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Revisiting the 'transformation problem' and iterative solutions under the light of intra- and inter-sectoral competition

Author

Listed:
  • Nikolaos Chatzarakis

    (Department of Economics, New School For Social Research, USA)

Abstract

The classical system of production assumes that (i) competition between labourers and capitalists (and among labourers) results to a uniform wage, (ii) competition among capitalists within each industry to a uniform price, and (iii) competition among capitalists in different sectors to a uniform rate of profit. These are the laws of competition Marx attempted to incorporate into his 'transformation' process. Okishio and Shaikh showed that such a `transformation algorithm' indeed exists. However, the inter-sectoral competition wass emphasised, while the intra-sectoral competition almost entirely ignored. In this work, we attempt to incorporate this phase of competition and extend the Okishio-Shaikh algorithm.

Suggested Citation

  • Nikolaos Chatzarakis, 2025. "Revisiting the 'transformation problem' and iterative solutions under the light of intra- and inter-sectoral competition," Working Papers 2503, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:2503
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    File URL: http://www.economicpolicyresearch.org/econ/2025/NSSR_WP_032025.pdf
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    More about this item

    Keywords

    Labour theory of value; laws of competition; transformation problem; regulating prices;
    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
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory

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