It's a sign of our times that one of the more insightful comments this week should come not from our debased media but from a minor royal. Prince Harry's complaint that his mother and wife have been "commoditised to the point that they are no longer treated or seen as a real person" hints at an important aspect of capitalism - commodification.

This is the process whereby people and social relations are marketized and turned into goods and services to be bought and sold. Capitalism "has left remaining no other nexus between man and man than naked self-interest, than callous "cash payment"" wrote Marx and Engels. "It has resolved personal worth into exchange value."

Very broadly speaking, there are two types of commodification. One is endogenous such as in the case Harry is complaining of, whereby the media treat its subjects (in some cases with their cooperation) as commodities to be used to sell papers. Another example is when non-monetary motives such as professional pride are displaced by financial ones. Yet another is when internet companies such as Facebook and Google convert data about their customers into something they can sell to advertisers.

A second type of commodification occurs with state assistance. One huge way in which this occurred was through the privatization of land, via the dissolution of the monasteries and enclosure acts. These helped create not only markets in land, but also in labour (pdf) as peasant farmers were driven into the industrial labour force. This process is still going on. Other examples are: privatization and outsourcing; the imposition of tuition fees which have converted universities into commodities; copyright laws which allow capitalists to commoditize elements of music; and low state pensions which have given space to companies to sell over-priced private pension management.

Many of these moves are a response to capitalist stagnation. Profit rates (pdf) have been in long-term decline. This means capitalists need the state to help it create new markets, new ways of making profits.

You might wonder: what's so bad about all this? After all, markets are often a great way of allocating goods and services efficiently.

One problem is that this is not always the case. Commodified universities are in many respects worse than their predecessors, offering devalued degrees and shoddy research. Financial motives can produce worse behaviour and less innovation than intrinsic motives. And sometimes the state is just better at doing things than the private sector: this, I think, is true of pension provision.

The second problem is that markets change culture. Sometimes, this is for the better. As Dierdre McCloskey has argued, they can promote bourgeois virtues. But not always. G.A Cohen has written:

The market posture is greedy and fearful in that one's opposite-number marketeers are predominantly seen as possible sources of enrichment, and as threats to one's success. These are horrible ways of seeing people...The market is intrinsically repugnant." (Why Not Socialism? p40)

Whether Cohen or McCloskey is correct depends upon context. In the context Prince Harry is speaking, Cohen's right. Farmers' markets, by contrast, vindicate McCloskey. There's a big difference between a healthy commercial society and rapacious capitalism. For this reason some forms of decommodification are to be welcomed, be they Parkrun, LETS or proposals for abolishing tuition fees or introducing universal basic services (pdf).

My point here is twofold, and should be (but perhaps isn't) trivial. First, the creation of markets is often not a natural process, but often involves heavy state intervention. And secondly, the question of whether goods and services should be allocated by market, state or voluntary cooperation is not merely an arid technocratic one but one which shapes future culture and morals.