The Transformation Problem: A Tale of Two Interpretations

16 Pages Posted: 30 May 2007 Last revised: 10 Jan 2012

See all articles by David S. Bieri

David S. Bieri

Virginia Polytechnic Institute & State University - School of Public and International Affairs (SPIA); Virginia Polytechnic Institute & State University - Department of Economics

Date Written: May 1, 2007

Abstract

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

Bieri, David S., The Transformation Problem: A Tale of Two Interpretations (May 1, 2007). Available at SSRN: https://ssrn.com/abstract=989787 or http://dx.doi.org/10.2139/ssrn.989787

David S. Bieri (Contact Author)

Virginia Polytechnic Institute & State University - School of Public and International Affairs (SPIA) ( email )

United States

Virginia Polytechnic Institute & State University - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States

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