Money and transformation in Marx

The transformation problem is one of the basic features of the marxist discourse and of its critique of Classical economics. The Bortkiewicz solution to the error in the algebraic formulation of this problem involves strict specifications of the numéraire used to express prices and values. This paper aims to show that these specifications not only do not contradict Marx’s monetary theory but really imply it once we abandon labour as the substance which determines value. The paper also suggests that money as the “general equivalent” is the true medium through which transformation is possible and should substitute for “labour” in expressing the idea of a “social energy” which determines capitalistic exchange values.

KEYWORDS:
Marxism; Bortkiewicz; value theory; transformation problem