This page has been temporarily protected from editing to deal with vandalism. Please discuss changes on the talk page or request unprotection. You may use {{editprotected}} on the talk page to ask for an administrator to make an edit for you.

Commodity is a term with distinct meanings in both business and in Marxian political economy. For the former, it is a largely homogeneous product, traded solely on the basis of price, whereas for the latter, it refers to wares offered for exchange. Image File history File links Padlock. ... Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business. ... Marxian economics refers to a body of economic thought stemming from the work of Karl Marx. ... Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ...

Linguistically, the word commodity came into use in English in the 15th century, being derived from the French word "commodité", meaning today's (2000) "convenience" in term of quality of services. The Latin root meaning is commoditas, referring variously to the appropriate measure of something; a fitting state, time or condition; a good quality; efficaciousness or propriety; and advantage, or benefit. The German equivalent is die Ware, i.e. wares or goods offered for sale. The French equivalent is "produit de base" like energy, goods, industrial raw materials. A convenience is a luxury that is intended to save a consumer time or frustration. ...

Business usage

Main article: Capitalism

In the world of business, a commodity is an undifferentiated product, good or service that is traded based solely on its price, rather than quality and features. Examples include: electricity (most users of electric power are only concerned with energy consumption; only a minority of users are concerned with the quality and technical details of voltage and frequency deviations, phase imbalance, "stability" as guaranteed by backup equipment, etc.), wheat, bulk chemicals such as sulfuric acid, base and other metals, and even pork-bellies and orange juice. More modern commodities include bandwidth, RAM chips and (experimentally) computer processor cycles, and negative commodity units like emissions credits. This box:      Capitalism generally refers to an economic system in which the means of production are mostly privately [1] owned and operated for profit and in which distribution, production and pricing of goods and services are determined in a largely free market. ... Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business. ... A good in economics is any object or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ... Wikibooks has more about this subject: Marketing In economics and marketing, a service is the non-material equivalent of a good. ... A fruit stand at a market. ... Lightning strikes during a night-time thunderstorm. ... Species T. aestivum T. boeoticum T. compactum T. dicoccoides T. dicoccon T. durum T. monococcum T. spelta T. sphaerococcum References:   ITIS 42236 2002-09-22 For the indie rock group see: Wheat (band). ... Sulfuric acid (British English: sulphuric acid), H2SO4, is a strong mineral acid. ... In chemistry, the term base metal is used informally to refer to a metal that oxidizes or corrodes relatively easily, and react variably with dilute hydrochloric acid (HCl) to form hydrogen. ... Hot metal work from a blacksmith In chemistry, a metal (Greek: Metallon) is an element that readily forms positive ions (cations) and has metallic bonds. ... Pork bellies are the underside of the hog, from which bacon is made. ... Orange Juice was a Scottish post punk band founded in the middle class Glasgow suburb of Bearsden as the Nu-Sonics in 1976, becoming Orange Juice in 1979. ... This article or section does not cite its references or sources. ... Random access memory (usually known by its acronym, RAM) is a type of data store used in computers that allows the stored data to be accessed in any order — that is, at random, not just in sequence. ... This article is in need of attention. ... Emissions trading is a proposed economic solution to air pollution. ...

In the original and simplified sense, commodities were things of value, of uniform quality, that were produced in large quantities by many different producers; the items from each different producer are considered equivalent. It is the contract and this underlying standard that define the commodity, not any quality inherent in the product. One can reasonably say that food commodities, for example, are defined by the fact that they substitute for each other in recipes, and that one can use the food without having to look at it too closely. A contract is a legally binding exchange of promises or agreement between parties. ... An example recipe, printed from the Wikibooks Cookbook. ...

Commodities exchanges include:

• Chicago Board of Trade
• Euronext.liffe
• London Metal Exchange
• New York Mercantile Exchange

Microeconomists also include labor, and currency as commodities that can be bought and sold. The Chicago Board of Trade (CBOT) NYSE: BOT, established in 1848, is the worlds oldest futures and options exchange. ... Euronext. ... The London Metal Exchange or LME is the futures exchange with the worlds largest market in options and futures contracts on base and other metals. ... The New York Mercantile Exchange**** NOTE the AMENX is FAKE, created by york-commodities to scam your money, if you send money you will never see it again**** You have been warned. ...

Examples

Wheat is an example of a soft commodity. Wheat from many different farms is pooled. Generally, it is all traded at the same price; wheat from farm A is not differentiated from wheat from farm B. Some uniform standard of quality must necessarily be assumed. There may be various standards leading to different pools: one say for genetically modified wheat, and one for unmodified wheat. Failures to match the consumer's assessment of risk and usefulness for some purpose, can lead to lower prices or the necessity of dividing the market into different pools - a very major issue in agricultural policy. Species T. aestivum T. boeoticum T. compactum T. dicoccoides T. dicoccon T. durum T. monococcum T. spelta T. sphaerococcum References:   ITIS 42236 2002-09-22 For the indie rock group see: Wheat (band). ... soft commodity is a commodity such as coffee, cocoa, sugar and fruit. ... Genetic engineering, genetic modification (GM), and gene splicing (once in widespread use but now deprecated) are terms for the process of manipulating genes in an organism, usually outside of the organisms normal reproductive process. ... Species T. aestivum T. boeoticum T. compactum T. dicoccoides T. dicoccon T. durum T. monococcum T. spelta T. sphaerococcum References:   ITIS 42236 2002-09-22 For the indie rock group see: Wheat (band). ... For other uses, see Risk (disambiguation). ... This article needs to be cleaned up to conform to a higher standard of quality. ...

Markets for trading commodities can be very efficient, particularly if the division into pools matches demand segments. These markets will quickly respond to changes in supply and demand to find an equilibrium price and quantity. This article or section is missing references or citation of sources. ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... Market segmentation is the process of grouping a market into smaller subgroups. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... Price of market balance In economics, economic equilibrium or market equilibrium refers to a condition where the market clears: which is when the market for a product has attained the price where the amount supplied of a certain product equals the quantity demanded. ... In economics and business, the price is the assigned numerical monetary value of a good, service or asset. ...

Commodities and Marxism

Main article: Marxism

In classical political economy and especially Karl Marx's critique of political economy, a commodity is simply any good or service offered as a product for sale on the market. Some items are also seen as being treated as if they were commodities, e.g. human labour or labor power, works of art and natural resources, even though they may not be produced specifically for the market, or be non-reproducible goods. Marxism refers to the philosophy and social theory based on Karl Marxs work on one hand, and to the political practice based on Marxist theory on the other hand (namely, parts of the First International during Marxs time, communist parties and later states). ... Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Karl Heinrich Marx (May 5, 1818, Trier, Germany – March 14, 1883, London) was a German philosopher, political economist, and revolutionary. ... Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Labor power (in German: Arbeitskraft, or labor force) is a crucial concept used by Karl Marx in his critique of political economy. ...

Marx's analysis of the commodity is intended to help solve the problem of what establishes the economic value of goods, using the labor theory of value. This problem was extensively debated by Adam Smith, David Ricardo and Karl Rodbertus-Jagetzow among others. Value and price are not equivalent terms in economics, and theorising the specific relationship of value to market price has been a challenge for both liberal and Marxist economists. The labor theory of value (LTV) is a theory in classical economics concerning the value of an exchangeable good or service. ... Adam Smith, LL.D., FRS, FRSE (born June 5, 1723 O.S. / June 16 N.S. / July 17, 1790) was a Scottish political economist and moral philosopher. ... David Ricardo (April 18, 1772 – September 11, 1823), a political economist, is often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, and Adam Smith. ... Karl Rodbertus-Jagetzow (1805-1875), was a German economist and socialist. ... In economics and business, the price is the assigned numerical monetary value of a good, service or asset. ...

Characteristics of commodity

In Marx's theory, a commodity has value, which represents a quantity of human labor. The fact that it has value implies straightaway that people try to economise its use. A commodity also has a use value, an exchange value and a price. The labor theory of value (LTV) is a theory in classical economics concerning the value of an exchangeable good or service. ... In Marxian political economy, any commodity, i. ... In Marxian political economy, exchange value refers to one of three major aspects of a commodity, i. ... In economics and business, the price is the assigned numerical monetary value of a good, service or asset. ...

• It has a use value because, by its intrinsic characteristics, it can satisfy some human need or want, physical or ideal. By nature this is a social use value, i.e. the object is useful not just to the producer but has a use for others generally.

• It has an exchange value, meaning that a commodity can be traded for other commodities, and thus give its owner the benefit of others' labor (the labor done to produce the purchased commodity).

• Price is then the monetary expression of exchange-value (but exchange value could also be expressed as a direct trading ratio between two commodities without using money).

According to the labor theory of value, product-values in an open market are regulated by the average socially necessary labour time required to produce them, and price relativities are ultimately governed by the law of value. The labor theory of value (LTV) is a theory in classical economics concerning the value of an exchangeable good or service. ... Socially necessary labour time in Marxs critique of political economy is what regulates the exchange value of commodities in trade and consequently guides producers in their attempt to economise on labour. ... The law of value is a concept in Karl Marxs critique of political economy. ...

Illustration

To understand the concept of a commodity, consider a chair. It is a commodity if the chair is a tradeable product of human work possessing a social use-value. By contrast, a fallen log of deadwood sat upon in the forest is not a commodity, as it was not produced by human work for the purpose of trade. A chair created by a hobbyist as a gift to someone is not a commodity. Nor is a chair a commodity (as a chair) if its only use would be as scrap firewood (unless one purchases a chair specifically to chop it up for fire wood). A chair that nobody could sit on has no use-value, and cannot be a commodity (unless it has an ornamental value, e.g. in a doll's house).

See also

• List of traded commodities
• Commodity price index
• Commodity markets
• Commodity money
• Commodity form theory
• Commodity computer
• Property
• Trade
• Law of value
• Simple commodity production
• Use value
• Exchange value
• Real prices and ideal prices
• Gold as an investment
• Trading Places - comedic film about playing the commodity markets

// Foodstuffs Fuels Precious metals Industrial metals Rare metals Other Source This list is partly adapted from [8] (Consumerium) under the clauses of GFDL External links NYMEX.com London Metal Exchange Euronext - Commodities > Commodities Chicago Board of Trade Category: ... A Commodity Price Index is a fixed-weight index of the spot or transaction prices of multiple commodities. ... This article or section is missing references or citation of sources. ... Commodity money is money whose value comes from a commodity out of which it is made. ... Commodity form theory is a theory of jurisprudence advanced by the Soviet legal theorist Evgeny Pashukanis. ... It has been suggested that this article or section be merged with Commodity computing. ... Property designates those things that are commonly recognized as being the possessions of a person or group. ... A fruit stand at a market. ... The law of value is a concept in Karl Marxs critique of political economy. ... Simple commodity production (also known as petty commodity production; the German original word is einfache Warenproduktion) is a term coined by Frederick Engels to describe productive activities under the conditions of what Marx had called the simple exchange of commodities, where independent producers trade their own products. ... In Marxian political economy, any commodity, i. ... In Marxian political economy, exchange value refers to one of three major aspects of a commodity, i. ... Real prices and ideal prices refers to a distinction between actual prices paid for products, services, assets and labour, and computed prices which are not actually charged or paid in market trade. ... This article discusses buying gold as an investment. ... Trading Places is a 1983 comedy film starring Eddie Murphy, Dan Aykroyd and Jamie Lee Curtis. ...

External links