In the “Preface to the First German Edition” of Volume 1 of Capital, published in 1867, Karl Marx tells us that the opening sections of his book will be the most difficult to understand. In order to critique political economy of capitalism Marx felt it necessary to scrupulously analyze its manifestations, apart from the traditional approximations of his predecessors. Marx more accurately says that “…in bourgeois society the commodity-form of the product of labor—or value-form of the commodity—is the economic cell-form.” That is to say, to have a thoroughgoing account of the political economy of capitalism, we must go to the cellular level, i.e. the commodity of bourgeois society. In this brief essay we will attempt to describe Marx’s concept of the commodity, including the forms and origins of value associated with it, as well as how it is said to be fetishized.
Commodities are an elemental form of capitalism, which is why Marx starts his analysis of capital with them. Human beings produce things. At the most basic level commodities are products of human labor that are exchanged with other people in a capitalist economy. Marx begins his examination of commodities with the kinds of value they come to represent in relationships of capitalist exchange. His first distinction is to show that a commodity has two different values contained within it. Most fundamental is use-value. Use-value is a direct and clear embodiment of a product’s value. Use-value is another way of thinking about a product’s inherent physical utility. Bread has the use-value of food. A coat has the use-value to clothe. The use-value of such products depends on what the object actually is and how it is consumed. Something of use-value does not have to be a commodity. I give you an orange. A mother provides useful things for her family. These value exchanges do not make the products into commodities, but commodities must be useful in some way. Also the use-value of an object has to do with its qualitative value. In this way, an object’s material qualities help define how it will be used and exchanged.
Marx then talks about value as exchange-value, which is not entirely reliant on the object’s use-value. This idea has more to do with how products are exchanged and the labor invested in them. Exchange-value is connected to what a product is exchanged for. Basically commodities are (or can be) exchanged for other things (including money). Within a capitalist economy any commodity has a quantitative equivalency that can be exchanged for other commodities—“1 quarter corn = x cwt. iron.” If a product’s exchange-value is not exclusively reliant on its use-value, then what else (other than its exchangeability) does the product contain that imparts value? Marx reminds us that commodities are born from the hands of human labor. Products are a “congelation of homogeneous human labor.” Commodities contain labor. Human labor imparts most of a product’s exchange-value over and above a product’s inherent utility (use-value).
Although a product’s exchange-value is dependant on the labor congealed within it, sheer labor is not the sole determining factor in the product’s value. There is what Marx terms: “socially necessary” labor, this means that if someone takes a long time to produce something, it doesn’t entail that the object is automatically more valuable. Socially necessary labor is more of a socially mediated way of determining the particular value of products. In other words, there is an average socially determined rate by which the exchange-value of products is mediated. We won’t pay more for a commodity if the average price for a comparable commodity is much lower (no matter how many labor hours it took to produce it). Labor in this socially necessary way is quantified. It is measured against all other equivalent labor. Also, when labor is regarded in this generalized sense, without qualitatively comparing specific types of equivalent labor (e.g. tailoring versus weaving, &c.) it is considered by Marx to be “abstract labor.”
Given that the socially necessary labor is relative to market conditions, a product’s exchange-value continues to be related to the difficulty or ease it took to produce it. If diamonds are considerably more difficult to procure then brewing a cup of tea, then diamonds are automatically more valuable, not necessarily only due to their use-value, but more due to the difficulties involved in their procurement. Abstract-labor then is closely locked to the socially-necessary exchange-value of commodities.
Marx, apparently, was the first to notice that labor also had a two-fold nature. Labor has one side, a useful concrete aspect which is used to create useful things, and another side, the abstract side of labor, where most of a commodity’s exchange-value stems from (including surplus-value, a.k.a. profits). Marx may have also been the first to notice how profits manifest from abstract-labor. But how does this happen? Profits are surplus-value. Labor is a very special type of commodity, since it creates value above wages earned. For example, in an average workday, the wages earned, say for the first four hours, is what the worker needs to live on, however the rest of the time the worker is producing surplus-labor that goes beyond what she’s paid for—that is to say the rest of the day is spent creating surplus-value for the bourgeois capitalist. The capitalist only pays an agreed upon wage, but the worker’s labor exceeds that predetermined value (surplus-labor). Hence, the capitalist is rewarded with an excess surplus-value as a result of the worker’s surplus-labor. Surplus labor is easily exploited (implementation of productivity quotas, longer hours, less pay, &c).
Lastly, Marx was also keen to recognize the phenomenon of the “fetishism of commodities and the secret thereof.” Like some forms of religious practice, objects are conferred with mystical properties that are not inherent in the objects. In a capitalist system commodities are also conferred with metaphysical properties that are socially and culturally instilled, “…the social character of men’s labor appears […] as an objective character stamped upon the product of that labor…” In short, we forget that the exchange power of commodities have to do with the base of human labor that created them—instead, we tend to focus more on commodities as relations among mere things (which also leads to reification, i.e. ‘thing-ification’). Things (commodities) become more important than the human work used to produce them. The importance of the phenomenon of fetishization leads us, in a capitalist society, to place more importance on quantities over qualities.
 Karl Marx, “Preface to the First German Edition, Volume One” of Capital, Robert C. Tucker ed. in The Marx-Engels Reader, New York, NY: W.W. Norton and Co, Inc., 1978, 295.
 Marx, Capital in The Marx-Engels Reader, 304.
 Marx, Capital in The Marx-Engels Reader, 305.
 Marx, Capital, in The Marx-Engels Reader, 306.
 Marx, Capital in The Marx-Engels Reader, 305.
 “I was the first to point out and to examine critically this two-fold nature of the labor contained in commodities.” Marx, Capital in The Marx-Engels Reader, 308.
 See Jonathan Wolff’s subchapter “The Economics of Capitalism,” in Why Read Marx Today? New York, NY: Oxford University Press, 2002, 66-81.
 See Chapter VII, “The Labor-Process and the Process of Producing Surplus-Value” Marx from Capital in The Marx-Engels Reader, 344-361.
 Marx, Capital in The Marx-Engels Reader, 319.
 Marx, Capital in The Marx-Engels Reader, 320.
 See Georg Lukács, “Reification and the Consciousness of the Proletariat, I,” from History and Class Consciousness: Studies in Marxist Dialectics, trans. by Rodney Livingstone, Cambridge, MA: MIT Press, 1971, 83-110.
Balibar, Etienne. The Philosophy of Marx. Translated by Chris Turner. New York, NY: Verso, 2007.
Bottomore, Tom, ed. A Dictionary of Marxist Thought. Cambridge, MA: Harvard University Press, 1983.
Lukács, Georg. “Reification and the Consciousness of the Proletariat, I.” From History and Class Consciousness: Studies in Marxist Dialectics. Translated by Rodney Livingstone. Cambridge, MA: MIT Press, 1971, 83-110.
Tucker, Robert C. ed. The Marx-Engels Reader. New York, NY: W.W. Norton and Co., Inc., 1978.
Wolff, Jonathan. Why Read Marx Today? New York, NY: Oxford University Press, 2002.