(Image Source: A Companion to Marx’s Capital, David Harvey)
The commodity (an “external object … which through its qualities satisfies human needs of whatever kind” (Capital vol.1, p125, Penguin Edition) is the foundation by which capitalism should be understood, as capitalism is on the most basic level based around generalised commodity production, whereby “the wealth of societies … appears as an ‘immense collection of commodities’” (Capital, vol.1, p125).
The commodityhas a dual-character: it is made up of both use-value and exchange-value. The use-value of commodities is heterogenous, meaning that they are differentiated from one another - for example, the use-value of a broom is different to the use-value of a shirt, etc. The exchange-value of commodities is homogenous by the fact that the exchange-value of a broom can be directly related to the exchange-value of a shirt (ie, the two can be exchanged on a quantitative level - ie x brooms = y books). The use-value is therefore a qualitative value whereas the exchange-value is a quantitative value.
These two forms of value can be understood in a unity as value. This value is determined by the level of socially-necessary labour time involved in the production of the commodity. This value is what gives exchange-value its homogeneity, and is recognised through the virtue of the commodity’s being of a use-value to someone (ie somebody needs or desires the commodity - if the commodity is not wanted or desired, it has no use value and thus cannot realise its exchange value).
Value, as socially-necessary labour time, also has a dual-character, then. Labour consists of both concrete labour and abstract labour. Concrete labour is, in the same way as use-value, heterogenous and qualitative through the fact that it involves differentiated products, commodities, techniques, materials, etc. Abstract labour is, instead, in the same way as exchange value, homogenous and quantitative. It produces value not by virtue of what or how it produces, but by virtue of simply being an expenditure of human labour. Commodities are directly exchangeable as a result of their common attribute of containing human labour in the abstract.
Abstract and concrete labour come together at the moment of exchange. Exchange being the way in which value can be expressed.
Through the act of exchange, value is expressed in both the relative form of value and the equivalent form of value. In exchange, one commodity will always represent the relative form while another the equivalent. One commodity always expresses its value in another commodity - this commodity’s value is represented as the relative form of value, whereas the second commodity (in which the first is being represented) acts as the equivalent of the first, and so is the equivalent form.
In the development of commodity exchange, a particular commodity comes to be expressed as a universal equivalent - that is, a commodity in which the value of all other commodities can be expressed as relative to it. This universal equivalent (generally gold or other precious metals) is known as the money commodity.