A Theory of Commodification

Abstract This chapter presents a novel theory of commodification. According to Marx, commodification is a process by which exchange value comes to dominate use value. Markets, money, and profit-orientation are instruments that facilitate the subjugation of use value to exchange value. However, the book takes market value, rather than exchange value, as the denominator of use value. Market value depends on supply and demand and is open to manipulation and speculation. The chapter, furthermore, argues that commodification is a process and, subsequently, distinguishes between formal, real, and fictitious commodification. Typically, real commodification (the transformation of goods and services) follows formal commodification (the imposition of a price), but in some cases products first have to be standardized in order to become commodities that can be exchanged on a market. Fictitious commodification, i.e., the introduction of quasi-markets in public services and the transformation of service users into consumers, prepares the ground for formal and real commodification.