> If we accept that your "good" and "mediocre" programmers are commodities, there's no basis to call them "good" and "mediocre" because they're fungible to their employer.

Being fungible doesn't imply that there is no quality difference between goods. It just means the quality difference is irrelevant to the purchaser. Stationeries are viewed as commodities by most businesses but I can still distinguish a good pen from a bad one.