Marx’s Argument for the Labor Theory of Value

In a Times Literary Supplement review of some recent literature on Marx and Marxism for a general readership, Jonathan Wolff claimed that Marx’s solution to the so-called “transformation problem†is “half-baked.†The aim of this paper is to challenge this complacent dismissal of some of Marx’s central economic ideas. In the process, I want to show that although the issues here are subtle and complex, Marx’s ideas retain a great deal of intuitive appeal, and his “solution†to the so-called “transformation problem†is neither conceptually implausible nor mathematically dubious. Crucial to this aim is to show that Marx viewed the categories of (what he called bourgeois) economics through a social lens, which is given in the first chapter of the first volume of Capital .