The Transformation Problem — Some Complicating Detours

Abstract

Much controversy continues to surround the interpretation, the relative importance and the accuracy of Marx’s formulation of the transformation of values into prices and of surplus values into profits, which is mainly to be found in Chapter IX of Capital, Volume III. A great deal has been written on this subject since it first appeared and the debate will assuredly continue far into the future. In the chapter presented here, we will examine Marx’s discussion of the transformation procedure before investigating the critiques and counter-critiques that have ensued. It is not that this is the most important aspect of Marx’s political economy, indeed many would suggest that it has constituted an unwelcome and misplaced diversion, but it remains the one area that has caused Marxian economists the most difficulty in terms of a complete refutation of ‘orthodox’ interpretations of the operation of a capitalist economy. It has often been seized upon by non-Marxians as the ‘chink in the armour’ of Marxian political economy.