) is not inherently bad. It is a matter of what limits should be imposed on those attempts. Additionally, how will those limits be enforced? (These decisions are usually made by social consensus and enforced through the state.) Some people feel that businesses should not be allowed to advertise at all, and others may feel like businesses should be allowed to decide hos to market their product without any kind of outside intervention. But most people probably fall between those two extremes. 

Incidentally, a classic case occurred in the 2000s and check cashing establishments would successfully write loans with APRs well into the 100s (200-300% or higher) to unsuspecting customers. On one hand, some might say, 'If the business is able to convince the consumer that it is good for them, and the customer signs on the dotted line then it should be legit.' However, others argued that the businesses were creating a false sense of security through sales tactics and luring people into bad situations. On way of seeing it, in other words, is to ask if businesses should any be able to sell a product that is bad for the customer if they are persuasive enough to get the customer to agree. The decision was that these businesses had passed the bounds of propriety, and new laws about disclosing APRs was put into place. Now it had to be made very clear to the customer how much they would be paying over time. (You may have noticed on your own credit card bills that your bank occasionally discloses how much your payoff over different time periods will be). 

Think of the quote above. In McDonalds' mind, it may not be a bad thing to make customers feel better about their product--even many of the customers may like that better. Would you rather eat in a bright colored place with happy images, or would you rather eat your burger in a warehouse on plain tables and chairs? In a way, we like this sort of manufactured decommodification. For example, think of all the people that go to Disney Land each year to have good and happy experiences, even if they know they are all manufactured experiences (a kind of 'unilateral' decommodification). There is nothing wrong with businesses creating manufactured experiences or with people consuming them. 

So, really, it is a matter of perspective. 

The author of the quote above says that businesses promote commodification while denying it at the same time. But is that really what businesses are doing. 

I argue that it is not!

Businesses have a right (within limits) to create more enjoyable customer experiences--and most of us like that to some degree. So it is not 'unilateral' or 'manufactured' decommodification that is bad per se, it is a question about the limits within which it should be done--and that comes down to a value judgment as described above. 

Now, the issue of perspective:

Perspective has a direct tie-in with value judgments in that your perspective tells you whether or not something is ok to do. However, there is more to perspective than that. 

For the author of the quote given above, businesses are trying to promote commodification while hiding it, yet I do not believe most business would say that they are doing that. Here, the perspective relates to the unit of analysis!

Perspective and unit of analysis

The unit of analysis can make it so that two parties, talking about the same phenomenon see it in two totally different ways. One sees it as destructive practices of commodification and the other as positive practices of decommodification. The point is, in the quote above, the business is talking about the product, and they say that the product is being decommoditized to give a better customer experience--and that may be true. The social scientist often says that this is commodification and is destructive because they are looking, not at the product, but at social relationships in general! To me, the quote given above takes the side of a social scientist and the author would probably say that McDonald's is embedding commodities into relationships while businesses would probably say they are embedding relationships into commodities. So, yes, from the business perspective, they are making a product (their unit of analysis) better, while for social scientists it is making relationships (their unit of analysis) worse. 

Conclusion:

The same phenomenon can be seen by party 1 as negative, destructive commodification and by party 2 as positive and helpful decommodification. It is a matter of moral judgment (what is right and wrong) and of perspective--not just the perspective related to what any given person thinks is OK, but perspective related to the unit of analysis (or in less formal settings the unit of interest). 

For businesses, they improve experiences by decommoditizing the product by embedding it with relationships and other humanizing phenomena, but social scientists often describe the way the relationships and other humanizing elements are degraded or reduced to the commodity images that business or market practices embed in them. 

This explains why businesses often talk about profit maximization and improvement in terms of decommoditization and social scientists discuss profit motives in terms of commodification. The business person is referring to the product being decommodified, and the social scientist is observing how relationships or other humanizing elements are being paired with (or 'reduced to') commodities. 

In a sentence: By attaching more 'humanity' to a product, we also attach more 'product' to humanity!

Cohen, E. (1988). Authenticity and commoditization in tourism. Annals of tourism research, 15(3), 371-386.