Exchange v Use Value

Note: commodities are only commodities if you are exchanging them. If you do a service for yourself, like fixing your own roof, that's not a commodity, but if you do it for your neighbor and receive something in exchange, then it is.

Commodities have two values: their use value and their exchange value.

The use value is the basically the usefulness of the object or service. For example the use value of an apple would be the calories and nutrients you get form eating it. The exchange value is the value of what you exchange to get that particular object or service. So the exchange value of an apple might be $1.00. But money itself isn't actually worth anything (unlike the apple); money only has value because we all agree it does making it a social construct.

Money is our 'universal equivalent' representing the value behind the exchange. Instead of bartering equally useful items, money takes the form of that equivalence. However, money in fact hides the real equivalent behind the exchange: labor. The more labor it takes to produce a product, the greater its value. Marx therefore concludes that "As exchange-values, all commodities are merely definite quantities of congealed labour-time". Marx goes on to suggest that by having money serve as the universal equivalent in capitalist society, we forget the real labor of the worker that undergirds the production of goods and services, according to Marx. In the equivalent form, real private labor "takes the form of its opposite, namely labour in its directly social form" (See Fetishism).

So under capitalism commodities have use-value and exchange-value but they are produced for the purpose of exchange, or profit. This leads to all sorts of dystopian stuff, like price gouging and selling medicine at inaccessible prices, and stifles innovation (see profit motive).

Under socialism commodities are produced solely to satisfy human wants and needs instead of for profit; this is the idea of abolishing commodity production.

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