SPLITTING THE STREAM OF SURPLUS VALUE IS KEY TO RESOLVING THE TRANSFORMATION PROBLEM.

Resolving the transformation problem set out by Karl Marx in Chapter 9 of Volume 3 of Das Kapital is the supreme challenge facing Marxian theory. Without such a resolution, the labour theory of value cannot be defended. Many attempts have been made to resolve this issue over the years, and in attempting to do so, the transformation problem has become the reputational graveyard for many, especially those who sought to reinterpret Marx or render him more profound. Like DIY bodgers trying to improve the house that Marx and Engels built, their shoddy workmanship has only served to devalue this house.

This article provides a novel approach to the resolution of the transformation problem. It reformulates “prices of production” to be those prices which yield an average rate of profit, not on the original capital, but on the newly priced capital. This categorisation sets the requirement to split the stream of surplus value needed to equalise profits into two, one to reprice capital, and the other, to adjust profits, so that the newly adjusted profit earns an average rate of profit when measured against the newly priced capital.

Historically, this is the first time this twin allocation has been done, and until it was done, it was impossible to resolve the transformation problem. I submitted this article to Historical Materialism for publication but it was rejected because of its “complexity”. The irony is that this article provides the simple key needed to unlock the transformation problem, the splitting of the stream of redistributed surplus value into its two components.

For ease of explanation, I have divided the process of transforming value into price into a number of steps.

US RATES OF PROFIT 1980 – 2019.

THE US RATE OF PROFIT IN Q2 FALLS TO POST-WAR LOW.

THE MEANING OF TRUE INTERNATIONALISM NOW AND IN THE FUTURE.

TURNOVER Q1 2020. SETTING A BASELINE BEFORE THE PANDEMIC.

COVID PROPELS CHINESE $GDP TEMPORARILY ABOVE US GDP.

DOES RISING INEQUALITY & THE GROWTH OF UNPRODUCTIVE LABOUR EFFECT PROFITABILITY?

This article discusses the two different forms of unproductive labour; functional unproductive labour versus personal unproductive labour. The former is paid out of capital and the latter out of revenue. The former weighs on the rate of profit by reducing profits, while the latter weighs on the rate of profit not by reducing profits but by increasing wages as recorded in the National Accounts. Here then is the importance of distinguishing the different forms of unproductive labour.

THE USA PREPARES ITS OWN “PEARL RIVER” ATTACK.

A TALE OF RETAIL SALES AND INVESTMENT BANKS.

WHY THE TEMPORAL SINGLE SYSTEM INTERPRETATION YIELDS NOTHING.

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