Definition
A commodity is any tangible, movable good that is bought and sold, particularly one that is fungible — meaning individual units are interchangeable and indistinguishable from one another. The term carries distinct meanings depending on legal context:
1. General commercial law: Any movable article of trade or commerce — goods, wares, or merchandise capable of being bought, sold, or exchanged. In this sense, the term is broad and includes agricultural products, raw materials, manufactured goods, and natural resources.
2. Commodities trading and regulatory law: A specific category of goods — primarily agricultural products, energy resources, and metals — traded in standardized contracts on regulated exchanges. Under U.S. federal law, the Commodity Exchange Act defines "commodity" expansively to include not only physical goods but also financial instruments and, through regulatory development, certain digital assets. The Commodity Futures Trading Commission (CFTC) exercises jurisdiction over this category.
3. Constitutional and taxation law (historical): As used in certain state constitutions, particularly Massachusetts, the term has been interpreted to encompass anything that may be made the subject of taxation, including privileges and licenses to conduct particular trades or professions — reaching well beyond physical goods to cover the right to operate a business such as an auctioneer, tavern-keeper, or retailer of liquors.
Common Language
Modern common usage (Wiktionary): Anything movable that is bought and sold; raw materials and primary products traded on specialized exchanges; undifferentiated, fungible goods distinguished from branded products; anything with both use value and exchange value.
Historical common usage (Webster's 1913): That which affords convenience, advantage, or profit — especially in commerce, including everything movable that is bought and sold except animals. Earlier usage included the broader senses of convenience, benefit, and advantage, now largely obsolete.
Editorial note: The gap matters in two directions. First, ordinary usage tends to equate "commodity" with raw or undifferentiated physical goods (wheat, oil, copper). Legal usage — especially in regulatory and constitutional contexts — is far broader, extending to financial instruments, service licenses, and intangible privileges. Second, the older sense of "commodity" as personal convenience or advantage (still present in Webster's 1913) has no surviving legal application and can mislead researchers reading historical sources.
Common Confusion
Commodity vs. good vs. product: In everyday commercial law, these terms overlap substantially. The distinction sharpens in regulatory law: not every "good" is a "commodity" under the Commodity Exchange Act, and not every "commodity" in the CFTC sense is a physical object. Researchers should not assume that a court's use of "commodity" in a pre-20th-century source carries the same regulatory freight as the term in modern federal statutory interpretation.
Commodity vs. security: A persistent and consequential distinction in U.S. financial regulation. Whether a financial instrument — including a digital asset or derivatives contract — qualifies as a commodity (CFTC jurisdiction) or a security (SEC jurisdiction) determines which regulatory regime applies. The boundary is contested in litigation and rulemaking and should not be assumed settled.
Recognized Forms
/SUBTYPES
Agricultural commodities: Crops, livestock products, and related agricultural goods. The original core category under the Commodity Exchange Act.
Energy commodities: Crude oil, natural gas, electricity, and related products. Subject to overlapping CFTC and Federal Energy Regulatory Commission (FERC) jurisdiction in some contexts.
Financial commodities: Interest rates, currency, and index-based instruments traded in futures markets. The 1974 and 1982 amendments to the Commodity Exchange Act brought these within CFTC oversight.
Exempt commodities: A statutory category under the Commodity Exchange Act for goods that are neither agricultural nor financial — including metals and energy in certain trading contexts — subject to a different regulatory tier.
Digital asset commodities: Bitcoin and certain other cryptocurrencies have been characterized by the CFTC as commodities. The classification remains contested for other digital assets and is subject to ongoing regulatory and judicial development.
Why It Matters in Research
The term "commodity" is a research trap for precisely the opposite reason from most legal terms — it looks familiar and seems self-explanatory, but its legal scope shifts dramatically depending on era, jurisdiction, and subject matter.
Historical sources present the first hazard. Bouvier and Anderson use "commodity" in a broad common-law commercial sense that predates both modern commodities trading regulation and constitutional tax jurisprudence. When either source says the term includes privileges and business licenses for taxation purposes, they are describing a Massachusetts constitutional interpretation, not a general rule. Do not generalize this usage to other jurisdictions or other legal contexts without verification.
Federal regulatory sources present the second hazard. The Commodity Exchange Act's definition has expanded through successive amendments — 1936, 1974, 1982, and the Dodd-Frank Act of 2010 — and each expansion brought new categories within CFTC jurisdiction. A case or treatise interpreting "commodity" under the pre-1974 Act may be entirely inapplicable to financial instruments or digital assets. Always identify which version of the statute applies to the source you are reading.
Jurisdictional variation in state law is a third hazard. State commercial codes, consumer protection statutes, and tax codes each define "commodity" independently and inconsistently. A researcher working across jurisdictions should not assume a uniform meaning.
Finally, the commodity/security boundary is live and evolving. Researchers working in cryptocurrency, structured finance, or derivatives law must treat any source older than a few years with caution on this specific question.
Historical Dictionary Support
Bouvier and Anderson are in close agreement, with Anderson drawing directly on Bouvier's formulation. Both sources lead with the older, broader definition — convenience, privilege, profit, gain — before narrowing to the commercial meaning of goods, wares, and merchandise. Both sources then flag the Massachusetts constitutional interpretation as a notable expansion of the term's legal reach.
What the historical dictionaries miss is substantial. Neither Bouvier nor Anderson anticipates the modern regulatory structure of commodities markets, the CFTC, futures contracts, or financial commodities. Their entries are useful for establishing the baseline common-law commercial meaning and for the historical taxation context, but they are silent on the term's most consequential modern applications. Researchers should treat these entries as floor, not ceiling.
Webster's 1913 is instructive in documenting the transitional moment: the older sense of "commodity" as personal advantage or convenience is already marked as obsolete, while the commercial meaning of movable goods has become primary. This confirms that by the early 20th century, the personal-advantage sense had dropped out of active legal use.
Jurisdictional Note
In U.S. federal law, "commodity" is a term of art defined by statute and subject to CFTC regulatory authority; the definition has expanded materially over time and continues to evolve for digital assets. State law definitions vary and are generally narrower, focused on commercial goods. In constitutional taxation contexts, some states — Massachusetts being the historical example — have used the term expansively to include licensed occupations and business privileges.