Differentiation dies the moment the buyer can’t tell your version apart from the next one, and price becomes the only thing left to compete on.
Theodore Levitt’s 1960 “Marketing Myopia” made the foundational version of this argument: companies that define themselves by what they make, rather than the need they serve, eventually watch that thing become a commodity, because someone else can always make it cheaper. Later empirical work confirms the pattern holds even where differentiation looks structurally hard to erase. Food retailing, a category built on brand and quality signalling, still commoditises once shoppers can’t reliably tell products apart on the shelf.
This is the mechanism describing coding “becoming commoditised”: not that software stops mattering, but that the specific skill of writing it stops being the scarce, differentiating input once a buyer can get comparable output from any sufficiently capable source. Human or AI.
Karl Polanyi’s The Great Transformation (1944) named the deeper structural version of this: Polanyi argued ‘market societies’, where markets govern societies, as opposed to societies utilising markets, inevitably provoke a countermovement against “fictitious commodities”: institutions and practices that pull land, labour, or money back out of pure market pricing. Contemporary research extends this at a smaller, organisational scale. Peredo and McLean (2020) document decommodification in action: structuring common property specifically to resist being priced and traded like an ordinary commodity. Whether these countermovements are a net social good is a separate, contested question the underlying diagnosis of what’s happening doesn’t require settling.
This is the wider frame a relationship being “commodified” sits inside: not a metaphorical borrowing of a marketing term, but the same fictitious-commodity mechanism Polanyi described, applied to trust and kinship rather than land or labour.
Source: Sogn-Grundvåg, G. & Young, J. “Commoditization in Food Retailing: Is Differentiation a Futile Strategy?” Journal of Food Products Marketing, 2013. Foundational: Levitt, T. “Marketing Myopia,” Harvard Business Review, 1960; Polanyi, K., The Great Transformation, 1944; Peredo, A.M. & McLean, M., “Decommodification in Action: Common Property as Countermovement,” Organization, 2020.