Money and Totality: A Macro-monetary Interpretation of Marx’s Logic in Capital and the End of the “Transformation Problem”
AbstractThis paper is an introduction to the main points of my recent book by the same title. As the title suggests, the book is a reexamination of the logical method employed by Marx in his theory of capitalism in Capital, especially as related to the long-standing controversy over the so-called “transformation problem”, according to which Marx’s theory of prices of production in Volume 3 of Capital is supposed to be logically inconsistent with this theory of value and surplus-value in Volume 1. This criticism has been the main reason for rejecting Marx’s theory over the last century. My book argues that, if Marx’s logical method is correctly understood, then Marx’s theory of prices of production in Volume 3 is logically consistent and there is no transformation problem in Marx’s theory.
The book argues that there are two main aspects of Marx’s logical method that are especially relevant to the transformation problem, and I characterize these two aspects in modern economic terms as macroeconomic and monetary. The first two sections of this paper discuss in turn these two main aspects of Marx’s logical method, with primary emphasis in this paper on the monetary aspect because it is the most controversial. Section 2 on the monetary aspect argues that Marx did not “fail to transform the inputs of constant capital and variable capital, as is commonly alleged, and thus there in no “transformation problem” in Marx’s theory. Section 3 presents an algebraic summary of this macro-monetary interpretation of Marx’s theory and Section 4 discusses a few examples of the textual evidence related to the monetary aspect of Marx’s logical method.