From p. 145 in Social Theory Re-Wired 2e

The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.Capital is perhaps Karl Marx’s most precise piece of work. Here Marx gives us the concept around which his other ideas in Capital orbit: commodities. Commodities are those things that exist as objects to us that can be sold in exchange for other commodities. In the next few pages, Marx describes how the value of commodities is determined.

From p. 147 in Social Theory Re-Wired 2e

We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour-time socially necessary for its productionMarx gives us two types of value. All commodities have a use-value, which Marx defines simply as its utility. However, we cannot exchange commodities based on their utility alone. How would we trade a pair of shoes for an iPod, for example? Exchange-value, on the other hand, is all about labor. More specifically, Marx is saying that the exchange-value of a commodity is the amount of labor-time (whether it be hours, days, or months) it takes to produce the commodity. If two commodities require the same amount of labor time in their production (i.e.. if shoes and iPods both require two hours of labor-time to make), then they can be exchanged for one another.. Each individual commodity, in this connexion, is to be considered as an average sample of its class. Commodities, therefore, in which equal quantities of labour are embodied, or which can be produced in the same time, have the same value. The value of one commodity is to the value of any other, as the labour-time necessary for the production of the one is to that necessary for the production of the other. “As values, all commodities are only definite masses of congealed labour-timeThis is why Marx described commodities as “congealed labour-time.” However, unlike shoes and iPods, labor as a commodity can produce a higher value than what it is actually worth. How? When a worker sells his labor to a capitalist interested in making iPods, he is selling his ability to work. The capitalist, in return, purchases as much labor as is required to reproduce the iPod. But what if the capitalist is able to introduce a machine to reduce the amount of labor time to make an iPod by half but pays the worker the same wage? The iPod maker is now producing at half the rate of socially necessary labor; that is, the capitalist is now selling iPods worth a single hour of labor time at the original price of two hours. Or, a single hour of labor-time by the iPod worker can now be exchanged for two pairs of shoes. This is called the surplus and is the basis of exploitation. To “see” Marx explain this himself, take a look at this clip from Howard Zinn’s play, Marx in Soho..” 

From p. 148 in Social Theory Re-Wired 2e

A commodity appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological nicetiesHere is where Marx begins his critique of what he called the fetishism of commodities. According to Marx, commodities are worth nothing more than the labor it took to produce them. However, rarely do we think of commodities in this way. Rather, the things we buy and own oftentimes seem to have mystical qualities that extend far beyond their utility. For some fascinating examples of commodification with a specific eye toward gender, take a look at the popular blog Sociological Images.. So far as it is a value in use, there is nothing mysterious about it, whether we consider it from the point of view that by its properties it is capable of satisfying human wants, or from the point that those properties are the product of human labour. It is as clear as noon-day, that man, by his industry, changes the forms of the materials furnished by Nature, in such a way as to make them useful to him. The form of wood, for instance, is altered, by making a table out of it. Yet, for all that, the table continues to be that common, every-day thing, wood. But, so soon as it steps forth as a commodity, it is changed into something transcendent. It not only stands with its feet on the ground, but, in relation to all other commodities, it stands on its head, and evolves out of its wooden brain grotesque ideas, far more wonderful than “table-turning” ever was.Marx uses the example of a table to illustrate how something that is easily created to serve a function quickly takes on all kind of other “grotesque” meanings. A fantastic example of such “table-turning” is a scene in the film Fight Club in which Edward Norton’s character describes how his life has come to be defined by which items from the IKEA catalog he owned. You can watch the clip here. 

From p. 149 in Social Theory Re-Wired 2e

Whence, then, arises the enigmatical character of the product of labour, so soon as it assumes the form of commodities? Clearly from this form itself. The equality of all sorts of human labour is expressed objectively by their products all being equally values; the measure of the expenditure of labour-power by the duration of that expenditure, takes the form of the quantity of value of the products of labour; and finally, the mutual relations of the producers, within which the social character of their labour affirms itself, take the form of a social relation between the products.Marx is summing up how a commodity is fundamentally a social thing. A product is worth only as much as the labor somebody spent to produce it; the commodity is then given a value so that it can be purchased by somebody else in the marketplace; and the labor process itself starts as a relationship between a capitalist and a worker. 

A commodity is therefore a mysterious thing, simply because in it the social character of men’s labour appears to them as an objective character stamped upon the product of that labourMarx is once again reiterating that commodities do not appear to us as social relationships but rather as external objects with their own inherent properties. But with every whistle on the factory floor and cha-ching of the cash register, a social relationship made it happen. We might say that things have gotten more complicated since Marx was writing Capital, though. In a humorous but surprisingly poignant illustration, the Austrian arts collective Monochrom put together this short video on how Marx applies today (with sock puppets!). ; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour. This is the reason why the products of labour become commodities, social things whose qualities are at the same time perceptible and imperceptible by the senses …. There is a physical relation between physical things. But it is different with commodities. There, the existence of the things quâ commodities, and the value-relation between the products of labour which stamps them as commodities, have absolutely no connexion with their physical properties and with the material relations arising therefrom. There it is a definite social relation between men, that assumes, in their eyes, the fantastic form of a relation between things.In our introductory essay, “Salvaging What Wall Street Left Behind,” we describe how the social relationships behind the mortgage crisis became objectified as credit default swaps. You can read more about the early days of credit default swaps in this Time article from 2008.  In order, therefore, to find an analogy, we must have recourse to the mist-enveloped regions of the religious world. In that world the productions of the human brain appear as independent beings endowed with life, and entering into relation both with one another and the human race. So it is in the world of commodities with the products of men’s hands. This I call the Fetishism which attaches itself to the products of labour, so soon as they are produced as commodities, and which is therefore inseparable from the production of commodities.Marx seems to suggest that the fetishism of commodities is unavoidable in the capitalist mode of production. However, there are ways to potentially reduce or balance out our obsession with commodities. In this compelling TED talk, Rachel Botsman gives the case for collaborative consumerism.