The word commodity is a term with distinct meanings in business and in Marxian political economy. For the former, it is a largely homogeneous product, whereas for the latter, it refers generically to wares offered for exchange.
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...
Business usage
Definition
In the world of business, a commodity is an undifferentiated product whose value arises from the owner's right to sell rather than the right to use. In other words a commodity is something that can be bought or sold on an open market. Example: commodities from the financial world include oil (sold by the barrel), electricity (most users of electric power are only concerned with overall energy consumption; only a minority of users are concerned with the quality and technical details of voltage and frequency deviations, phase imbalance, etc.), music (an intellectual property) can be bought and sold through many formats especially digitally, 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.
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.
Commodities exchanges include:
Microeconomists also include labor, and currency as commodities that can be bought and sold...
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