Commodity
An economic good with substantial fungibility traded in global markets.
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In economics, a commodity is an economic good with substantial fungibility, meaning the market treats all instances as equivalent regardless of who produced them.[1][2] Petroleum and copper are examples of commodity goods whose supply and demand form part of one universal market.[2]
Key facts and history
Karl Marx described a commodity's fungibility by noting that from the taste of wheat, one cannot tell who produced it.[2] In classical political economy, a commodity is an object or service produced by human labor that attains "use value" when found necessary or useful.[3] Adam Smith held that exchange value comprised rent, profit, labor, and wear-and-tear costs.[4] Through the development of society, individuals discovered they could exchange goods and services for other goods and services, and at that point these items became known as "commodities".[5]
Marx defined commodities as objects put up for sale or traded in a market, where "use value" does not aid in their sale.[5] Commodities are required to possess an "exchange value" that is demonstrated in the market.[6] David Ricardo altered this view by asserting that only labor constitutes the substance of exchange value.[4] Marx proposed "socially necessary labour time" as the correct foundation for determining a commodity's exchange value.[7]
Commodity super cycles are roughly decade-long intervals during which commodities trade above their long-term moving average, typically triggered by significant industrial transformation.[8]
What the cited sources add
A 2021 article in Institutional Investor notes that a weak dollar mechanically feeds into higher commodity prices.[9] The same article states that natural gas can act as a bridge fuel between coal and renewable energy.[9] It also reports that 2020 commodity bulls believe strong demand will come from changes in Western economies as well as emerging markets.[9] The article emphasizes that genuine commodity supercycles do not come around often.[9]
References
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: "Learn What Commodities Are in These Examples!"; "Commodity definition"; T., "What makes something a commodity?", The Economist, 3 January 2017 (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: "Learn What Commodities Are in These Examples!"; Karl Marx, "A Contribution to the Critique of Political Economy" contained in the Collected Works of Karl Marx and Frederick Engels: Volume 29, p. 270.; O'Sullivan, "Economics: Principles in action", Pearson / Prentice Hall, 2004 (we also read that source) en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: Karl Marx, "Outlines of the Critique of Political Economy" contained in the Collected Works of Karl Marx and Frederick Engels: Volume 28, 80.; Karl Marx, Capital, Volume I (International Publishers: New York, 1967) p. 38 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engel; Karl Marx, Capital, Volume I, p. 87 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 97.; Aristotle, Politica (Oxford, 1966) p. 1257.; Karl Marx, "Capital in General: The Commodity" contained i en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: Adam Smith, Wealth of Nations (Pelican Books: London, 1970) p. 153.; David Ricardo, Principles of Political Economy and Taxation (Pelican Books: London, 1971) pp. 56–58. (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: Karl Marx, Capital: Volume I p. 36 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 46. (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: Adam Smith, Wealth of Nations (Pelican Books: London, 1970) p. 131 and David Ricardo, Principles of Political Economy and Taxation (Pelican Books: 1971, London) (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: Karl Marx, Capital: Volume I, p. 39 and "Capital" as contained in the Collected Works of Karl Marx and Frederick Engels: Volume 35, p. 49. (original not read by us) en.wikipedia.org
- Wikipedia, "Commodity" (CC BY-SA 4.0), which cites: Spilker, "Are We Witnessing the Start of A New Commodities Super Cycle?", institutional investor, March 22, 2021 (we also read that source) en.wikipedia.org
- Spilker, "Are We Witnessing the Start of A New Commodities Super Cycle?", institutional investor, March 22, 2021. facts only, no text reused. institutionalinvestor.com
Each numbered sentence above was checked against the source it cites before publication. Sentences citing Wikipedia adapt text from the English Wikipedia article Commodity (contributors), used under CC BY-SA 4.0; this entry is available under the same licence. Other sources were used for facts only; no text or images are copied from them.
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Sources
Compiled from Wikipedia and the sources listed below. Text from Wikipedia is available under CC BY-SA 4.0; this entry is adapted from it.
- Wikipedia: Commodity (CC BY-SA 4.0).
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