Commodity

Definition

A commodity is a basic good or raw material that is interchangeable with other goods or materials of the same type. Commodities are the foundational elements of exchange, value, and consumption within an economic system.

5 Must Know Facts For Your Next Test

1. Commodities are typically homogeneous, meaning they are interchangeable and have little to no differentiation between units.
2. The exchange value of a commodity is determined by the socially necessary labor time required to produce it, rather than its intrinsic properties.
3. Commodities are the basic building blocks of capitalist economies, where they are produced for exchange rather than direct use.
4. The fetishism of commodities obscures the social relations and human labor that go into their production, making them appear to have inherent value.
5. The transition from a subsistence economy to a market economy involves the transformation of goods and services into commodities.

Review Questions

• Explain how the concept of a commodity relates to the idea of exchange value.
  • The exchange value of a commodity refers to its ability to be traded or exchanged for other goods or services in the market. This exchange value is determined not by the intrinsic properties of the commodity, but by the socially necessary labor time required for its production. The interchangeable nature of commodities facilitates their exchange, allowing for the creation of a market where their relative values can be determined.
• Describe the role of commodity fetishism in obscuring the social relations underlying the production of commodities.
  • Commodity fetishism is the tendency to ascribe magical or supernatural powers to inanimate objects, such as commodities, while obscuring their social and human origins. This fetishism masks the complex web of social relations, including the labor and production processes, that go into the creation of a commodity. By presenting commodities as having inherent value, commodity fetishism hides the fact that their value is ultimately derived from the human labor and social interactions that enable their production and exchange.
• Analyze how the transition from a subsistence economy to a market economy involves the transformation of goods and services into commodities.
  • In a subsistence economy, goods and services are primarily produced for direct use and consumption, rather than for exchange. However, the transition to a market economy involves the transformation of these goods and services into commodities, which are produced for the purpose of exchange. This transformation means that the value of these items is no longer determined by their use value, but by their exchange value, which is shaped by the socially necessary labor time required for their production. The commodification of goods and services is a fundamental aspect of the shift from a subsistence economy to a market-based, capitalist system.

Related terms

Exchange Value: The value of a commodity determined by its ability to be traded or exchanged for other goods or services in the market.

Use Value: The value of a commodity determined by its ability to satisfy a human want or need, independent of its exchange value.

Fetishism: The tendency to ascribe magical or supernatural powers to inanimate objects, such as commodities, obscuring their social and human origins.