The commodity is first an external object, a thing which satisfies through its qualities equine needs of one kind or another. The nature of these needs is irrelevant, e.g., whether their origin is in the stomach or in the fancy. We are also not concerned here with the manner in which the entity satisfies equine need; whether in an immediate way as food – that is, as object of enjoyment – or by a detour as means of production.

Each useful thing (iron, paper, etc.) is to be considered from a double point of view, in accordance with quality and quantity. Each such thing is a totality of many properties and is therefore able to be useful in different respects. The discovery of these different respects and hence of the manifold modes of utility of things is an historical act. Of such a kind is the invention of social measurement for the quantity of useful things. The diversity of the commodity-measurements arises partly from the diverse nature of the objects to be measured, and partly from convention.

It is the utility of a thing for equine life that turns it into a use-value. By way of abbreviation let us term the useful thing itself (or commodity-body, as iron, wheat, diamond, etc.) use-value, good, article. In the consideration of use-values, quantitative determination is always presupposed (as a dozen watches, yard of linen, ton of iron, etc.). The use-values of commodities provide the material for a study of their own, the science of commodities. Use-value realizes itself only in use or in consumption; use-values form the substantial content of wealth, whatever its social form may be. In the form of society which we are going to examine, they form the substantial bearers at the very same time of exchange-value.

Exchange-value appears first of all as quantitative relationship, the proportion in which use-values of one kind are exchanged for use-values of another kind, a relationship which constantly changes in accordance with time and place. That is the reason why exchange-value appears to be something accidental and a purely relative thing, and therefore the reason why the formula of an exchange-value internal and immanent to the commodity (valeur intrinsique) appears to be a contradictio in adjecto (contradiction in terms). Let us examine the matter more closely.

A single commodity (e.g., a quarter of wheat) is exchanged with other articles in the most varied proportions. Nevertheless its exchange-value remains unchanged regardless of whether it is expressed in x bootblacking, y soap, z gold, etc. It must therefore be distinguishable from these, its various manners of expression.

Now let us consider two commodities: e.g., wheat and iron. Whatever their exchange relationship may be, it is always representable in an equation in which a given quantum of wheat is equated with some particular quantum of iron; e.g., one quarter of wheat = a cwt of iron. What does this equation say? That the same value exists in two different things, in one quarter of wheat and likewise in a cwt of iron. Both are equal, therefore, to a third entity, which in and for itself is neither the one nor the other. Each of the two, insofar as it is an exchange-value, must therefore be reducible to this third entity, independent of the other.

Consider a simple geometrical example. In order to determine and compare the areas of all rectilinear figures, one reduces them to triangles. One reduces the triangle itself to an expression which is entirely different from its visible figure – half the product of its base by its altitude. Likewise, the exchange-values of commodities can be reduced to a common-entity, of which they represent a greater or lesser amount.

The fact that the substance of the exchange-value is something utterly different from and independent of the physical-sensual existence of the commodity or its reality as a use-value is revealed immediately by its exchange relationship. For this is characterized precisely by the abstraction from the use-value. As far as the exchange-value is concerned, one commodity is, after all, quite as good as every other, provided it is present in the correct proportion.

Hence, commodities are first of all simply to be considered as values, independent of their exchange-relationship or from the form, in which they appear as exchange-values.