Profitability, Prices and Values

Abstract

Needless to say much of Capital, and not only Volume III, is concerned with profits and profitability. But it was in volume III that Marx came to the culmination of his value theory and theorised about the way in which the structural/underlying/invisible value relations translate into the phenomenal/overt/visible price relations. This is the contention of chapter 6 in volume I ‘On the Buying and Selling of Labour Power’. It takes, however, a full and elaborate preparation with the help of the earlier two volumes to acquire the background required to attempt the final resolution of the problem. Although the ‘problem’ has been seen as one of transforming values into prices, it is, and has always been, a problem of providing a theory of profits, that is, how — in a world of voluntary contracts and free labour — exploitation can be translated into profits without in any way invoking coercion, false consciousness, market imperfections and so on (I have surveyed the literature on the transformation problem in Desai, 1991, detailing all the solutions except the most recent, which are discussed below.)

This is a revised version of the paper submitted at the Bergamo Conference, but not read. I am grateful to Gerard Dumenil for saving me from egregious errors.