A commodity is an object that has two values; a use value and an exchange value, or an appropriately determined value. If I have, for example, 20 kilos of coffee, I can either consume it for my own use, or exchange it for 20 meters of canvas, or for a suit, or for 250 grams of silver, if, instead of coffee, I need one of these three commodities.

The use value of a commodity is based on the actual qualities of the commodity itself, is meant to equal such qualities based on its qualities, and not any other needs. The use value of 20 kilos of coffee is based on the qualities of the coffee; these qualities being such that they make it clear to all that it is apt for us to drink, but they don’t enable us to clothe ourselves, or give us material for a shirt. It is for this reason that we are able to gain from the use value of 20 kilos of coffee, only if we feel the desire to drink coffee; but if instead we need a shirt, or to wear a suit that costs the use value of 20 kilos of coffee, we don’t know what to do; or, to say it better, we wouldn’t know what to do, if alongside the use value, there wasn’t, in the commodity, the exchange value. We in fact find another who has a suit, but who doesn’t need it, and needs coffee instead. Now one makes a trade right away. We give him the 20 kilos of coffee and he gives us the suit.

But does it follow that the commodities, while they differ completely between themselves because of their different qualities, that is for their use values, can be exchanged one for the other? We have already shown this.

Because, alongside the use value, there is also found an exchange value in the commodity. Now, the foundation of the exchange value, or the appropriately determined value, is the human labor needed for its production. The commodity is made by the worker; human labor is the life-force that gives it existence. All commodities therefore, although they’re different in quality, are substantially the same, because daughters of the same father all have the same blood in their veins. If 20 kilos of coffee are exchanged for a suit, or for 20 meters of canvas, it is indeed because the same amount of human labor is needed to produce 20 kilos of coffee as is needed to produce a suit, or 20 meters of canvas. Therefore, the value’s substance is human labor, and the size of the value is determined from the amount of human labor itself. The value’s substance is the same in all commodities; therefore it does not stand that they must be equal in size, because the commodities are, like expressions of value, all equal to one another, i.e., all able to be exchanged one for the other.

The size of the value depends on the amount of work; in 12 hours of work one produces a value double that which is produced in only six hours of work. Therefore, someone would say, the more one works and the longer one works, save for disability or for laziness, the more value is produced. Nothing is falser. Labor, which forms the substance of value, isn’t the work of a superhuman, but average labor, which is always the same, and that is rightly called social labor. This is that work, which, in a given center of production, can be averaged by a worker, who works with an average ability and an average intensity.

The dual nature of commodities known, being, that is, use value and exchange value, one will see that commodities can be born only by the work of labor, and by labor that is useful to all. Air for example, grasslands, virgin soil, etc. are useful to people, but don’t constitute any value to them, because they aren’t the products of work and, consequentially, aren’t commodities. We can make ourselves objects for our own personal uses, but which can’t be useful for others; in such a case we don’t produce commodities; even less we produce commodities when we work on objects, which do not have any usefulness either for us or for others.

Commodities, therefore, are exchanged for each other; the one, that is, that presents itself as the other’s equivalent. For the greater comfort of exchanges one begins to use always one given commodity as the equivalent; that which so steps out from the rank of all the others, to stand in front of them as a general equivalent; that is currency. Currency therefore is that commodity which, by custom and by legal sanction, has monopolized the position of the general equivalent. Thus has happened for us with silver. While before 20 kilos of coffee, a suit, 20 meters of canvas and 250 grams of silver were four commodities, which were exchanged indistinctly for one another, today instead you have that 20 kilos of coffee, 20 meters of canvas and a suit are three commodities, which are worth 250 grams of silver, i.e. 50 lire.

However, whether the exchange is done immediately from commodity to commodity, or the exchange is done by means of currency, the law of exchange always remains the same. A commodity can never be exchanged with another, if the labor that is needed to produce one is not equal to the labor that is needed to produce the other. This law must be kept well in mind, because above it is founded everything that we will afterwards.

With the arrival of currency, immediate or direct exchanges, commodity for commodity, end. Exchanges must all be done, from now on, through currency; so that a commodity that wishes to transform into another, must, first, from a commodity transform into currency, then from currency transform itself again into a commodity. The formula of exchanges, therefore, will not be a chain of commodities anymore, but a chain of commodities and currency. See here: