A Macro-Monetary Interpretation of Marx ’ s Theory and the End of the “ Transformation Problem ” : Responses to Criticisms by Laibman and Skillman by Fred Moseley

ion in Volume 1 and then a more complete explanation of C and V in the micro level of abstraction in Volume 3. As I mentioned before, Laibman adopts in this paper the iterative interpretation of the transformation presented by Anwar Shaikh (1977). According to this iterative interpretation, Marx’s presentation of his theory of prices of production in Part 2 of Volume 3 of Capital is not incorrect, but is instead only incomplete. It is only the first step of a multi-step iterative process, which needs to be completed, and the end results of this iterative process are long run prices of production and the associated rate of profit. Laibman agrees with the Bortkiewicz critique that Marx did not transform the inputs of constant capital and variable capital, but he argues that these inputs can be transformed by an extension of what Marx’s first step. However, this iterative interpretation comes to the same quantitative conclusions as the Bortkiewicz-Sweezy simultaneous interpretation, except for a proportionality factor (because a different invariance postulate is assumed; the rate of profit and relative prices are the same). Indeed, the iterative interpretation is not really a different interpretation of Marx’s theory but only an alternative computational method of solving a system of simultaneous equations. Furthermore, even though labor-values are Laibman’s starting point for his iterative derivation of prices of production, the initial magnitudes could be anything, i.e. could be any arbitrary set of numbers, and the end results would be the same prices of production and the same rate of profit. The insignificance of the initial magnitudes is one of the characteristics of using this iterative method to solve a system of simultaneous equations. The iterative method is the method used by computers (e.g. Excel) to solve simultaneous equations. The computer “guesses” at the initial values, and then calculates successive approximations of the solutions iteratively until the solution is found. The insignificance of the initial magnitudes does not