Transformation problem

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages) This article includes a list of general references, but it lacks sufficient corresponding inline citations. Please help to improve this article by introducing more precise citations. (October 2014) (Learn how and when to remove this message) This article possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed. (July 2020) (Learn how and when to remove this message) (Learn how and when to remove this message)

Part of a series on
Marxian economics
Concepts Capital (accumulation) Capitalist mode of production Class process Commodity Concrete and abstract labuor Constant capital Critique of political economy Exchange value Exploitation Labour power Labour theory of value Law of accumulation Law of value Means of production Mode of production Monopoly capitalism Organic composition of capital Productive forces Profit Prices of production Primitive accumulation Rate of exploitation Rate of profit Real prices and ideal prices Relations of production Reproduction Reserve army of labour Socially necessary labour time Socialist mode of production Socialization Simple commodity production Surplus value Surplus labour Surplus product Use value Wage labour Wage slavery Value-form Value product Variable capital
Topics Capital controversy Crisis theory Economic determinism Immiseration thesis Imperialism Historical materialism Okishio's theorem Overaccumulation Overdetermination Overproduction Kondratiev wave Technological determinism Technological unemployment Temporal single-system interpretation Falling profit-rate tendency Transformation problem Underconsumption Value
Variants Analytical Marxism Classical Marxism Orthodox Marxism Neo-Marxian economics
Works A Contribution to the Critique of Political Economy Das Kapital Grundrisse Economic and Philosophical Manuscripts of 1844 The Accumulation of Capital Monopoly Capital The Theory of Capitalist Development Finance Capital
People Karl Marx Friedrich Engels Vladimir Lenin Rosa Luxemburg Rudolf Hilferding Leon Trotsky Karl Kautsky Ernest Mandel Antonie Pannekoek János Kornai Andrew Kliman Richard D. Wolff Nikolai Kondratiev Paul Sweezy Nobuo Okishio Ian Steedman John Roemer David Laibman Paul A. Baran Stephen Resnick Michał Kalecki
Journals Cambridge Journal of Economics International Journal of Political Economy Monthly Review New School Economic Review Real-World Economics Review Rethinking Marxism Science and Society
Related topics Evolutionary economics Classical economics Marxism Marxist sociology Neoclassical economics Perspectives on capitalism Political economy Schools of economic thought Socialist economics Critiques of capitalism
Economics portal Marxism portal
v t e

In 20th-century discussions of Karl Marx's economics, the transformation problem is the problem of finding a general rule by which to transform the "values" of commodities (based on their socially necessary labour content, according to his labour theory of value) into the "competitive prices" of the marketplace. This problem was first introduced by Marxist economist Conrad Schmidt^[1] and later dealt with by Marx in chapter 9 of the draft of volume 3 of Capital. The essential difficulty was this: given that Marx derived profit, in the form of surplus value, from direct labour inputs, and that the ratio of direct labour input to capital input varied widely between commodities, how could he reconcile this with a tendency toward an average rate of profit on all capital invested among industries, if such a tendency (as predicted by Marx and Ricardo) exists?