The Transformation Problem: A Tale of Two Interpretations
16 Pages Posted: 30 May 2007 Last revised: 10 Jan 2012
Date Written: May 1, 2007
Over 100 years since Marx's value theory of labour was first published, the so-called "transformation problem" -- deriving prices from values and providing a theory of profits as arising from surplus value -- has inspired the imagination of economist of all shades of intellectual suasion. However, while mainstream economists have by and large come to dismiss the transformation problem as a trivial technical exercise, the issue has recently received renewed attention in Marxian economic theory. This paper provides a broad historical overview of the transformation problem and specifically focuses on similarities and differences of how the transformation problem has been interpreted, why it was put to rest in mainstream economics and how it has regained prominence in Marxian economics.
Keywords: History of Economic Thought, Marxian Economics
JEL Classification: B1, B41
Suggested Citation: Suggested Citation