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A Capital Invariant Solution to the Marxian Transformation Problem

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  • Gabriel Montes-Rojas

Abstract

This paper constructs a new solution to the Marxian transformation problem in a simple reproduction economy. It imposes two invariant equations using both constant and variable capital, separately, in order to solve the price and value system. This solution produces a profit rate that lays in between the “new interpretation†and labor-valued profit rates.

Suggested Citation

  • Gabriel Montes-Rojas, 2017. "A Capital Invariant Solution to the Marxian Transformation Problem," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(1), pages 114-124, March.
    • Handle: RePEc:sae:reorpe:v:49:y:2017:i:1:p:114-124
    DOI: 10.1177/0486613415616216
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    References listed on IDEAS

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    1. Baumol, William J, 1974. "The Transformation of Values: What Marx "Really" Meant (An Interpretation)," Journal of Economic Literature, American Economic Association, vol. 12(1), pages 51-62, March.
    2. Lipietz, Alain, 1982. "The so-called "transformation problem" revisited," Journal of Economic Theory, Elsevier, vol. 26(1), pages 59-88, February.
    3. F. Seton, 1957. "The "Transformation Problem"," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(3), pages 149-160.
    4. Baumol, William J, 1974. "The Transformation of Values: What Marx "Really" Meant: Reply," Journal of Economic Literature, American Economic Association, vol. 12(1), pages 74-75, March.
    5. Duncan K. Foley, 2000. "Recent Developments in the Labor Theory of Value," Review of Radical Political Economics, Union for Radical Political Economics, vol. 32(1), pages 1-39, March.
    6. Glick, Mark & Ehrbar, Hans G, 1987. "The Transformation Problem: An Obituary," Australian Economic Papers, Wiley Blackwell, vol. 26(49), pages 294-317, December.
    7. Alan Freeman & Guglielmo Carchedi (ed.), 1996. "Marx and Non-equilibrium Economics," Books, Edward Elgar Publishing, number 737.
    8. Duncan K. Foley, 1982. "The Value of Money the Value of Labor Power and the Marxian Transformation Problem," Review of Radical Political Economics, Union for Radical Political Economics, vol. 14(2), pages 37-47, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Marxian transformation problem; new interpretation; values; prices of production;
    All these keywords.

    JEL classification:

    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian

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