Samuelson on Marx and the Transformation Problem

glevy at glevy at
Mon Jul 3 12:36:27 MDT 1995

Since Jim D. and others have mentioned Samuelson with reference to the
transformation problem, I'll add a little bit of background here.

Samuelson's ECONOMICS had an appendix on Marx (that was included in later
editions) which was simply dreadful.  Marc Linder wrote a two-volume
critique of Samuelson (4 volumes in German) called ANTI-SAMUELSON which,
in my humble opinion, ripped the entire book to shreads.

Samuelson wrote a couple of articles in 1970 and 1971 concerning the TP.
The major article was "Understanding the Marxian notion of exploitation:
A summary of the so-called transformation problem between Marxian values
and competitive prices" (JOURNAL OF ECONOMIC LITERATURE, June, 1971).
That article argued that the TP was a "irrelevant detour" and that there
was no transformation from either values or prices of production. He
argued that prices of production are all that is needed and that values
are in no way necessary to calculate prices. He further argued that the
"transformation" could run in either direction -- from value to price or
price to value. Samuelson further contended that "exploitation" depends
on the subsistence wage and that the empirical rise in real wages refutes
that idea.

Students of Marx will notice that Samuelson makes all kinds of errors in
the above interpretation of Marx.  William Baumol (a neoclassical
economist with a sharp, independent mind) wrote a very convincing reply
to Samuelson in his article entitled "The Transformation of Values: What
Marx 'Really' Meant (An Interpretation)" (JOURNAL OF ECONOMIC LITERATURE,
March, 1974).

The above is extracted (with commentary) from the "notes" that I referred to


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