Marx has explained that the commodity is a ‘two-fold thing’: both a useful thing and an exchange value in the market.
He goes on to look at this in more detail with examples:
Let us take two commodities such as a coat and 10 yards of linen, and let the former be double the value of the latter, so that, if 10 yards of linen = W, the coat = 2W.
The coat is a use value that satisfies a particular want. Its existence is the result of a special sort of productive activity, the nature of which is determined by its aim, mode of operation, subject, means, and result. The labour, whose utility is thus represented by the value in use of its product, or which manifests itself by making its product a use value, we call useful labour. In this connection we consider only its useful effect.
So, for the purpose of his critique, Marx sets up a basic, quantatitive exchange relation between a coat and a quantity of linen. Coats and linen are clearly useful things, and at this stage of the critique Marx is only considering the labour that produces the coat or the linen in terms of this use.
As the coat and the linen are two qualitatively different use values, so also are the two forms of labour that produce them, tailoring and weaving. To all the different varieties of values in use there correspond as many different kinds of useful labour, classified according to the order, genus, species, and variety to which they belong in the social division of labour. This division of labour is a necessary condition for the production of commodities, but it does not follow, conversely, that the production of commodities is a necessary condition for the division of labour.
Linen and coats are qualitatively different both physically and in that they are used in different ways, and produced in different ways, as are the many diverse commodities. This means that there is required many specific types of different labour to produce commodities, a great ‘division of labour’ carried out by independent workers doing specific tasks.
However, Marx points out that such production need not result in a division of labour into independant, individualised and seemingly self interested wage workers: there have been many examples in history of communities dividing labour among themselves to produce goods and meet their own direct needs (i.e. with no factory owner or other capitalist in sight).
Straight up, Karl! 