A Category-Mistake in the Classical Labor Theory of Value: Identification and Resolution

Abstract

The classical labor theory of value generates two well-known antinomies: Ricardo’s problem of an invariable measure of value and Marx’s transformation problem. I show that both antinomies are generated by the same category-mistake of expecting a technical measure of labor cost to function as a total measure of labor cost. This category-mistake is the deep conceptual generator of the two hundred year history of the ‘value controversy’. Once identified we can avoid the category-mistake, which yields a labor theory of value with an invariable measure of value and without a transformation problem.

Keywords: classical political economy, labor theory of value, Ricardo, Marx

JEL Classification: B51, E11, D46