Cooking the Books 2 – What is a commodity ship?
On 29 July Reuters reported that ‘thirty-nine commodity ships passed through the Bab el-Mandeb strait’. A ‘commodity ship’, what is that? Presumably a ship that carries commodities, but what is a commodity? According to Reuters, the ships were all carrying either crude oil or chemical products made from oil.
If you look through a paper like the Financial Times you will come across a page which, alongside a list of share and bond prices, shows the prices of ‘commodities’; besides oil and natural gas, such products as coffee, sugar, cocoa and wheat.
According to Wikipedia, a commodity is
‘an economic good, usually a resource that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a commodity good is typically determined as a function of its market as a whole. (…) Most commodities are raw materials, basic resources, agricultural, or mining products, such as iron ore, sugar, or grains like rice and wheat. Commodities can also be mass-produced unspecialized products such as chemicals and computer memory. Popular commodities include crude oil, corn, and gold.’
In this sense, commodities are goods that have a single world price. The price of some of them is included in financial publications because financial capitalists speculate on how these prices move as well as on share and bond prices. The fact that their price is fixed by the world market puts countries which depend heavily on producing and selling them at the mercy of world economic forces, with dire consequences when the price falls.
This is a narrower use of the term than in the 19th century when a commodity meant anything useful that has been produced for sale on a market. This definition was shared by Marx. In fact the opening lines of Marx’s Capital are: ‘The wealth of societies in which a capitalistic mode of production prevails appears as an ‘immense collection of commodities’; the individual commodity appears as its elementary form. Our investigation therefore begins with the analysis of the commodity.’
As a commodity is something useful that has been produced for sale on a market, it has an exchange-value in addition to its use-value. Not all useful things are commodities, for example things produced directly to satisfy some need or want, such as food produced by farmers to satisfy their own needs or taken from them to satisfy the needs of some exploiting class. Under feudalism and previous class societies most wealth — useful things — was not produced as commodities.
The two definitions of a commodity are not necessarily incompatible as one can be seen as a subset of the other and closer to the ideal form. However, for Marxian economics all commercial cargo vessels are commodity ships.
In socialism, wealth will not take the form of commodities as it will not be produced for sale but directly for use, both by other workplaces to produce their product and by individuals to use and consume. Ships will still transport natural resources and agricultural products from the part of the world where they were extracted or grown to another part where they will be used but they won’t be commodity ships, just tankers and bulk carriers.