Principles of Economics by Carl Menger Chapter 7.1 - What is a Commodity?

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What is a commodity, really? In this video, we explore Carl Menger’s Principles of Economics, Section 7.1: The Concept of the Commodity in Popular and Scientific Terms.
In early, self-sufficient economies, families produced everything for themselves. Goods weren’t traded—they were used directly. But economic development begins when people start offering their labor and products in exchange for others. This leads from home-based production to workshops, and eventually to mass production and ready-made goods.
In daily language, “commodity” usually refers to movable, physical goods made for sale. But Menger explains that in economics, a commodity is not defined by what the good is—but by how the owner treats it. A good becomes a commodity only when it’s intended for exchange. Once it’s kept for personal use, it ceases to be a commodity—even if it’s the exact same object.
This concept reveals a deeper truth: being a commodity is not a permanent trait. It’s a temporary status, tied to a good’s place in the exchange process. A hat in a shop is a commodity; that same hat, once worn, becomes a consumer good. Even precious metals lose their commodity status if melted for private use.
Menger’s insight clarifies why ownership intentions matter in economics—and helps distinguish between goods in circulation and goods in use. Understanding this shift is key to grasping the flow of value through an economy.

❓ Questions This Video Answers:
-What is a commodity in economics?
-How does a good become a commodity?
-Can a commodity lose its status?
-What role does ownership intention play in defining commodities?
-How did early economies evolve into trade economies?
-What’s the difference between popular and scientific definitions of commodities?
-Why does a consumer good differ from a commodity?
-How do mass production and trade change how we value goods?
-What’s the lifecycle of a commodity in the market?
-Can the same item shift between commodity and consumer good?

00:00 - Introduction to What is a Commodity
00:11 - Goods in a Self-Sufficient Economy
00:52 - The Evolution of Economic Systems
02:05 - Defining Commodities: Popular VS scientific Terms
03:01 - Practical Examples
03:52 - Outro

#CommoditiesExplained #EconomicGoods #CarlMenger