Marx and the value

Abstract

This paper addresses the Marxian transformation problem of values into prices. According to Marx, the value of commodities is given by the labour embodied in the same commodities. However, given the Marxian assumption of free competition in labour and good markets, the price of commodities may deviate from their labour value. Marx’s “transformation problem” lies precisely in the computation of prices based on their labour content. As we shall see, the solution proposed by Marx is only partial, and subsequent attempts to solve the problem increasingly distance the solution from the Marxian model which is based on labour value and surplus value, leaving the question still open.