ABSTRACT OF PAPER
Title: The "transformation" problem. The controversy over exchange values and production prices integrated with the Grundrisse procedure.
Author: Serafini Gabriele
The paper is about the long-lasting controversy over the transformation procedure, from exchange values to production prices, adopted by Karl Marx in his works. According to the procedure expressed in the third book of his Capital, a unique rate of profit (profit/(capital+wages)) in a competitive economy is only compatible with the same capital intensity (capital/wages) in all the industries. Since every good is produced in different conditions, the levelling of the profit rate is impossible. We state that the inconsistency of the procedure refers to the economic logic, not the algebraic one. However, in another work by Marx, Outlines of the Critique of Political Economy (Grundrisse), is possible to see that production prices can be determined starting from exchange values and considering the differences between exchange values and the prices realized in the market. When a good is sold at a certain price, the positive or negative difference between this price and the exchange value is transferred from the seller to the buyer, since it remains in the economy. In order to clarify this procedure, we use the Input-Output Analisys and create a Modified Supply and Use Table (M-SUT), which enables to separate the production stage from the exchange one and consider the two stages contextually, not simultaneously, in a spiral-like model. The algebraic outcome is the overcoming of the economic limit of the different capital intensities in the industries and the recognition of the investment level ensuring one rate of profit in the competitive market and the dimension of the scale of production.
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