Simple commodity production

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Simple commodity production (German: einfache Warenproduktion, also translated as petty commodity production), is a term coined by Friedrich Engels in 1894 when he had compiled and edited the third volume of Marx's Capital. It refers to productive activities under the conditions of what Karl Marx had called the "simple exchange" or "simple circulation" of commodities, where independent producers trade their own products to obtain other products of (approximately) equivalent value. The use of the adjective simple is not intended to refer to the nature of the producers or of their production, but rather to the relatively simple and straightforward exchange processes involved, from an economic perspective. As discussed below, both Karl Marx and Engels claimed explicitly that the law of value applied also to simple exchange, and that the operation of this law is modified (or, as Marx sometimes says, "inverted") by merchant capitalism and the capitalist mode of production in which most of the inputs and outputs of production (including means of production and labour power) become tradeable commodities. Many classical economists were aware of differences between simple commodity exchange and capitalist exchange, but they could not adequately explain the historical transformation of the one into the other. Sometimes their theories confused capitalist commodity trade with simple commodity trade. According to Marx and Engels, simple commodity production and trade existed for millennia before the advent of industrial capitalism. From the beginnings of the bourgeois epoch in 15th century Europe, the reach and scope of commodity production began to grow incrementally, although sometimes this process was interrupted by wars, epidemic diseases, power relations and natural disasters. Only with the growth of free wage labour is commodity production generalized (verallgemeinert) to most of the economy, and fully integrated into national and international markets. Obviously, this market growth also required institutions, conventions...