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The Commodity Concept

EVEN IN THE GERMAN commercial code the term “commodity” is employed in the popular and not in the technical sense. Thus one sometimes finds “good” (Articles 365, 366, and 367), “object” (Articles 349 and 359), or “movable thing” (Articles 272, 301, and 342) used in place of the word “commodity.” Article 271 refers to “Commodities, or other movable things, or securities destined for trade . . .” Real estate and labor services are never considered to be commodities in the German commercial code. Firms are not included either. According to Article 23, firms, just like all other “res extra commercium,” cannot be commodities at all in a legal sense apart from the business bearing the firm name. In German commercial law, ships are not considered to be commodities (Article 67), but in several other codes they are looked upon as “movable things” and able to attain commodity character (see L. Goldschmidt, Handbuch des Handelsrechts, Erlangen, 1868, I, 527). Goldschmidt discusses the legal literature on the commodity concept (ibid., p. 525), but his own definition of the term is too narrow from the legal standpoint since he excludes goods kept ready for sale by producers (ibid., I, 298). In Roman legal sources, “merx,” “res promercalis,” “mercatura,” etc., are used sometimes in the narrower sense of objects of trade and sometimes in the wider sense of things that are offered for sale (L. 73, §4, Dig. de legat. 32,3; L. 32, §4, Dig. de aur. arg. 34,2; L. 1, pr. §1, Dig. de cont. emt. 18,1; L. 42, Dig. de fidejus. 46,1). The Austrian Civil Code distinguishes commodities from claims of debt (Article 991).

     With few exceptions, the theory of the commodity has not been independently treated by English, French, and Italian writers. The words “goods,” “marchandises,” “merci,” etc., are almost always used, not in the technical sense, but in the popular meanings of “articles of trade,” “purchasable goods,” etc., and in an extremely heterodox manner. Commodities have often been opposed to labor services and money (Jacques Necker, Sur la législation et le commerce des grains, Paris, 1775, pp. 52–53; Antonio Genovesi, Lezioni di economia civile, in Scrittori classici Italiani di economia politica, Milano, 1803–5, XV, 294). They have regularly been contrasted with immovable goods (Horace Say, “Marchandises,” in Ch. Coquelin and Guillaumin, eds., Dictionnaire de l’économie politique, Paris, 1873, II, 131), and have sometimes been pictured as products of industry in opposition to raw materials (François Quesnay, Max imes générales du gouvernement économique d’un royaume agricole, reprinted in E. Daire, ed., Physiocrates, Paris, 1846, p. 98) or to consumption goods (denrées), (Dutot, Réflexions politiques sur les finances et le commerce, ed. by Paul Harsin, Paris 1935, I, 72). On the other hand, Montesquieu uses the term “marchandises” in the sense of “denrées” (De l’esprit des lois, in Oeuvres complètes de Montesquieu, ed. by E. Laboulaye, Paris, 1877, V. 12.) Lewes Roberts, a contemporary of Thomas Mun, defines “the things wherewith the merchants negotiate and traffick” as “merchandises,” and divides “merchandises” into “wares” and “money” (The Merchants Map of Commerce, Third ed., London, 1677, pp. 6–7). The Dictionary of the French Academy (Institut de France, Dictionnaire de l’Académie Française, Sixth ed., Paris, 1835, II, 165) defines “commodities” as “ce qui se vend, se débite, soit en gros, soit en détail, dans les boutiques, magasins, foires, marchés, etc.”[2]

     On such occasions as a need for designating commodities in the wider scientific sense of the term has arisen, circumlocutions like the following are used: “Quantité à vendre” (Necker), “superflu autant qu’il peut être échangé” (Forbonnais), “things which have not reached the hands of those who are finally to use them” (Adam Smith), and “cio que soprabonda in alcuni per sussistere essi stessi, e ch’essi passano ad altri”[3](Ortes). Yet as early as 1776, E.B. de Condillac (Le commerce et le gouvernement, reprinted in E. Daire, ed., Mélanges d’économie politique, Paris, 1847, I, 261) defined “marchandises” as “ces choses qu’on offre d’échanger,” thereby becoming a precursor of Henri Storch who (writing in French) gives the following definition: “Les choses destinées à l’échange se nomment marchandises.” (Cours d’économie politique, St. Petersbourg, 1815, I, 82.)

     Among the German writers, Justi, Büsch, Sonnenfels, and Jakob still employ the word “commodity,” in its popular meaning. Julius v. Soden defines “commodities” as “all production materials” (Die Nazional-Oekonomie, Leipzig, 1810, IV, 96), and understands all raw materials and manufactured products to be included under “production materials” (ibid., p. 17). Gottlieb Hufeland’s definition is also too broad: “Waare [ist] alles . . . was . . . weggegeben, besonders für etwas anderes weggegeben, werden kann.”[4] (Neue Grundlegung der Staatswirthschaftskunst, Wien, 1815, II, 15). Karl H. Rau adopts the definition given by Storch when he defines commodities as “Vorräthe von Gütern, welche zum Tausche bereit liegen”[5] (Grundsätze der Volkswirthschaftslehre, Heidelberg, 1847, p. 164). He adds that land can be a commodity, and that although money is not a commodity as such, the materials of which it is made are commodities (ibid., p. 336 and p. 537). From Rau’s general view of the concept “good,” it is clear that he regards only material goods as commodities. Almost parallel with the views of Rau are those of Karl Murhard (Theorie des Handels, Göttingen, 1831, p. 22). Karl S. Zachariä (Vierzig Bücher vom Staate, Heidelberg, 1832, V, part I, 2) also extends the concept of commodity to include land, whereas Eduard Baumstark (Kameralistische Encyclopädie, Heidelberg, 1835, p. 450) confines the concept again to movable goods and furthermore demands that a good have a certain degree of marketability to be classed as a commodity. Thus he approaches the popular concept of a commodity which again becomes dominant in the works of Fulda, Lotz, Schön, and Hermann.

     A.F. Riedel and Wilhelm Roscher reestablish the scientific concept of commodity. Riedel defines a commodity as “die zum Tausch oder Verkauf bereit liegenden Güter”[6] (Nationalöconomie, Berlin, 1838, p. 336). Roscher says that a commodity is “jedes zum Vertauschen bestimmte Gut,”[7] but means “economic good” (Grundlagen der Nationalökonomie, Stuttgart, 1892, p. 227 and p. 4). The lead of these two authors is followed by H. v. Mangoldt (Grundriss der Volkswirthschaftslehre, Stuttgart, n.d., p. 45); by Karl Knies (“Ueber die Geldentwerthung und die mit ihr in Verbindung gebrachten Erscheinungen,” Zeitschrift für die gesammte Staatswissenschaft, XIV, 1858, 266) who defines commodities as “für den Verkehr überschüssige Gütern”;[8] by H. Rentzsch (Article “Waare” in Handwörterbuch der Volkswirthschaftslehre, Leipzig, 1870, p. 1042) who defines them as “Tauschwerthe und zum Tausch bestimmte Güter”;[9]  and in the main also by Leopold v. Hasner who elaborates the concept of “abstract trading stocks” which he divides into two chief subgroups, “commodity stocks” and “cash funds” (System der politischen Oekonomie,iPrag, 1860, pp. 288 and 302ff.).

     Among recent writers who adhere to the idea that commodities are products must be mentioned: J.C. Glaser, who defines a commodity as “jedes Product welches in den Handel kommt” (Die allgemeine Wirthschaftslehre, Berlin, 1858, p. 115); Hermann Roesler who defines commodities as “die für den Umlauf bestimmten oder im Umlauf befindlichen Producte”[10] (Grundsätze der Volkswirthschaftslehre, Rostock, 1864, p. 217); and H. v. Scheel, who applies the term commodities to “die einzelnen zum Tausch bestimmten Produkte”[11] (“Der Begriff des Geldes in seiner historisch-ökonomischen Entwickelung,” Jahrbücher für Nationalökonomie und Statistik, VI [1866], 15).

     L. v. Stein also uses the term commodity to mean “das einzelne Product der Unternehmung, als selbstständiges Gut dargestellt”[12] (Lehrbuch der Volkswirthschaft, Wien, 1858, p. 152). Currently, a considerable number of very respected scholars have returned to the use of the word commodity in its popular meaning. Among others are Bruno Hildebrand and A.E.F. Schäffle who contrast commodities with services (Bruno Hildebrand, “Naturalwirthschaft, Geldwirthschaft, und Creditwirthschaft,” Jahrbücher für Nationalökonomie und Statistik, II [1864], 14, and A.E.F. Schäffle, Das gesellschaftliche System der menschlichen Wirthschaft, Tübingen, 1873, II, 124–126). But the scientific concept of the commodity has not been lost. Schäffie sharply distinguishes between commodities in the popular sense and commodities in the scientific sense, and calls the latter “exchangeable material goods” (ibid., II, 142 and passim).

     Like many of his other theories, T.A.H. Schmalz’s doctrine of commodities is also very peculiar. Because of an erroneous conception of the relationship between money and commodities, he confuses commodities with consumption goods in the narrow sense of the term, and therefore arrives (Staatswirthschaftslehre in Briefen,Berlin, 1818, I, 63f.) at precisely the opposite of the scientific definition of commodity given in the present work.

[1]To Chapter VII. See notes 3 and 4 of Chapter VII.—TR.

[2]“what is sold or supplied, wholesale or retail, in shops, stores, at fairs, markets, etc.”

[3]“what is superfluous to a person for his support and which he passes on to others.”

[4]“A commodity is anything . . . that . . . can be given to someone else, especially in exchange for something else.”

[5]“stocks of goods that are kept ready for exchange.”

[6]“goods kept ready for exchange or sale.”

[7]“every good intended for sale.”

[8]“surplus goods intended for trade.”

[9]“valuables and goods destined for sale.”

[10]“products that circulate or are destined for circulation.”

[11]“the various products intended for trade.”

[12]each product of an enterprise appearing as an independent good.”

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