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exchange, mutual transfer of goods, money, services, or their equivalents; also the marketplace where such transfer occurs, such as a stock exchange or a commodity exchange (see commodity market). In early human society, exchange of unessential articles, such as jewelry, was common, but no group could afford to rely on another group for the necessities of life. Gradually, division of labor led to the barter economy, in which articles were produced for exchange. Modern capitalistic society, although an outgrowth of the exchange economy, is no longer based on exchange. Strict exchange depends on barter; in modern society the money and price system—in which goods and services are produced in exchange for specified amounts of a standard currency—has largely replaced barter, except for limited arrangements done on a local basis (such as within a town or village). Broadly, the term is now used to signify exchange of goods and services for money. The price of the various factors in exchange is determined by their supply and market demand. Conversion of one country's currency into that of another by means of still others is called arbitrage or arbitration of exchange. The term exchange also refers to the amount of money necessary to buy a given amount in a foreign country, usually for the foreign exchange of goods and services.
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  1. the transfer of economic goods or services, whether by trading or by other means.
  2. any process in which people in their everyday social relations gain mutual benefit.
  3. any social interaction that may have as one aspect an exchange of goods or services, but which also serves the purpose of social bonding (see GIFT EXCHANGE AND GIFT RELATIONSHIP). In simple societies there are generalized patterns of exchange of a variety of goods and services (including, for example, ceremonial goods or even marriage partners), in which the givers do not themselves immediately receive directly from those to whom they give. In their various manifestations, these forms of exchange can be seen as not only, or even primarily economic; rather they reinforce established social relationships, e.g. enhancing the prestige of the giver. see also KULA RING.
  4. any social interaction which can be interpreted as involving reciprocal benefits or exchanges’, e.g. relationships between superordinates and subordinates (even master and slave), as well as relationships involving mutual affection and love. see also EXCHANGE THEORY.
Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.



the contemporary and most developed form of a regularly functioning wholesale market for mass quantities of negotiable commodities sold according to standards (established grades and qualities), and sometimes by sample (grain, sugar, wool, cotton, coffee, rubber, metals); also, a market for negotiable securities (stocks, bonds) and foreign currency.

There are commodity, stock, and currency exchanges. The beginnings of commodity and draft (currency) exchanges (trading in drafts) appeared in the 15th and 16th centuries in the Italian Mediterranean cities of Venice, Genoa, and Florence, where manufacturing had sprung up; in these cities and in Bruges (Low Countries) a broad foreign trade developed. In Bruges, merchants from various countries gathered at a square near the house of a noted money changer and broker, van der Beurs (whose coat-of-arms consisted of three purses; hence the word “Beurs,” from Late Latin bursa, meaning purse), for the buying of foreign drafts and the exchange of trade information.

The Amsterdam Exchange was established at the beginning of the 17th century (1608); there mainly the royal bonds and shares of the Dutch East India Trading Company and British East India Trading Company were quoted. An exchange was also created for trading in colonial commodities. The Royal Exchange (commodities and drafts) arose in London in the 16th century (1566); at the end of the 17th century the London Stock Exchange began operations. In New York, the Stock Exchange was established unofficially at the end of the 18th century and officially at the beginning of the 19th.

In Paris, Berlin, and Vienna, exchanges were organized in the 18th century. The flowering of exchanges took place in the second half of the 19th century and was linked with the development of capitalist production; with growth in the volume of trade, transport, and communications (commodity exchange); and with the broad development of stock companies (stock exchange).

The stock exchange The stock exchange fulfills an important economic function in capitalist countries. Through it, funds are mobilized for investment in the fixed capital stock of industry, leading to an enormous centralization of capital. The shares and bonds of stock companies, and also bonds of the state, are bought and sold on an exchange. State bonds provide funds with which the state covers budget deficits. In a period of general crisis for capitalism, the relative proportion of domestic state bonds grows in the sum total of securities quoted on the exchange.

The rates (price levels) of securities take shape on an exchange. These rates are a sensitive barometer of any changes in the economic and political life of one or another capitalist country. Rates fall sharply in years of crises and unfavorable circumstances, and conversely they rise in periods of revival and upsurge in production. A general fall in the rates of securities is called a stock market crash.

Financial magnates always win on the exchange, and the small and average capitalists lose. The bosses of monopolies, who control production, find out sooner than others of the impending fall or rise in production, the decrease or increase in dividends, and the fall or rise in the rates of securities. Buying securities at low rates and selling them at high rates, monopolists obtain a substantial market profit. Up to the 1860’s, the stock exchanges did not play a large role. Most securities were state bonds, and joint-stock companies were few. From the 1870’s, joint-stock companies grew quickly and became the main form of capitalist enterprise, with shares becoming the leading types of securities quoted on stock exchanges.

After World War I (1914–18), the USA took the lead in the world’s capitalist economy, and the New York Stock Exchange took on a leading role. The value of shares quoted on this exchange, toward the end of 1967, was over $600 billion; at the same time on the second biggest, the London Stock Exchange, values totaled about $200 billion. The New York Stock Exchange and the London Stock Exchange quote the shares of the largest enterprises, companies that account for three-quarters of the industrial production of these countries. Large stock exchanges function in Paris (more than $20 billion in 1967), Frankfurt am Main (about $18 billion in 1967), Basel, and other cities.

The organization of an exchange is varied, but basically there are two types: an open exchange, accessible to all trading in the market and under the supervision of the state (Austria, France, and others); and an exchange as a closed corporation for its traders, accessible only to its members and free from interference from the state (Great Britain, USA). Access to the latter is conditioned by property qualifications, recommendations of several older members of the exchange, and a vote. The administrative organ of an exchange, the exchange committee (in the USA, the board of directors), is selected from its membership. Within it is the so-called admissions commission, which decides questions concerning the admission of new securities. It takes measures to prevent the admission of securities of small- and medium-sized companies to the official exchange. Many countries have unofficial exchanges, sometimes called over-the-counter exchanges, where any securities may be quoted.

The masters of monopolies are, as a rule, members of the exchange, and the exchange committee is made up of their henchmen. That is why obstacles are placed in the way of those desiring to become members of the exchange. Membership on the New York Stock Exchange costs $200,000. Furthermore, it is imperative to provide several recommendations from older members of the exchange. In the USA, in 1968, there were fewer than 1,400 members on the exchange. Members of the exchange are subdivided into exchange middlemen (traders and brokers) and dealers, who speculate in securities for their own account. The general public participates in exchange operations through brokers. The most prominent capitalist banks have their own brokers. In order to publicize information concerning the quantity of securities sold and their prices, the exchange committees include quotation commissions that publish daily price bulletins.

Despite the expansion of operations, the volume of which has grown enormously, the independent role of the exchange in the epoch of imperialism has diminished. Securities operations are concentrated in the large banks, which distribute these securities among their clients.

In premonopolistic capitalist conditions, stock exchanges also included currency exchanges where foreign currency was sold and bought. Under imperialism, transactions in foreign currency and gold almost wholly pass through the hands of the banking monopolies.

The commodity exchange The commodity exchange is a wholesale market where negotiable raw materials and foodstuffs are traded. All products are sold according to samples or to standards which list the specifications (quality, grade). In the USA, the New York and Chicago exchanges are considered to be world trading markets; and in Great Britain, the London and Liverpool commodity exchanges have this role. New York has specialized exchanges for cotton, coffee, sugar, cocoa, and others; Chicago is the leading grain exchange center. On commodity exchanges, not only are physically existing commodities bought and sold but also commodities which have yet to be produced (for example, wheat of a future harvest), which leads to the swelling of exchange turnover.

Under state and monopolistic capitalism, the government, especially in the USA, utilizes its resources to create reserves of exchange commodities (in particular, strategic raw materials) and to influence prices—for example, in order to decrease prices of raw materials produced by developing countries. In these circumstances, individuals associated with the government, knowing that such measures are to be taken, play through their dummies on the exchange and make enormous profits. Under the domination of monopolistic prices, the role of commodity exchanges has lessened because an exchange can function only when conditions permit freely vacillating prices.

Transactions in securities (and also in commodities and foreign currencies) executed on an exchange are classified either as cash trades, in which case payment is made immediately or in two or three days, or term trades when the transfer of the shares (or the commodity) and payment are effected in a stated period, usually within a month. Term transactions are of a rather speculative nature because, as a result of the differences in the rates of exchange or in prices, one participant in the transaction becomes richer at the expense of the other between the moment the transaction is executed and the moment the account is settled. If the loser pays only the difference that is lost without transferring the security, then the transaction is called “a play on the difference.” Substantial sellers of shares, gambling on a decrease in the price of a share, are called shorts (“bears”), and buyers gambling on their increase are called longs (“bulls”). Capitalist banks not only provide credit for exchange speculation by giving exchange traders loans on shares as collateral but also themselves actively participate in this speculation, buying securities and reselling them at a much higher price.

In prerevolutionary Russia, the first commodity and currency exchange was officially opened in 1703 in St. Petersburg. Most exchanges were organized in the second half of the 19th century (in 1914, there were 115). The most important was the St. Petersburg Exchange, which had commodity and stock departments. It quoted 312 different types of shares worth 2 billion rubles, as well as state bonds and state-guaranteed loans. Major St. Petersburg banks played the most important role on the exchange. At the beginning of World War I (1914–18), the official exchanges were closed, but the black market exchanges continued to function.

In the USSR, transactions in securities were forbidden in December 1917, and in January 1918 bonds covering tsarist borrowing were annulled. Exchanges existed from 1921 to 1930 and were organs for state regulation of the market in the multilayered economic structure. The overwhelming majority of exchange members were socialist enterprises and institutions. In 1923 stock departments were organized at the commodity exchanges, which effected transactions in foreign currency and state securities and in shares of joint-stock and other companies permitted by law. The number of exchanges in the USSR reached 100. In 1930, as a result of the liquidation of the multilayered features of the country’s economy and the strengthening of planning principles, exchanges became unnecessary, and so they were closed.


Marx, K. Kapital, vol. 2, book 2. In K. Marx and F. Engels, Soch., 2nd ed., vol. 24, ch. 17.
Marx, K. Kapital, vol. 3. Ibid., vol. 25, part 1, ch. 27; vol. 25, part 2, chs. 30,32, and appendix 2, the article “Birzha” by F. Engels.
Marx, K. “Ekonomicheskie rukopisi 1857–1859 gg.,” ch. 1. Ibid., vol. 46, part 1, pp. 231–33.
Lenin, V. I. “Imperializm, kak vysshaia stadiia kapitalizma.” Poln. sobr. soch., 5th ed., vol. 27.
Lenin, V. I. “O karikature na marksizm i ob ‘imperialisticheskom ekonomizme.’ ” Ibid., vol. 30, p. 98.
Bregel’, E. Ia. Kredit i kreditnaia sistema kapitalizma. Moscow, 1948. Chapter 5, section 3; chapter 8, section 5; chapter 15, section 5.
Bortnik, M. Iu. Denezhnoe obrashchenie i kredit kapitalisticheskikh stran. Moscow, 1967. Chapter 3, section 3.
Finansovo-kreditnyi slovar’, vol. 1. Edited by V. P. D’iachenko and others. Moscow, 1961. (The article “Birzha” by F. P. Bystrov.)
Trakhtenberg, I. A. Denezhnye krizisy (1821–1938 gg.). Moscow, 1963. (Contains bibliography.)
Gindin, I. F. Russkie kommercheskie banki. Moscow, 1948. Pages 55, 84, 115, 171–77, 235–43, 444–51.
Architecture of exchanges From the 15th century, exchange buildings, with large halls, were erected, mainly in coastal cities. Among these were the late Gothic exchanges in Spain (Lonja, in Palma on the island of Majorca, 1426–51, architect G. Sagrera; in Valencia, 1483–86, architects P. Compte and J. Iborra) and Flanders (exchange in Antwerp, 1515 and 1531–32, architect D. de Waghemaekere) and, later, the exchange buildings in Renaissance style (Logia dei Banchi in Genoa, 1570, architect G. Alessi; the Börs in Copenhagen, 1619–40, architects L. and H. Steenwinkel), baroque (exchange in Leipzig, 1678, architect C. Richter), and classical (Birzha in St. Petersburg; Bourse in Paris, 1808–26, architect A. Brongniart; in New York, 1836–42, architect I. Rogers; in London, 1841–44, architect W. Tite).
From the middle of the 19th century, large and magnificent eclectic exchange buildings were erected (exchange in Brussels, 1873–76, architect L. Suys; in Vienna, 1874–77, architect T. E. Hansen). The exchange in Amsterdam (1897–1903, architect H. P. Berlage) became the model for exchange structures of the 20th century, with their restrained architecture and large-span ceilings covering huge halls.



in economics, an agreement between persons to trade work, concluded either directly or through the exchange of products of labor. “Since exchange is simply an intermediate phase between production and distribution, which is determined by production and consumption; since consumption is moreover itself an aspect of production, the latter obviously comprises also exchange as one of its aspects” (K. Marx, in K. Marx and F. Engels, Sock, 2nd ed., vol. 12, p. 725). Exchange is a part of production when it involves either actual production work or products to be used in making a finished product. At the same time, exchange is an independent stage in the process of reproduction, while the role of production remains decisive.

The social division of labor makes exchange necessary. The nature and forms of exchange are determined by the mode of production. Depending on the mode of production, exchange may exist in society in the form of direct exchange of work, product exchange, commodity exchange and circulation, direct distribution of products, or any combination of these forms.

In primitive society, where all production was collective and products were immediately distributed, the only form of exchange that existed within the commune was exchange of work associated with the division of labor according to sex and age. Initially, exchange between individual communes had a random character, and frequently was less an economic necessity than an element of ritual in establishing and maintaining friendly relations between tribes.

The growth of the social division of labor made the development of commodity exchange and its transformation into a regular social process, as well as the use of money, increasingly important. Commodity production emerged as a form of production specifically intended for exchange. With private property came the private exchange of commodities with such inherent features as the competition and antagonism that bring destruction to some and riches to others. Yet in slaveholding and feudal societies, most products were manufactured to satisfy the needs of a given economic unit, and commodity exchange was limited.

Commodity exchange achieves its highest development under the capitalist economy. Under the prevailing conditions of anarchic competition, the increasing socialization of capitalist production causes exchange to hypertrophy, which in turn intensifies the parasitic nature of capitalism. New types and functions of exchange that are not directly related to production appear, as a market in paper securities emerges and a large number of joint-stock companies come into existence to carry out purely financial operations. Stock trading exclusively in pursuit of profit, speculative dealing on commodity and security markets, and currency operations linked to the play of exchange rates all increase. The contradictions inherent in the dominance of private property are sharply demonstrated in the exchange sphere, as their retardant effect wastes material and labor. Growing difficulties in marketing goods, crises of overproduction, and currency crises all aggravate competition and directly influence the course of production.

The rule of monopoly capital in the sphere of exchange is an important factor in worsening the antagonistic contradictions present in the capitalist economic system during its imperialist phase. It is also a source of significant changes in the process of exchange itself. Among the new features of commodity exchange that in effect subvert the nature of this exchange are curbs on free competition, expanded use of paper securities, greater ability to concentrate economic power through a variety of financial combinations, and direct use of force, as well as the manipulation of commodity relations within single monopolies. The development of state-monopoly capitalism, extraeconomic methods of extracting profit, vast increases in government contracts, artificial price rises, and movement of foreign trade transactions from the open market to government institutions affect the nature of exchange to an even greater extent. Thus the commodity-monetary exchange continues to prevail, yet is itself subverted by the capitalist monopolies. The capitalists adopt various forms of exchange for the exploitation of colonial, dependent, and developing countries.

After the victory of the Great October Socialist Revolution, V. I. Lenin drew a general conclusion based on experience that commodity exchange remained necessary under conditions of the construction of socialism. Lenin demonstrated that during the period of transition, commodity exchange has a dual nature and may be used not only by capitalist elements but also within a socialist economic system in the interests of the victory of socialism. Exchange under socialism is fundamentally different from exchange under capitalism. The class essence of work exchange changes as it acquires the character of comradely cooperation; exchange takes place between friendly classes and between individuals who are joint owners of the means of production that belong to society. Under socialism, the exchange of commodities is based on public socialist ownership of the means of production and has a planned nature. Its sphere is limited and labor power is no longer a commodity. The exchange of commodities under socialism is subordinate to the task of increasing the well-being of the people and is planned so as to raise the efficiency of production. In the great majority of cases, the exchange of commodities takes place at prices established by the state. Exchange also serves the planned process of socialist reproduction. The construction of a developed socialist society, the growth of national economic potential, the further development of the social division of labor, and the strengthening of the entire planned economy result in broader use of commodity exchange in the construction of communism. Trade involving the means of production thus develops on a basis of planned distribution throughout the economy. Under communism, commodity exchange will cease, but the exchange of work between persons will inevitably be retained.

Commodity exchange is widely used in economic links among the socialist countries and provides an important medium for the process of socialist economic integration. Commodity exchanges are taking place on an increasing scale between socialist countries on the one hand and developed capitalist and developing countries on the other. Communist parties are implementing a policy aimed at further perfecting various forms of both domestic and international exchange in the interests of developing socialist production.


Marx, K. “Vvedenie (Iz ekonomicheskikh rukopisei 1857–1858 godov).” K. Marx and F. Engels, Soch., 2nd ed., vol. 12.
Engels, F. Proiskhozhdenie sem’i, chastnoi sobstvennosti i gosudarstva. K.
Marx and F. Engels, Soch., 2nd ed., vol. 21, ch. 9.
Lenin, V. I. “O prodovol’stvennom naloge.” Poln. sobr. sock, 5th ed., vol. 43.
Lenin, V. I. “Doklad o novoi ekonomicheskoi politike 29 oktiabria 1921 g.” Ibid., vol. 44.
Lenin, V. I. “O znachenii zolota teper’ i posle polnoi pobedy sotsializma.” Ibid.
Materialy XXIV s’ezda KPSS. Moscow, 1971.
“O mezhdunarodnoi deiatel’nosti TsK KPSS po osushchestvleniiu reshenii XXIV s’ezda partii: Postanovlenie Plenuma TsK KPSS, priniatoe 27 aprelia 1973 goda.” Partiinaia zhizn’, 1973, no. 9.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.


A unit established by a telephone company for the administration of telephone service in a specified area, usually a town, a city, or a village and its environs, and consisting of one or more central offices together with the associated plant used in furnishing telephone service in that area. Also known as local exchange.
Room or building equipped so telephone lines terminating there may be interconnected as required; equipment may include a switchboard or automatic switching apparatus.
(computer science)
The interchange of contents between two locations.
(quantum mechanics)
Operation of exchanging the space and spin coordinates in a Schrödinger-Pauli wave function representing two identical particles; this operation must leave the wave function unchanged, except possibly for sign.
Process of exchanging a real or virtual particle between two other particles.
McGraw-Hill Dictionary of Scientific & Technical Terms, 6E, Copyright © 2003 by The McGraw-Hill Companies, Inc.


1. Commerce
a. the system by which commercial debts between parties in different places are settled by commercial documents, esp bills of exchange, instead of by direct payment of money
b. the percentage or fee charged for accepting payment in this manner
2. Chess the capture by both players of pieces of equal value, usually on consecutive moves
3. win (or lose) the exchange Chess to win (or lose) a rook in return for a bishop or knight
4. Med another word for transfusion
5. Physics a process in which a particle is transferred between two nucleons, such as the transfer of a meson between two nucleons
Collins Discovery Encyclopedia, 1st edition © HarperCollins Publishers 2005


(1) A local telephone area. In the U.S., the exchange part of a telephone number follows the area code. For example, in the hypothetical number (201 123-4567), "123" would be the exchange.

(2) See IXP.

(3) (Exchange) See Microsoft Exchange.
Copyright © 1981-2019 by The Computer Language Company Inc. All Rights reserved. THIS DEFINITION IS FOR PERSONAL USE ONLY. All other reproduction is strictly prohibited without permission from the publisher.
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If the terms of the business agreements to be exchanged are substantially similar, this would qualify the exchange as like-kind under the first requirement for an exchange of intangible property.
The Model Act suggests that funding for the exchanges be derived from charging fees to health carriers that offer their plans through the state exchange.
They are as follows: (a) a well-developed foreign exchange market; (b) a nominal anchor for monetary policy to replace the fixed exchange rate; (c) policy for central bank intervention in the foreign exchange market, that is the practice of buying or selling the local currency to influence its exchange rate; and (d) an exchange rate risk management mechanism for monitoring and managing both public and private sectors exposure.
The entire amount of the gain or loss, if any, is recognized at the time of the exchange, regardless of the taxpayer's accounting method; and
Simply put, while a 1031 Exchange must always be a like-kind exchange, it is a mistake to think that it is a tax-free exchange; rather, it is a tax-deferred exchange.
One held that an overriding royalty interest was part of a like-kind exchange, the other that a carved-out oil payment was not part of a like-kind exchange.