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Commodity: Difference between revisions
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A '''commodity''' is a simple element of a [[service economy]] which performs only very predictable services, e.g. [[gasoline]] which only really burns up in a | A '''commodity''' is a simple element of a [[service economy]] which performs only very predictable services, e.g. [[gasoline]] which only really burns up in a combustion engine. This simplicity makes it possible to define it as an undifferentiated [[product]] whose market value arises from the owner's right to sell rather than the right to use. Example commodities from the financial world include [[oil]] (sold by the barrel), [[wheat]], bulk chemicals such as [[sulfuric acid]] and even [[pork belly|pork-bellies]]. More modern commodities include [[bandwidth]], [[RAM]] chips and (experimentally) computer processor cycles, and [[negative commodity]] units like [[emissions credit]]s. | ||
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 inherent quality of it as a living organism as such. One can reasonably say that food commodities, for example, are defined by the fact that they substitute for each other in [[recipe]]s, and that one use the food without having to look at it too closely. | 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 inherent quality of it as a living organism as such. One can reasonably say that food commodities, for example, are defined by the fact that they substitute for each other in [[recipe]]s, and that one use the food without having to look at it too closely. | ||