(Written in 2009)
It was in three years ago- I realized that the word’ commodity’ had a wider meaning.
I was home in India on holidays after a gap of two years and there was one change visible everywhere. Everyone - however poor had a mobile phone. The barely literate maid asked my wife if she could charge her phone while working in our house. When I had left in 2007- a mobile phone was still a luxury. It was not given to my school going son then.
I was told- there were 500 million mobile phones (now more than a billion) in India- that was a phone for less than 2 people in a poor country of more than 1 billion people. It was when someone told me, “Mobile phone is a commodity now,” - I suddenly became aware that a commodity was anything that is routinely available and bought at prices affordable to all or most people. I came to see ‘commoditization’ in new light, as a process of turning luxury goods into those of mass use.
Till then the word ‘commodity’ had an undertone of contempt appropriate for inferior goods. But it was no longer so. I was too excited by the mobile phone revolution in India. If ‘commodities’ make one’s life better, what could be wrong with them? Living in US for 3 years- I had seen an average American having many such ‘commodities’ starting with 24 x 7 electricity, running water, kitchen gadgets, washer/dryer, entertainment gadgets, computers, phones- all that gave him comfort and saved his labor. Many of these ‘commodities’ are however still luxuries for an average Indian. It did not take me any time to conclude that in the final count it is ‘commodities’ that makes an American richer than an Indian or US a richer country than India.
Technology has made it possible to mass produce or commoditize what was once a premium or luxury product, each piece exactly same as one another and in a shorter time and at a lot lower cost. Of the first commoditized products, I learnt one was T-Model car built on conveyor belt assembly line by Ford Motor Car Company. Another was a mass housing project by Arthur Levitt in New York- who borrowed the same assembly line principle to meet the huge housing demand of soldiers returning from Second World War. In the last two decades- developing countries, particularly China, have taken commoditization to new heights. Clothes, shoes, toys, electronics, mobile phones, home tools, air travel now actually cost much less than 20 years ago when related to income of buyers. Besides the process of turning premium products into commodities has been a continuous process and better ‘commodities’ continuously keep replacing lesser ones. Think of the top premium mobile phone 5 years back. Chances are- it is a ‘commodity’ and placed at the bottom of the range today and available at a fraction the old price or may have been removed altogether.
Then why should not commoditization measure economic progress of a country? It may be a better measure than GDP. GDP is only an account of money spent and does not include any activity not paid for like labor put in by dads and moms at home (when added up- labor of all dads and moms for cooking, cleaning, gardening, child caring is substantial). Commoditization- on the other hand is about real benefits received by people. As a result of massive commoditization- a far larger number of people are better off than before. Therefore, if commoditization increases- people gain and so the nation gain.
I threw my new idea at the dinner table but it did not receive any excited response. My wife said, “Gadgets do no good to anyone”. She sounded like her oft repeated belief, “Money does not bring happiness, success does”. Or may be she thought I was building my case for a new gadget.
A friend was more insightful. He said that it was an interesting idea and it could even go beyond clothes, shoes, or mobile phones to other things that also added to the quality of life. Democracy- is actually commoditizing of political power down to the reach of masses (he said that mass production can also be called democratization of luxury products). Rule of law and independent courts – is commoditizing the privilege of protection to life and property otherwise available only to ruling elites. Similarly low cost or free education and health care services for all is commoditization of what only rich could buy. All these relate to benefits to people and have a value and therefore should have a place the measure of commoditization.
How about having a "Commoditization Index" for each country to reduce over emphasis on GDP measure?
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