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Guilford Press

Beyond the Transformation Riddle: A Labor Theory of Value

Author(s): G. Duménil
Reviewed work(s):
Source: Science & Society, Vol. 47, No. 4 (Winter, 1983/1984), pp. 427-450
Published by: Guilford Press
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BEYOND THE TRANSFORMATION RIDDLE:
A LABOR THEORY OF VALUE

G. DUMÉNIL*

CONTROVERSY OVER the transformation of

valuesintopricesof productionhas raged within Marx-
ism fornearlyone century.Shortlyafterthe publication
of VolumeIII of Capital,a feweconomists, who enjoyeda more
advancedknowledgeof mathematics than Marx,demonstrated
thattherectification of Marx'scalculationdestroys thepossibility
of the simultaneous verification of thetwofamousequalitiesbe-
tweensocialaggregateswhichMarx postulates.1
One can alwaysquestionthe significance of a systemof ab-
stractnotions;butwhenthearchitect of thesystemis trappedby
a logical flawin his formalismitself,the triumphof his foes
seemsabsolute.
Whatis reallyat stakein thisdebateis the relevanceof the
conceptof value as thebasisof politicaleconomy.As a resultof
inadequatesolutionsto thetransformation problemput forward
by Marxist economists, the Marxist approach has been chal-
lenged by a substitutetheoreticalapparatus,developedon the
basisof theworksof Piero Sraffa.2 Abandoningthelabortheory
of value,thisschoolattempts to derivesome of thesamecatego-
ries whichare foundin Marx'sanalysis;e.g., pricesof produc-
tion,exploitation and crisis.
* The author dedicates this paper, in sorrow,to Serge A.S. Demyanenko,who trans-
lated it into English. Serge died in an automobileaccident in June 1983, at the age of
22. He was a brilliantstudent and a wonderfulfriend,and his contributionswill be
greatlymissed.
1 Ladislaus von Bortkiewicz,"On the Correctionof Marx's Fundamental Theoretical
Constructionin the Third Volume of 'Capital'," in P. M Sweezy, ed., Karl Marx and
and theClose ofHis System, by Eugen von Böhm-Bawerk (New York, 1966).
2 Piero Sraffa,Productionof Commodities byMeans of Commodities(London, 1973).
427
428 SCIENCE & SOCIETY
When one looks at this debate more closely,however,
Sraffa'scontributionto the new approachappears to be rather
limitedin spiteof thefactthathiscontribution providedthehis-
toricalpointof departurefor recentdiscussion.Althoughthe
standardcommodityhas held a certainfascinationfor many
Sraffians, I believetheyare deluded as to its properties.While
thesepropertiesare quite usefulin some contexts,the standard
commodity providesneitherRicardo'snor Marx'sinvestigations
withany plausibleanswer.3
Whatremainsreallyimportantas far as the Marxian/Neo-
Ricardiancontroversy is concernedcan be reducedto this:given
the existingtechniquesof production,one can derivepricesof
productionwithoutany referenceto value. This conclusion,
however,cannotbe said to be a newdiscoveryof Sraffaand his
followers.
The suggestionthat Marx thoughtprices of production
could not be calculatedwithouta priordetermination of value
involvesa radicalmisunderstanding of Capital.4
Whateverthehistorical development of thiscontroversy,the
questionis nowclearlyframed:is itnecessaryor evenpossibleto
undertakea criticalanalysisof capitalistrelationsof production
whilejettisoningboththe neo-classical approachand the old la-
bor theoryof value approach?
This paper seeksto presenta vigorousdefenseof a concept
of valueand, specifically,a labortheoryof value,as a consistent,
logicallycoherent,necessarytheoretical tool. The primarypur-
pose is to proposea new interpretation of the labor theoryof
value and thetransformation problem.5The analysiswillbe de-
veloped in four steps.
1. It willbe shownthata conceptof valueis a necessarythe-
oreticaltool for any economist,whetherthis is recognizedas
3 Some economistseven contend thatSraffa'sstandard commoditycan be used to solve
the transformationproblem. See, for example, Ronald Meek, Economicsand Ideology
(London, 1967).
4 Paul A. Samuelson, "Understandingthe Marxian Notion of Exploitation:A Summary
of the So-Called TransformationProblem between Marxian Values and Competitive
Prices,"JournalofEconomicLiterature,
Vol. 9, 1971, pp. 399-431. Similarlyfalse is the
sophisticatednotion that Marx intended to prove that the rate of profitcould be
determined prior to the calculation of prices. See John Eatwell, "Mr. Sraffa's
Standard Commodityand the Rate of Exploitation,"Economica,New Series, Vol. 42.
5 Gérard Duménil,De la valeuraux prixde production(Paris, 1980). This new interpreta-
tion has been adopted bv Alain Lipietz, "The So-Called 'TransformationProblem'
 BEYOND THE TRANSFORMATIONRIDDLE 429
suchor not,and thereare profoundreasonsto referto laboras
the substanceof thisvalue.
2. Since it is impossibleto denythatcertainimportantre-
sultscan be obtainedby usingpricesof production,it is neces-
saryto establishthespecificexplanatory role of thelabortheory
of value.
3. The new interpretation of the labor theoryof value and
thetransformation problem notappearedevidentto readers
has
of Capitalforapproximately 100 years.It is thereforenecessary
rigorously study placesin Marx'sreasoningwherethedif-
to the
ficulties
are situated.
4. The persistenceof the traditionalinterpretation can be
explained to a large extentby the line of thought Marx follows
in Capital.

I. FROM A CONCEPT OF VALUE TO A LABOR THEORY

OF VALUE
Wheneconomistsaddressthetopicsof productionand dis-
tribution, theyare compelledto referto something whichis the
object of these socialacts.
The firstmethodof approachingtheseobjectsor quantities
is definethemin physicaltermsas a set of goods6(possibly
to
services,but thisdistinction is abstractedfromin thispaper). In
thisframework of analysis,each componentremainsheterogene-
ous and it is not possible,exceptin veryparticularcases,to ad-
dressany of thebasic processesof the economicsphere,e.g.,to
referto a percentageincreaseor decreasein productionor to
measurethesharesof anyparticular groupin thenationalprod-
uctby meansof a scalar.In orderto aggregate,one mustuse a
setof coefficientsand transform thebasketsof commoditiesinto
a simplenumberwhichonlythenallows forsuch comparisons.
Revisited/'/oMm«/ ofEconomyTheory,Vol. 26, 1982, pp. 59-88. Duncan Foley simulta-
neously presented a similar solution, in "The Value of Money, the Value of Labor
Power and the Marxian TransformationProblem,"ReviewofRadical PoliticalEconom-
ics,Vol. 14, No. 2, 1982. I want to thankDuncan Foley forveryhelpfulconversations
in the preparation of this article.
6 The temptationthus arises to develop a theoryof exchange or exploitationdirectlyin
physical terms. See Geoff Hodgson, "A Theory of Exploitation Withoutthe Labor
Theory of Value," Science fcfSociety,Fall 1980, and David Laibman's comment,
"Exploitation,CommodityRelations and Capitalism: A Defense of the Labor-Value
Formulation,"in the same journal.
430 SCIENCE & SOCIETY
The mostcommonmethodof weightingtheseheterogene-
ous componentsis to applya pricesystem.If thispricesystem
does notchangeovertheperiodstudied,one can achievethede-
siredcalculations.One must,however,underscorethe arbitrary
characterof thischoice when studyinga period in whichthe
pricesystemchanges.In thiscase,one mustarbitrarily choosea
setof pricescorresponding eitherto the beginning,the end, or
the averageof the periodexamined.7
How can a conceptof value ariseas a necessarytheoretical
toolin thiscontext?
A genuine concept of value inherentlyimposes itself,
whetherexplicitly or implicitly,whenevera specificline of rea-
soning such as the following is undertaken: On thebasisof the
samequantities, any variation in thepricesystem settles
a question
. If
ofdistributionpriceschange,the wealthof societyis distributed
in a different pattern,but the aggregatequantityexpressesa
type of invariance. A logicalconsequenceof thismode of analy-
sisis theemergenceof theidea ofequivalencebetweenall there-
sultsof theweightings. This is tantamount to a normalization in
whichdifferent setsof pricesobtainthe same valuation.

Let us consider(qifq2. . . , qn)as thebasketofn commodities

denotedas Q (a columnvector);(pi,p2 . . . , pn) as the set of n
pricesdenotedas P (a row vector).Therefore,PQ is equal to
M1+M2+ • • • +Mn-
The generallevelof any setof pricescan be normalizedby
multiplying or dividingall thepricesbythesamenumber.Thus,
if the systemof pricesis allowedto vary,bearingin mindthat
onlythe distribution of the productis beingmodified:
PlQ = P2Q = = PmQ
To proceedin thismanneris to implicitly referto a socialsub-
stancethatis conservedthroughvariationsof prices.
As long as Q remainsconstant,however,theoreticalprog-
ress is limited.The projectof conservinga certainmeaningin
thistypeof reasoningbecomesmoreinteresting whenappliedto
a situationof changingQ. For instance,if Q doublesin all its
7 If each elementaryquantityis multipliedby a price, the price of the whole basket is
usually referredto as its "value." As long as the use of the term"value" is not exclu-
sivelylimitedto its meaning in the labor theoryof value, it is not inaccurateto use the
termin the above sense. Indeed, the appearance of the term in this contextmay be
regarded as quite revealing.
 BEYOND THE TRANSFORMATION RIDDLE 431

components,would it not be meaningful to suggest that the

amount of social value has also doubled? If a basket is equal to
the sum of two other baskets,isn'tit possible to maintainthat its
value is also equal to the sum of the values of the two other bas-
kets?
Let us denote the amount of thissubstanceof value as X and
summarize our hypotheses:
1) If Q0=«Q1, one can say thatXqo=¿zXq1
2) If Q, = Q0+Q1> one can say thatXQi=XQo+XQl
We keep in mind the factthat the relation of this substance
to prices is one in which any systemof prices allots it differently
to constantquantities.
This line of argument,whichwe are makingexplicit,implic-
itlyunderlies the whole discourse of politicaleconomy.In a con-
ceptofvalue,one thinksofsomething beyond priceswhichcannotbe re-
ducedtoa meresetofquantities.* Anyone who contends thatannual
production has increased or decreased by a certain percentage
exhibitsreasoning of this kind. He is using a concept of value
which perhaps he will never analyze but which nonetheless he
stilluses.
This analysiscan be extended to income categories,and the
analysis of prices we have considered can be applied, for in-
stance, to wages. The recipientsof wages can acquire, withina
given price system,a basket of commodities.This real income
can be expressed as a fractionalamount of value. For the prop-
erties (1) and (2) to hold, it is sufficientto allot certainamounts
of this social value to specificbasketssuch that any other basket
of goods can be obtained by means of a linear combinationof
these baskets. In other words, if a basket can be obtained as the
sum of certainamounts of these basic baskets,the value allotted
to that basket can be calculated by simple addition.
If the social substance is allocated to unit quantitiesof each
good, the foregoingrequirementis guaranteed and the amounts
obtained resemble a specific set of prices. However, individual
prices differfundamentallyfrom values of this type. It is the
centralidea in this analysisthat a set of prices is only a medium
determiningthe distributionof thissubstance,a mold into which
8 The epistemologicalbackground of thisstudyis provided in Gérard Duménil,Le con-
dans Le Capital, forewordby Louis Althusser(Paris, 1978).
ceptde loi économique
432 SCIENCE & SOCIETY
thesubstancemeltsintoa specificconfiguration. Marxwroteof
pricesas the "forms" of value.
As longas one is limitedto thisconceptof valuewithinitself
and itsrelationto theconceptof prices,it is impossibleto pro-
gress. The allocationwhichwe have derivedremainsarbitrary.
What
distinguishesconceptsin a sciencefrommere"representations"
is thatthe mannerin whichtheyare analyzedmustconformto
the projectof combiningtheirexplanatorypowerwiththatof
otherconceptsin orderto explaincertainphenomena.Scientific
conceptsare markedby theirplace withina systemof concepts;
theirstructuresare thusdefinedin relationto otherconcepts.
Value and priceare alreadyarticulated
in thisspecificmannerin
the analysiswe have so farpresented.
A relationof thistypeallowsus to givea specificcontentto
theconceptof value throughitslogicalconnectionto theconcept
ofproduction.
Generalnotionsof productionfoundoutsidethebordersof
politicaleconomyare extremely vague.Anyactivity whichresults
in a positiveoutcomeis, to a certainextent,productive.Within
the framework of politicaleconomy,however,thisconceptis
givena preciseand non-arbitrary content.To produceis to be-
stowa certainamountof humanlaboron an ensembleof prod-
ucts(themselves previousoutputsof production)in orderto ob-
tain another ensembleof products.While the conditionsin
whichproductiontakesplace mayproveto be moreor less fa-
vorable,thisdoes not alterthe verynatureof the act.
The consequenceswhichfollowfromthisanalysisare nu-
merousand significant. Amongotherthings,we can see thatal-
thoughonlyhumanlabor is productive, not all humanlabor is
so. Further,a machinedoes not produce,forit is onlyone ele-
mentof thesetof productson whichlaboris applied.It is also a
componentwhich survivesthe process of production,albeit
olderand moreused. Land does notproducebyitselfeither,but
ratherdeterminesthe conditionsof production.Onlyafterhu-
man intervention does a vegetablebecomea product.This is so
even if the intervention is limitedto directreaping.This is not
an arbitrary distinctionbecause it is presentedin orderto ana-
lyzea specificphenomenon.Politicaleconomyviewsproduction
onlyin the above sense; anyextentionof theconceptwouldde-
stroythe rigorof the analysis.
 BEYOND THE TRANSFORMATIONRIDDLE 433
When, for example,it is contendedthatland and capital
produceby themselves, quite anothereconomictheoryis devel-
oped. In the finalinstance,it is the explanatorypowerof the
analysisdeveloped throughthe use of these theoreticaltools
whichdecidesthe issue. To maintainthatland itselfis produc-
tiveis to rejectthe labor theoryof value. Nothingcan be ad-
vancedto refutethisviewotherthanthesimplecontention that,
in fact,land does not produce,and thatif thisfallaciousap-
proachis adopted,erroneousconclusionsare sure to follow.
As statedearlier,the labor theoryof value arisesfromthe
articulation of theconceptof valueto theconceptof production.
Onlyone causativetransformation takesplace betweentheinitial
bundleof commodities and thefinalbundle:a certainamountof
humanlabor has been expended.
Two different accountscan be read intothe increasewhich
resultsfroma processof production.First,a trivialreadingsees
a new bundle of commoditiesequal to the difference between
theoutputbundleand the inputbundle.A secondreadingsees
an increaseof incorporatedlabor. The boldnessof the labor
theoryof value lies in its deductionof the natureof the social
substanceunder investigation based on an understanding of the
its
processof augmentation which we just described.This is the
qualitativestep.
Fromthe quantitative pointof view,the articulation of the
twoconceptsof value and productionsuppliesthekeyto theal-
lotmentproblemreferredto above. It is necessaryto postulate
thatthisidentification of valuewithlaborincorporated holdsfor
anyproductof any ensembleof productiveprocessesas a basis
fordefiningan allotment verifyingtheproperties(1) and (2). On
thisbasis,it is usuallypossibleto determinetheamountof labor
associatedwithany individualcommodity.9
The foremostaspectof thisanalysisis the existenceof an
economicact,production, whichallowsthe movement fromone
basketof commodities to another.The questfora valueconcept
leads to an interpretationof thisproductiveact as an increasein
theamountof thissocialsubstanceembodiedin thefinalbasket

9 On the problemsarisingin a joint productionmodel in thisregard,see Gérard

Duméniland D. Levy,"Valeurset prix de production:Le cas des productions
Vol. 33, No. 1.
jointes,"RevueEconomique,
434 SCIENCE & SOCIETY
as comparedto thatin the initialbasket.If productionis ana-
lyzedas theapplicationof humanlaborto one basketin orderto
obtainanotherbasket,it is logicallyincumbent, froma qualita-
tivepointof view,to assimilatethissubstanceto laborand, from
a quantitativepointof view,to allocateitto a basketofcommodi-
tiesequal to the net outputof thisproductiveprocess.

//. PRICES OF PRODUCTION AND THE

LABOR THEORY OF VALUE
As alreadyindicated,it is perfectlyaccurateto calculate
pricesof productionon the basisof a mathematical description
of a techniquewithouteven mentioning value. Such an exercise
is certainlyno greatdiscovery.The cost of productionof each
good can be written as thesumof thepricesof thenecessaryma-
terialinputsplus the requiredwages.This costmultiplied bythe
uniformrate of profitsuppliesthe totalamountof profit.The
sumof the costand the profitgivesthe priceof the finalprod-
uct.If everyquantityof materialinputand laboris givenforthe
activationof each processof production,a numberof equations
are obtainedequal to the numberof processes.For theproblem
to be solved,the numberof productiveprocesses(equations)
mustbe set equal to the numberof products.The unknowns,
then,are prices,therateof wages,and therateof profit.Once a
newequationis added designating a specificcommodity or bas-
ket of commoditiesas numeraire,there existsone more un-
knownthanequations.
An economically methodof approachingthissys-
significant
temis to eliminateall thepricesand conserveonlyone equation
whichlinksthe rateof profitto the rate of wagesexpressedin
thechosennumeraire.The assumptionof eithera givenrateof
wagesor of a givenrateof profitallows,then,forthecalculation
of the otherparameter.Fromthere,it is easy to solvethe price
equations.There is nottheslightest need,in thistypeof calcula-
tion,to determine the valuesof theindividual commodities.The
temptation to embarkupon sucha detourmustbe brushedaside
as a remnantof a mostdeceptivecontroversy.
Once thepricesof productioncalculationwithoutanyrefer-
ence to values is acknowledgedas meaningful, severalconclu-
sionslogicallyfollow.Manyimportant resultsof Marx'sanalysis
can be reachedon the basis of thisapproach.Not the least of
 BEYOND THE TRANSFORMATIONRIDDLE 435
thesederivations, forinstance,is of the famoustendencyof the
rateof profitto fall.
The explanatorypowerof the law of value does not lie in
themathematical derivation of thisor thatquantitative tendency,
although it servesas the basis for anysignificant understanding
of the typeof phenomenastudied.To clarifythisapparently
paradoxicalpoint,a metaphoricalcomparisonwiththe laws of
physicswill be attempted,despitethe factthatthese laws are
usuallyregardedas qualitatively differentfromthoseof political
economy.
For millenia,humanbeingshavebeen satisfied withthefol-
lowingreflections on phenomenarelatedto weight.Anyentity
withweightfallsif nothingstopsit,simplybecause thereexists
an up-down polarizationin the universe in which bodies
autonomously movein thesedirections. This conceptofweightis
a primeexampleof whathas been referredto earlieras a repre-
sentation,a thoughttotality deductedfroma specificpractice,in
thiscase, dailyobservations.10
It is now knownthatthesephenomenaare but particular
cases of a more generalphenomenoncalled universalgravity.
Bodies attractone anotheraccordingto the productof their
masses.Entitieswhichsurroundus do notappear to attracteach
other because theirmasses are relativelysmall. Their weight
manifeststhe factthat the mass of the earth is incomparably
largerthantheirown.
The representation is, thus,blownto pieces. Nonetheless,
manyarguments can no doubt be marshaledto defendit. In the
firstplace,it provesitselfperfectly efficient withinthe limitsof
thepracticalframework in whichithas been forged.Whatwould
be theuse foran apprentice jugglerto knowthathisobjectsare
attractedby the earthand attractone another?In the second
place,even a scientific approachcan, to a greatextent,accom-
modatethisrepresentation. It is possibleto calculatethatthedis-
tancetraveledbya fallingbodywithina vacuumis proportional
to the square of the durationof thefall.This resulthappensto
be a rigorousone whichcastsdisdainon the substitution of the
scientificconceptforthemererepresentation, sinceitcan be de-
rivedexperimentally, withouttheslightest referenceto thescien-
tificconcept.
to theGrundrisse
10 See Marx'sIntroduction in 1857.
(New York,1972),written
436 SCIENCE & SOCIETY
The equationsforpricesof productionconstitute just sucha
modeland, withinthelimitsof itsexplanatory power,thismodel
remainsan appropriatetool.
Because of itsverynature,a scientific concepthas no wayof
substituting itselfforsuch a model. Its own use is to provideun-
derstandingin a manner which willalwaysappear superfluousto
thosetheoreticians forwhomthemodelitselfis theultimatelevel
of knowledge.
The fallingobject representation is operativeat both the
Northand the SouthPole. Once one is aware of theroundness
of the Earth,however,the representation suffersfromits own
limitedscope and mustsomehowbe transformed to encompass
the new knowledge.The Earthattractsthe entities;such is the
natureof.thephenomenon.Entitiesdo notnecessarily fallin the
same wayat one pointon the Earth'ssurfaceas at anotherbe-
cause the Earthis not perfectly spherical.Again,theconceptof
gravity enables one to understand.
As soon as the fieldof dailyexperience,e.g., thesurfaceof
the Earth,is abandoned,the old representation becomestotally
irrelevant.In order to travelthroughspace, for example,one
mustsubstitute anotherconceptstructuremore consistent with
the scientificconcept.
The explanatory powerof thelabor theoryof value can be
locatedat the same levelof cognitionas thatof gravity. It pro-
videsan appropriateanswerto thedeeperquestionof thenature
of a givenreality, and neverfunctions as a substitute fora model
of the reality.
Withinthe limitsof relevanceof the pricesof production
model,e.g., the analysisof the competitive processof capitalist
society,the labor theoryof value by no means appearssuperflu-
ous; it providesa theoreticalaccountof the natureof the phe-
nomenaactuallyoccurring.It allowsus to interpret thepricesys-
temas a reallocationof sociallaboraccordingto strictly defined
rulesconsistent withthecapitalistcharacterof society.The actof
pricingdoes not createthe socialsubstance,but merelydistrib-
utesit.
The real act of productiontakesplace whenanyproductive
processis activated.This activity resultsin the increaseof the
socialsubstancetermedvalue.The pricesystemcan onlyarrange
the distribution betweenindividualsand among classes.If the
 BEYOND THE TRANSFORMATIONRIDDLE 437
priceof a set of inputsis multipliedby (1 + r), nothingis aug-
mentedor created.This is the core of Marx'stheory.
This approachavoidsthemisperceptions of vulgareconom-
ics accordingto whichpricesare formedby the simpleaddition
of a setof factorremunerations. In such a perspective, if a new
guestjoins the feast,he does not encroach upon anyoneelse's
portion.
In deprivingoneselfof a conceptualunderstanding of the
phenomenon, one can stillsimulate it,i.e., develop a model, but
in doing so a wealthof insightsof primaryimportanceis sacri-
ficed.
Drawinganotheranalogyfromthefieldpfphysics, thetem-
peratures of various bodies can be measured and calculated
withouttheleastnotionthatwhatis beingreferredto is nothing
else thanthe degreeof the agitationalmovementof molecules.
When temperaturesare reduced to movement,several basic
aspectsof thisphenomeonbecomefareasierto understand, e.g.,
theexistenceof a zero absolutetemperature.
This is also true in economics.It is probablypossibleto
derivethetendency of therateof profitto fallor to demonstrate
theerroneouscharacterof theso-called"profitupon alienation"
theoryon the basis of a pricesof productionmodel. Indeed,
mereadherenceto thelaw of valuedoes notprovideresearchers
witheveryresultconcerningthesetwo problems;it does allow
forexclusivetheoretical shortcuts and profoundcomprehension.
Moreover, as soon as the limits of the practicesforwhichthis
modelhas been forged(e.g., the studyof thecapitalistcompeti-
tiveprocess)are transcended,the scientific conceptimposesits
own necessity.
The labortheoryof value provesitselfindispensableto the
analysisof the mostbasic conceptsin politicaleconomy;in par-
ticular,those of commodityand capital. The nature of a
commodity-producing, capitalistsocietycannotbe derivedfrom
themerefactthatin sucha societygoods are sold and machines
are used in orderto produce.The successionof modesof pro-
ductionis to capitalistcompetition what,in our metaphor,space
is to the surfaceof the earth.
In order to understandthe transitionfromfeudalismto
capitalismor to investigate thenatureof the"socialist" countries,
of
one mustrelyon the basic concepts capital and commodity.
438 SCIENCE & SOCIETY
The factthatsomefeaturesof Sovietcalculationin planningmay
resemblepricesof productiondoes notproveanything as to the
real natureof thissociety.For it is preciselyat thisjuncture,the
inquiryintothe natureof a society,thata conceptualapproach
becomesimperative.
The correctattitudefora Marxistvis-à-vis pricesof produc-
tionmodelsshouldbe a moderateone. Such equationsconstitute
a reliabletheoreticaltool for the analysisof capitalistcompeti-
tion,despitethe factthatto renouncea conceptualapproach,
evenwithinthelimitsof thisspace,is to foregothepossibility of
anysubstantive cognition.Beyondthe limitsof thisspace,a sci-
entificconceptis indispensable.

///. THREE MISINTERPRETATIONS

Thus farthelabortheoryof value has been discussedapart
fromthecoursein whichthetransformation controversyhas his-
toricallyevolved. If one adheres to the perspectivepresented
here,the Marxistwriterson the"transformation" and theircrit-
icsappear to havefallenintothreefundamental misconceptions.
The firstconcernsthe value-priceconnectionor, more specifi-
cally,thetheoretical statusof thisrelation.The secondrefersto
the firstof Marx'stwoequalities,"sumof valuesequals sum of
prices,"whichhas been applied to the wrongaggregate.The
thirdaddressesthe definition of therateof surplusvalue in an
economy in which commodities are notexchangedin proportion
to theirvalues

1. Value and Price

The transformation which Marx seeks to undertakein
Volume III of Capitalis presentedas a transformation from
values to pricesof production.Manytheoreticians imagine,on
thisbasis,thatall thecomplexities
of thevalue-pricerelationcan
be confinedwithinthe limitsof the value-priceof production
articulation.
Taking advantageof thissame representation in a
differentand morenegativeway,someeconomistscontendthat
there exists no logical foundationfor such a transformation
because no relevantconnectioncan be establishedbetweenthe
twoautonomousspheresof value and price.11
11 C. Benetti,Valeuret Repartition
(Paris, 1974).
 BEYOND THE TRANSFORMATIONRIDDLE 439
This misinterpretation of thevalue-pricerelationconverges
withthe rathercommonidea whichinterprets VolumesI and II
of Capital as investigating"essences"or "abstractions" and
VolumeIII as addressingthe realmof concretephenomena.In
orderto refutethismisconception, it is sufficient
to simplynote
thatthe priceconceptis analyzedin Volume I. It is here really,
beforethequestionof pricesof productionis addressed,thatthe
price-form is introduced.
The commodity - whichis at thesametimea use valueand
an exchangevalue,¿.¿.,something bothdesirableandmaterializing
a certainfractionof social labor - revealsits own value only
throughtheexchangeprocessand onlyas expressedin thebody
of anothercommodity. It is in thismannerthatthelaborincor-
porated in a givencommodity willbe takenintoaccountin the
great metabolism of social labor and ratified.Value is not cre-
ated in the exchangeprocess, exchangemediatesthe social
but
acknowledgement of individuallabor. This is simplyanother
versionof the previouslyintroducedprice-valuerelationship.
Pricesdistribute a certainsocialsubstancewhileconserving it in
the same instance.
The specificcommodityused as the commonreferencein
thisprocessof reciprocalassessmentis termedmoney.Origi-
nally,priceis the expressionof ratifiedvalues manifested as a
certainamountof thismoney-commodity. the
However, analysis
of thismechanismdoes notimplythat,in fact,thecommonref-
erencemustitselfbe a commodity. On thecontrary, theconcept
of a symbolof money,i.e., moneywhichis not a commodity, is
clearlylocated in Volume I of Capital.12
The ideas of an evenlydistributed rate of profitand the
exchange of commodities proportional theirvaluesare notat
to
issue in the analysisof the money-form. They refer,instead,to
specificfeatures of the competitive processin varioussocialcon-
figurations.
It is possible,for example,to delineatethe workingsof a
simplecommodity economy(evenif such a modelis of dubious
historicalrelevance).In such an economy,non-capitalist inde-
pendentproducersswitchfromone activity to another as soon as
theirtoilor skillis under-assessed by the market.This competi-

12 Marx, Capital, Vol. I, Chapter 3, Section 2. c, "The Symbol of Value."

440 SCIENCE & SOCIETY
tivemechanismprovokesa tendencytowardsa pricesystemin
whichcommodity values are directlyreflected.
In the case of a full-fledged capitalistsystem,the same
mechanismoperatesin regard to the remunerationof wage-
laborers.If theirtoilor skillis not recognizedby the capitalist
employer,workerswillswitchto otherenterprises. In thisnew
social framework, however,the mechanismis paralleledby the
driveof capitalattractedby maximumprofitability. Thus, the
price system would distribute differently that which has been
createdduringthe period.Accordingto the analysisof produc-
tion,thiscorrespondsto the totalamountof sociallabor.13
Whateverthecompetitive regime,theprice-form alwayscor-
responds to the same process of the expression of social labor
timein thebodyof anothercommodity or in a symbolof value.
Marx'scalculationof pricesof productionin VolumeIII is con-
ducted in the category of labor time and constitutesa
reallotment of labortime,a processwhichdiffersradicallyfrom
thattheorizedthroughthe price-form paradigm.This two-fold
relationship can be summarized in the followingmanner:

Price Price

T
Priceform
Î
Priceform

'
Value as i
directexprès- Priceof
sion of incor- - ^
Transformation productionas
poratedlabor re-allotedlabor
time. time.

13 In whateverformof competition,thereare specificqualities of individuallabor which

are disregarded. Thus, individual discrepanciesare leveled out, and labor incorpora-
ted in unwanted productsis not ratifiedas social labor; the labor considered is said to
be socially-necessary,
abstractlabor. This homogenizationis brought about through
the very practices which result in a given competitiveregime. However, since this
 BEYOND THE TRANSFORMATIONRIDDLE 441

ManyMarxisteconomistsstillconfusethe law of value and

thelaw of exchange.We havealreadystatedthelawor theoryof
value: Value is labor,itsmeasureis labortime.Some willobject
thatthereis nothingin thisanalysisof value whichresemblesa
law. Actually,Marx frequently termedsuch qualitativedetermi-
nations"laws."
In anyevent,thereis onlyone law of value,whilethereare
twolawsof exchangein Marx'sCapital:exchangebased on com-
modityvaluesand exchangebased on pricesof production.This
can be understoodas pricesreflecting labor timeas it has been
incorporated, and pricesin the patternof a new "deal"of these
samehoursof labortendingto guaranteean equal remuneration
ofcapitals.Whichever of thesetwolawsprevails,theexplanatory
power of the labor theoryof value remainsunaffected.That
commodities exchangein proportionto incorporated labordoes
notproveto be anymorehospitableto thelabortheoryof value,
but ratherrepresents case of exchange.
an alternative

2. Net and GrossProduct

For decades,thetransformation controversy has,as a whole,
hinged on the of
necessity the simultaneous verification of the
twoconditions:Sum of values = sum of prices,and sum of sur-
plus value = sum of profit.Some economistshave even
attempted to define conditionsin which these two equalities
wouldhold.14This appears possibleonlyin a regimeof propor-
tionalgrowthwhereall surplusvalue is accumulated.It cannot
be maintained,however,thatMarx regardsthisspecificcase as
the normalpathof capitalistdevelopment.
Problemsrelatedto the secondequalitywillbe addressedin
the followingpoint;we willconcentrate, forthe timebeing,on
the firstcondition.
The equalitybetweenthe priceand the value of socialpro-
ductionmustbe establishedon thebasisof the netproduct,not
the grossproduct,of a givenperiod. In the framework of an
annualperiodof production, it is clearthatall nationalaccount-
ing and economic calculationaddressesthe yearlynet product
reductionis achieved regardlessof the competitiveform,its analysislogicallybelongs
to the theoryof value, and not to the theoryof competition.
14 G. Abraham-Froisand E. Berrebi, "Le problème de la 'Transformation':fin d'une
controverse,"EconomieAppliquée,Tome XXIX, No. 4.
442 SCIENCE & SOCIETY
(disregardingthe problemof amortization).It would never
occur to anyoneto take into accountthe totalsof the columns
and rows of an input-output table. Yet this is preciselywhat
equalitybetweentotal(gross)priceand totalvaluewouldmean.
The greatinsightwhichlies at thebasisof thelabortheory
of value is the linkingof the totallabor expended in a given
periodwiththe productionassociatedwithit,i.e., the net prod-
uct.The priceof thisnet productis equal to thetotalincomeof
the period or, in the traditionallanguage of the price-of-
productiondiscussion,the sum of wagesand profit.
In orderto analyzea specificsystem of pricesand valuesat a
givenmomentin time,an assumptionof a constanttechnology
mustbe adopted.It is thuspossibleto considera giventechnol-
ogyin whicheach laborprocessprovidesthe following one with
its requiredinputs.Difficulties arise because some inputsare
inheritedfromthe previousperiod. Marx consistently makes
clearthatinputsinheritedfroma previousperioddo notmerely
"transmit" theirvalues or pricesof productionto the objectof
productionin thepresentperiod.In fact,theseinputshaveto be
re-valuedaccordingto the conditionsof productionwhichpre-
vail in the new period.
The expressionof valuesin pricestranslates thereallotment
of the social labor of the period accordingto a unique set of
prices applicable both to commoditiesproduced during the
periodand to thoseinheritedfromthepreviousone. The condi-
tionforthe equalityof pricesand values can be rewritten in a
less ambiguousmanneras the relationshipbetweenthe total
incomeof the periodand the totallabor expended.
That inventories can be carriedover fromone production
period to another has long been a source of greattroublefor
Marxisteconomists.The difficulty is thatthe value createdas
wellas itscounterpart, totalincome(or thepriceof thenetprod-
uct),cannotbe completely arrivedat whenconsidering onlyone
period. While thisproblemappears to be crucial
particularly in
relationto fixedcapital,it also concernsanystocksof commodi-
tiescarriedover fromone period to another.This provisional
lackof determination is commonto categoriesof value,priceof
and
production money.The resolution of thispointconstitutesa
technicalsophistication of the overallissue,but does not affect
thebasic theoretical questions.
 BEYOND THE TRANSFORMATION RIDDLE 443
3, Exploitation
and Exchange
One of the foremostaspects of Marx's investigation in
VolumeI ofCapitalis hisdemonstration in cap-
thatexploitation
italistsocietyis consistentwiththe laws of exchange.As Marx
assumesin Volume I thatcommodities, includinglabor-power,
exchangeat theirvalues,exploitation can be unveiledevenwhen
buylabor-power
capitalists and sellcommodities to workersall at
theirvalues. Hence, thisexploitationcannotbe regardedas a
formof swindling,or violationof the rules of the capitalist
"game."Exploitationmustbe demonstrated by assumingonlya
"normal"functioning of thecapitalistsystem.Threeelementsare
at issue here: the law of value, the law of exchange,and the
theoryof surplusvalue.
The usual orderingof theseelementsappearsas follows:

Law of value - > Theory of surplusvalue - » Law of capitalist

exchange

On the basisof immediatedeterminations of values,a rateand

totalamountof surplusvalue is calculated.The law of capitalist
exchangeaccordingto prices of productionis then deduced
fromthispremise.Proceedingin thismanner,however,over-
looksthe factthatMarx'stheoryof surplusvalue relieson the
assumptionof exchange of commoditiesaccordingto their
values.Therefore,the actualorderingshouldbe:

Law of value - > Law of simple- > Theoryof - » Law of

commodity surplus capitalist
exchange value exchange

is not valid.Obviously,
Now it is clearthatthisformulation
twolawsof exchangecannotexistsimultaneously. The relevant
chainwhichmustunderlieour reasoningis:

Law of value - » Law of exchange - > Theoryofsurplusvalue

(simplycommodity
or capitalist)

While value is createdin the productionprocess,surplus

444 SCIENCE & SOCIETY
value is the resultof boththisprocessand the determination of
thefraction of valuewhichreturnsto theworkers.This determi-
nationoccursin connectionwiththe normallaw of exchange,
assumingno transgressions of thislaw by capitalists.
In an economywherethehoursof productive laborare thus
reallocatedto thenet productas a resultof a capitalistcompeti-
tiverequirement, therateof exploitation
mustbe calculatedtak-
ing into account theactual allocation.
The consequencesof this theoreticalrearrangement are
considerable.Three such consequencesmay be distinguished.
First,a uniformrateof surplusvalue,whichis postulatedin the
traditional view,has absolutelyno meaningunlessit is assumed
thatall workersconsumean identicalbundleof commodities. If,
on theotherhand,freedomof choicein consumption exists,no
competitive mechanism, e.g., absolutelabor mobility,can set in
motiona tendencytowarda uniformrateof exploitation.
Everyinnertendencyof the capitalistmode of production
must manifestitself through behavior and practicesoften
referredto as competitive mechanisms. The innerlaw theorizes
theoutcomeof suchpractices.If it imposesitselfon agents,it is
as an oftenparadoxicalresultof thesepractices.Hence, Marx's
elegantformulation:
. . . theimmanent lawsofcapitalistproductionmanifestthemselves in
theexternal movement oftheindividual assert
capitalist, themselvesas
thecoercivelawsof competition, and thereforeenterintothecon-
sciousness of theindividual as themotivewhichdriveshim
capitalist
forward.15

Second, in the traditionalapproach to the transformation

problemany assessmentof the rate of surplusvalue becomes
irrelevant ifanypartof wagesis saved.Surplusvaluecan be cal-
culatedonlywhenone knowsexactlywhatworkersconsume.It
is forthisreason thateconomistsin the traditionalframework
definethevalueof labor-powerin termsof a vectorofcommodi-
ties. Ironically,one can show thatan infinityof such bundles
resultsin thesamerateof profitwhenthesameshareofwagesis
guaranteedin thepriceof thenetoutput.16 In fact,exploitation
is logicallypriorto consumption.
15 Marx, Capital, Vol. I, Chapter 12 (Marx Libraryedition, 1977, p. 433).
16 Gérard Duménil, "Une approche fonctionnelledu Theoreme marxien fondamental
d'Okishio-Morishima,"Cahiersd'EconomiePolitique,No. 7.
 BEYOND THE TRANSFORMATIONRIDDLE 445
Third,one can show,on thebasisof the traditional calcula-
tion, that the famous relation:
Rate of profit= rateof surplusvalue
__
1 + organiccompositionof capital
whichgovernsthe studyof thetendencyof therateof profitto
fall,can be establishedonlyif thedenominatoris definedin an
arbitrary and unsatisfactory way.
Givena setof price-of-production equationsand thestipula-
tion, as in the traditional
interpretation,of a vectorof workers'
consumption(usuallyper unit of wages), the systemcan be
solved.Pricesand the rate of profitare determined.A rate of
surplusvalue based on incorporated laborcan also be calculated
in conformity withthetraditional perspective.The rateof profit
is thusfunctionally linkedto thisrateof surplusvalueaccording
to a relationof the same typeas in the paragraphabove,which
can in no waybe alteredsinceit is derivedfromthesetof equa-
tions utilized.It remains to be seen what the denominator
signifies.17 This denominatorprovesto be the sumof unityplus
a ratio which resemblesthe organic compositionof capital
expressedin priceterms,and relatednotto theactualeconomic
systemas a wholebut to a sub-system whosenet productis the
workers'consumption bundle.
Apartfromthecuriousbutconsistent characterof thisasso-
ciationof two ratios,one expressedin value (rate of surplus
value) and the otherin pricesof production(organiccomposi-
tionof capital),thewholedynamicof thecapitalistsystemseems
to stemfromtheconditionsof productionof workers'consump-
tion! Such an approach to the rate of surplusvalue impliesa
completere-framing of VolumeIII of Capital.The onlyremedy
wouldbe to contendthatthestudyof thetendencyof therateof
profitto fallrequiresanotherformulaexpressingexploitation in
pricesof production,in whichcase one would converge, at the
expense of a puzzling detour,with the interpretationwhichI am
proposing.
To summarizethisinterpretation: The priceof production
of the net productis assimilated to the totalamountof labor
expendedin the period,thusestablishing the "price-value"con-
dition.The rateof surplusvalueis interpreted in termsof prices
17 Duménil, De la valeuraux prixde production,
op. cit.
446 SCIENCE & SOCIETY
of production;the'sum of profit= sumof surplusvalue"condi-
tionthusbecomesa tautology.

IV. MARX'SCAPITAL AND THE NEWINTERPRETATION

That the transformation controversy has been so deep and
persistent for over a centuryis due to the existenceof some
ambiguity in Marx'stext.
VolumeIII of Capitalwas publishedby EngelsafterMarx's
death.It consistedof an ensembleof manuscripts and noteswrit-
tenpriorto thepublicationof VolumeI. Its formand, to a cer-
tainextent,itscontent,are farfromperfect.In particular, itcan
neverbe emphasizedenoughthatMarx had onlya preliminary
idea of thecontentof VolumeII at thetimehe wrotethemanu-
script.To pretendthatthe expositionof the transformation in
Volume III is perfectdoes not do serviceto the memoryof a
geniusthinker.
However,there exist more fundamentalreasons beyond
thoseof formtojustifysuch difficulties of interpretationin this
particularcase. They arise from theverylineof development of
Capital.The book beginswiththe analysisof the commodity,
throughwhichtheconceptof valueis introduced.The investiga-
tionof productionappearslateras a preliminary to thestudyof
surplus value. The social dimension of this processis presented
in
only VolumeII. Severaldangersarisein connectionwiththis
methodology.
First,the conceptof value is derivedfromthe analysisof
exchange.The essenceof Marx'sargumentis as follows.Whena
givenamountof one commodity is viewedin theexchangeproc-
ess as equivalentto an amountof anothercommodity, one actu-
ally refers to a social substance they have in common beyond
theirobviousdifferences as use-values.This resultsfromthefact
thatbothcommodities are productsof humanlabor.
This mode of introductionto the labor theoryof value
embodiestheriskofconfusingtheconceptof valuewiththecon-
ceptof price.Fromtheoutset,thesystemof valuesappearsas a
particularprice system.To rescue the reader of Volume III
fromsuch a misconception is a mostdifficult task.Warningsin
VolumeI againstsuchan erroneousassimilation are usuallyper-
ceivedby readersto be a typeof intellectual exerciseof extreme
refinement.
 BEYOND THE TRANSFORMATIONRIDDLE 447
Second,whenthisanalysisis developedin VolumeI, Marx
has not yetstudiedthe labor processand no allusionhas been
made to the natureof capitalor to the investigation of more
complexcategoriessuch as rent.Labor is thusmentionedas the
sole originof all productionwithoutany mentionof capitalor
land. Such issues,however,are highlycomplicatedand require
profounddiscussion.Economicsis stillsplitintovariousfactions
oversuchissuesto thisveryday.To ask thereaderto disregard
all thesepossibleobjectionswithoutmentioning themis to run
the riskof beingmisunderstood.
Finally,the requisitesocial scope of the conceptof value is
surreptitiously introducedthroughtheconceptof sociallyneces-
sary labor. Focusingon individualexchangearidnothavingpre-
viously elucidated the processof socialreproduction, thissocial
dimensioncan onlybe tackedon in a moreor lessartificial man-
ner.
The relevantquestion,however,is whetheror notitis possi-
ble to followa differentline of argument.And thisquestion
leads to anotherconcerning thenecessityof Marx'splan forCap-
italas it exists.
Capitalcontainsan expositionof conceptsintroducedin the
following order:commodity, money,and capital.The conceptof
is
capital analyzed in two stagescorresponding to the two sub-
systemswhichlogicallycomprise this thoughttotality:valoriza-
tionstructure (VolumeI) and circulation structure(VolumeII).
VolumeIII addressesthoseprocesseswhichcan be graspedonly
on the basis of the articulation of the twoforegoingstructures.
This plan eminentlylogical,althoughit is clear that it
is
emphasizesone dimensionof capitalistrelationsof production:
the demonstration of exploitation,from surplus value to its
formsas enterpriseprofit,interestand rent.
No miraclesolutionexiststo theproblemof thelinearexpo-
sitionof a systemof interdependent concepts.Marxchoosesthis
plan becauseitbestsuitsthe principalaim of hisdemonstration:
the characterization of the capitalistmode of productionas a
specifictype of classsociety.Whiletheissueof pricesis certainly
an importantone, it is clearlysubordinatein thisplan to the
questionof exploitation.In regard to prices,the elucidation
remains rigorous albeit somewhatdangerous and has thus
resultedin the mostdeleteriouscontroversy.
448 SCIENCE & SOCIETY
If thesolutionMarxpresentsto thetransformation problem
has been misperceived,the questionremainsas to the ultimate
foundationof his analysis.It mustbe noted thatMarx himself
was perfectlyaware of the unsatisfactorynatureof the calcula-
tionhe developedin the beginining of VolumeIII. One cannot
transform valuesinto pricesin reallocatingsocial surplusvalue
withoutfirstmodifying the valuationof constantcapital:
The development givenabovealso involvesa modification in thedeter-
minationof a commodity's cost and price.It was originally assumed
thatthecostpriceof a commodity equaled the"value" of thecommodi-
tiesconsumedin itsproduction.But forthebuyerof a commodity, itis
thepriceof production thatconstitutes
itscostpriceand can thusenter
intoformingthepriceof anothercommodity. As the priceof produc-
tionof a commodity can divergefromitsvalue,so thecostpriceof a
commodity, in whichthe priceof productionof othercommodities is
involved,can also standabove or belowthe portionof its totalvalue
thatis formedbythevalueof themeansof productiongoingintoit. It
is necessaryto bearin mindthismodifiedsignificance of thecostprice,
and therefore to bear in mindtoo thatifthecostpriceof a commodity
is equated withthe?value of the means of productionused up in
producingit,it is alwayspossibleto go wrong.Our presentinvestiga-
tiondoes not requireus to go intofurther detailon thispoint.18

As directly
suggestedbyMarx,theonlymethodof achieving
this correctionis to indicatethe physicalcompositionof the
inputsand revaluatethemaccordingto pricesof production.It
is erroneousto claimthatthe prices-of-production formulation
belongsto the neo-Ricardianschool.To rectifyMarx'scalcula-
tionaccordingto his own suggestionnecessitates theuse of such
equations.
Havingnotedtheproblemhimself, it mightbe objectedthat
Marxcould have discoveredthatthetwomajorequalitiespostu-
latedon the socialaggregatescannotbe simultaneously verified.
We go so faras to contendthatthereexistsubstantive grounds
upon whichto believethatMarxwas aware of thisimpossibility
despitethe factthathe neverrectified his solution.WhenMarx
introducesthefamousequalityof thesumof valuesand thesum
of prices,he stipulatesa reservation
whoseimportanceremains
unnoticed:

18 Marx, Capital, Vol. Ill, Chapter 9, p. 264.

 BEYOND THE TRANSFORMATION RIDDLE 449
And in thesamemanner,thesumof pricesof production forthecom-
moditiesproducedin societyas a whole- takingthe totality of all
branchesof production- is equal to the sum of theirvalues.
This seemscontradicted by the factthatthe elementsof produc-
boughton themarketin capitalist
tivecapitalare generally production,
so thattheirpricesincludean alreadyrealizedprofitand accordingly
includethe productionpriceof one branchof industry togetherwith
the profitcontainedin it,so thattheprofitin one branchof industry
goes intothe costpriceof another.19
It is not simplya matterof mereaggregation.Because cer-
taincorrections Marxconcludesthenextpara-
appear necessary,
graph with the statement:
To applythismethodof reckoningto thetotalsocialproduct,we have
since,consideringthe wholesociety,the
to makecertainrectification,
profitcontainedin the price flax,forinstance,cannotfiguretwice,
of
not as bothpartof the priceof thelinenand as the profitof the flax
producers.20
This errorof double-counting is notapproachedin a verysatis-
factory manner because Marx had not yet writtenthe manu-
scriptsof Volume II when he wrotethose of Volume III. As
VolumeII reveals,however,theonlywayof avoidinganydouble
countingwithregardto socialincomeis to undertakethecalcula-
tionin termsof net output.
As faras therateof surplusvalue is concerned,Marx'srea-
soninghas also not attractedsufficient
attention:
As forthe variablecapital,the averagedailywage is certainly
always
equal to the value productof the numberof hours thatthe worker
mustworkin orderto producehis necessarymeansof subsistence; but
thisnumberof hoursis itselfdistortedbythe factthattheproduction
prices of the necessarymeans of subsistencediverge from their
values.21

The totalnumberof hoursof labortimenecessaryforthe pro-

ductionof workers'consumptionis itselfforgedbecause of the
of valuesintopricesof production.
transformation

19 Ibid., p. 259.
20 Ibid., p. 260.
21 Ibid., p. 261.
450 SCIENCE & SOCIETY
However,thisis alwaysreducibleto thesituationthatwhenever too
muchsurplus-value goes into one commodity, too little
goes into
andthatthedivergences
another, from valuethatobtainintheproduc-
tionpricesofcommoditiesthereforecanceleachotherout.22
This passagesuggeststhatMarxis erroneously assumingthatthe
of
value/prices productiondiscrepancies in the workers'con-
sumptionbasketwillcompensateexactly.
It is as easy to showthatthisstrictcompensationdoes not
existas it is to demonstratethatMarx himselfis aware of this
result.If suchwerenotthecase,whywouldhe followup in this
manner?
Withthewholeofcapitalist production,itis alwaysonlyina veryintri-
cate and approximate way,as an average perpetualfluctuations
of
whichcan neverbe firmly fixed,thatthegenerallawprevails as the
dominant tendency.23
Withthe hypothesisof a strictcompensation,thelaw wouldnot
apply in an "approximateway" but ratherin a "firmly fixed"
manner.
Despitetheexistenceof someambiguity in thetextand line
of argumentin Capital,thereare good reasonsto believethat
whathas been termedthe "newinterpretation" is in factmore
thanone centuryold.
France
Fontenay-Aux-Roses,

22 Ibid.
23 Ibid.