Economics Questions

Re: Commodities

Torsten — Wed, 02 Jul 2008 15:24:02 GMT

I don't claim that this is the Austrian definition by consensus.

A commodity would indeed be a divisible, material in which all parts are equal to each other in terms of specification.

Examples for commodities: are minerals like coal, iron ore, salt. fuels like crude oil and diesel, chemicals, food like grain, maize, sugar, cement, timber, steel etc. can also be seen as commodities. On a general note: Commodities are traded in large quantities, must be inside specifications and are used as raw ingredient in other processes.

Re: Commodities

ViennaSausage — Wed, 02 Jul 2008 00:22:21 GMT

I am curious too. The reason I ask is because a friend suggested that labor used to produce a commodity was also a commodity, but I beg to differ.

From the New Oxford American Dictionary:

commoditya raw material or primary agricultural product that can be bought and sold, such as copper or coffee.• a useful or valuable thing, such as water or time.

Re: Commodities

histhasthai — Tue, 01 Jul 2008 22:07:20 GMT

I don't know about the Ausrian sense, but I would define them as economically irreducible and fungible goods. Elemental metals, for instance, can't be broken down into other constituent goods, and any sample of them is the same as any other sample.

Manufactured goods, such as screws, are often considered commodities (the usual term is "commoditized"), in that one screw of the same size, thread pattern, etc is pretty much the same as any other. Commoditization is usually brought up in the context of goods for which the market price is reduced as far as it can go toward the cost of raw materials, labor, and minimal sustainable profit margin, as opposed to goods that can command higher prices through quality differentiation against other goods of the same kind. Mature technology hardware is becoming commoditized in this sense, such as basic computers, televisions, etc., that don't have the latest features but are still being produced. The latter usually is reducible, in that it can be salvaged for the content of various materials it contains, so that is stretching the definition a bit.

I'm interested as well in what the actual Austrian definition is. I wouldn't be suprised if at least some part of what I wrote above comes close.

Commodities

ViennaSausage — Tue, 01 Jul 2008 19:09:14 GMT

What is a commodity in the Austrian sense? Is it the materials that are used to produce capital/consumer goods? Is it capital/consumer goods itself? Is it a service?

On a side note, I doubt a commodity (in the Austrian sense) would be the labor utilized to create a good.