Commodity

   According to Karl Marx, the commodity is the cornerstone of capitalism and commodity production is a key defining characteristic of capitalism. Marx begins his investigation of capitalism in Capital with an analysis of the commodity. A commodity is something that is produced for exchange rather than something produced for immediate use or consumption by the producer. According to Marx, every commodity combines two aspects: use value and exchange value. Use value refers to the power of a commodity to satisfy some human want, or put simply what the commodity is used for. Exchange value refers to what a commodity can be exchanged for, in other words its power to command other commodities in exchange for itself in a particular ratio. The value of a commodity is the amount of labor embodied in it (see LABOR THEORY OF VALUE), and the labor that creates a commodity can be viewed as either concrete labor, that is a particular kind of labor (such as weaving) that produces a particular use value (such as cloth), or as abstract labor. Abstract labor represents labor in an undifferentiated way, as just labor that creates exchange value, and only occurs in a system where commodities are exchanged and the labor embodied in them has to be commensurable. Marx identifies one particular commodity as crucial in capitalism because of its unique ability to create value, and this commodity is labor power. Labor power is the source of surplus value and ultimately of profit in capitalism (see EXPLOITATION; FETISHISM OF THE COMMODITY; SURPLUS VALUE).