Capital begins with Karl Marx’s discussion of commodities. He defines a “commodity” as “a thing which through its qualities satisfies human needs of whatever kind” (125). Examples of commodities include paper or iron. The value of any commodity is determined by its quality (its characteristics) or by its quantity (how much there is of it).

There are two ways that the value of any given commodity is measured. The first is use value, which refers to how a commodity can fulfill a person’s needs or wants. The second is exchange value, which refers to how a commodity is traded and compared with other commodities. While a commodity’s use value comes out of the commodity’s characteristics, a commodity’s exchange value “changes constantly with time and place” and “appears to be accidental and purely relative” (126).

Marx argues that a commodity’s use value is completely separate from the exchange value. Specifically, something’s use value depends on its quality, while exchange value is determined by a commodity’s quantity. Marx states that the use value of a commodity is shaped by the labor put into creating or refining it.