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Library:Stalin’s rise to power

2026-02-15T03:16:15Z

Ismael:

{{#ev:
service=YouTube|
id=https://youtu.be/LWdqFFnIRqY|
alignment=center}}

{{Library work|title=Stalin's Rise to Power|author=James Harris|audiobook=https://www.youtube.com/watch?v=LWdqFFnIRqY}}

Do Stalin's strengths or his opponent's weaknesses better explain his victory in the struggle for power after Lenin's death? I'll start with a little context, an outline of the key events between the bolshevik seizure of power in November 1917 and Lenin's death in January 1924. I'll then say something about how historians have disagreed about why Stalin won the power struggle and look at some of the key approaches to the question. In particular: the importance of Stalin's position as general secretary of the party, the policy debates of the 1920s and the Soviet political culture.

== Key events from Nov. 1917 to Jan. 1924 ==
So we'll start with a little context.

The bolsheviks, a group of 20 000 or so committed revolutionaries, led a ''coup d'etat'' in St Petersburg, the capital of the Russian empire, on November 7, 1917.

Taking power in the capital was the easy bit, after that, they had to take power in the rest of the world's largest country. And they had to do that while fighting a war against Russian and foreign armed forces determined to stop them. They succeeded in the course of the following two and a half years but not without very real costs.

Infrastructure was devastated and the economy was running at about 5% of capacity. The working class was upset with the regime. The army was beginning to mutiny and the peasantry were on the verge of rebellion.

In order to ensure the survival of the new state and to reinvigorate the economy, bolshevik leaders accept the need for a partial restoration of capitalism: the New Economic Policy (or NEP, as this shift was known) quickly generated substantial economic growth such that what had begun as a retreat was gathering supporters.

The story of the power struggle and of Stalin's rise begins when the universally acknowledged leader of the bolsheviks, Vladimir Lenin, who had spoken out both for and against NE died, as I said in January 1924. The struggle took place against the background of debate over policy over NEP and over the future of communism.

So why did Stalin succeed Lenin and not Trotsky, or Zinoviev or Bukharin?

== Historians on Stalin’s rise and the role of ideas ==
So I'll talk a bit now about historians on Stalin's rise, and particularly on their thoughts on the role of ideas versus machine politics in Stalin's victory.

So let me take a few minutes to discuss the different ways this question has been answered by historians since the events themselves.

From the early 1930s friends of the Stalin regime insisted that their leader won because he stuck most closely to Lenin's ideas, and because his opponents drifted away from leninism towards counter-revolution. They insisted that policy debate and ideas were the key to the struggle.

The losers in the struggle insisted that ideas didn't matter because Stalin was party general's secretary. The general secretary had the power to appoint all top party officials. Ideas didn't matter because Stalin had stacked the party with officials personally loyal to him, people who would support him regardless of the policy options. They insisted that Stalin's control of the party machine was what mattered in the struggle.

Whereas Henri Barbusse represents the first group, Leon Trotsky perhaps best represents the second. That is, whereas on Henri Barbusse represents the friends of Stalin, Leon Trotsky his opponents.

So from the 1930s until the late 1960s the consensus among historians roughly aligned with Trotsky's view; that is, Stalin's control of the party machine played the decisive role in the power struggle. Among those historians putting forward this view are for example: Isaac Deutscher, Merle Fainsod, Leonard Schapiro, Robert Daniels...

But in the late 1960s when cold war tensions were relaxing, the Soviet Union had reformed substantially since Khrushchev came to power, and the younger generation in the western democracies was going through a period of rebellious idealism, such that the role of ideas in Soviet politics was once again taken more seriously. Stalin's control over the party machine still mattered to historians, but it was thought that the fact that Stalin appointed top officials didn't itself guarantee total loyalty. So to quote Robert Tucker in his book ''Stalin a political biography'' (1973):<blockquote>"a would-be party chief had to develop a politically persuasive program and to be convincing in his way of presenting it in higher party circles"</blockquote>In the 1970s and 80s social historians added a new twist to the story. They observed how social conditions, popular culture, and the culture of the bolshevik party favored Stalin's victory: Russian backwardness, low levels of literacy and the weight of Russian autocratic tradition meant that most of Russians were tolerant of Stalin's heavy-handed ways. Meanwhile the bolshevik party which had grown from a 20 000 strong underground to a 1.2 million member super bureaucracy was now much less educated on average and had a much weaker understanding of marxism-leninism. Stalin's simple formulations of leninism appealed to them. His presentation of his opponents as splitters and party debate as a dangerous luxury hit accord with the party rank and file.

Since the 1980s almost nothing has been written on the subject, such that the current consensus is that all these factors: policy debate and ideas, control of the political machine, political culture... all of these played a role in Stalin's rise to power.

An answer to the question of whether Stalin's strengths or his opponent's weaknesses better explain Stalin's victory demands that all of them be given some consideration, so let's look at each in turn, starting with Stalin's role as general secretary of the party.

== Factor 1: Stalin's role as general secretary of the party ==
If the party general secretary was such an important job, so important to the struggle for power... why did Stalin's opponents let him take it without any resistance? The short answer is because it was a job no one wanted.

Stalin took over responsibility for the appointment of senior party officials at a time when the party bureaucracy was expanding faster than it had ever done or ever would. Appointing the right people to the right jobs was extremely important and before Stalin took over, the secretariat had not been coping with its task. It's worth observing here that Lenin offered the job of general secretary to Stalin and no one else because Stalin was the most able administrator in the party.

Do not fall for Trotsky's characterization of Stalin as a mediocrity. He had been a member of Lenin's inner circle for years and not for nothing. No one else wanted the job because they saw it as a dreadful bureaucratic burden.

But did they not see that the job was an opportunity to promote friends and followers. You need to think about that. In the late 1940s the historian Isaac Deutscher argued that Stalin "pack political offices with friends henchmen and followers". In the 1950s and 1960s Robert Daniels suggested a more subtle version of this: that there existed what he called a "circular flow of power" in which Stalin offered officials security of tenure if they supported him at major party meetings.

But as I mentioned, by the 1970s and 80s historians began to doubt that the fact of appointment by the secretariat was enough to guarantee political loyalty. Research in the archives of the party secretariat has finally established that the idea that Stalin controlled the party apparatus by appointing his followers is largely a myth spread by Stalin's opponents. In fact, through the 1920s the secretary was appointing thousands of officials every year. Stalin did not and could not know in detail personally or politically who was being appointed. What's more, there isn't the scrap of evidence that Stalin tried to use his role as general secretary to remove those who sympathized with his opponents.

But you should be careful here. I don't mean to suggest that the secretary had played no role in his rise to power, indeed it played an important role. But one that didn't involve any control over party officials. The secretary provided Stalin not with control but rather with information. In the course of its work the secretariat received a steady stream of reports from party institutions all over the country. Consequently, Stalin knew the preferences, wants and fears of senior party officials better than any of his opponents. He was in a better position than his opponents to gain their support by catering to those wants and fears.

You can see then, that historians views of the secretariat have changed radically since the 1950s. In the 1950s historians thought that Stalin controlled senior party officials, in the 1970s and 80s historians had a hunch that Stalin could not rely on the loyalty of senior officials; and this has been confirmed by the recent research, but in a way that suggests a very different role for the secretariat and Stalin's rise, one that makes the role of ideas and policy debate seem ever more important.

== Factor 2: Policy debates of the 1920s ==
So let's talk about that debate for a minute. In preparing for your A levels you should have a sense of the broad differences of opinion among the contenders for power, and who was in the politburo majority when... but it becomes kind of tedious and unnecessary if you go into too much detail, so I'll keep my review very simple

{{#ev:
service=YouTube|
id=https://youtu.be/CS7yZPflUPI|
alignment=center}}

The single most important issue in the policy debate was NEP and how best to build a socialist society.

In the first phase of the succession struggle Trotsky was the first to argue that the mixed economy of NEP was leading to capitalism and not to socialism. He proposed accelerating the growth of socialist industry by increasing the taxes on the capitalist peasantry. He and his followers, notably Yevgeni Preobrazhensky, refer to this as “primitive socialist accumulation”.

That much is straightforward but you must keep two things in mind: first, all the contenders for power twisted and caricatured their opponent's ideas if it gave them an advantage; second, policy positions were dynamic, changing, logically, as circumstances changed, so did the views of politicians.

Now, Stalin's program which is referred to as “socialism in one country” was intended as a dig on Trotsky who had argued after the revolution that to build a socialist society in Russia there would need to be revolution abroad, that is, that Russia would need assistance from abroad.

Now, Trotsky no longer pressed this idea after it had become clear that there was no prospect of revolution in Europe... but Stalin did not let him forget his earlier words, because it made him look like a defeatist.

Meanwhile, Stalin also responded to Trotsky's idea of “primitive socialist accumulation” with a defense of NEP and a warning that increasing taxes on the peasantry would put the very real successes of the NEP economy at risk. It seemed a sensible position in the early 1920s when NEP was generating double-digit growth.

By 1925, Trotsky had been isolated. Was that because of the inferiority of his ideas? Probably not. The reason for Trotsky's isolation were more personal than political or ideological. The fact of the matter is: nobody in the politbureau liked him. He was arrogant, he was not a team player. The members of the politbureau couldn't imagine running the country under his leadership. That, rather than his policies was Trotsky's main weakness.

Meanwhile, things in the rest of the politburo were not especially happy:

* Nikolai Bukharin had become perhaps an over-enthusiastic supporter of NEP, and a reliance on its capitalist elements, that is, the well-to-do peasant (the kulak) and the petty trader (the nepman).
* Zinoviev and Kamenev did not share Bukharin’s willingness to embrace NEP capitalism. They also worried that Stalin was accumulating too much personal power. And the combination of the personal and political encouraged them to break with the politburo majority and joined their old enemy Trotsky and form the United Opposition. Together they attacked NEP; and together, the majority, defended NEP thought not exactly in the same terms.

NEP was still generating substantial rates of growth... though everyone knew that substantial new investment in industry would be necessary for those rates of growth to remain high.

* Stalin emphasized the importance of central planning and measures to improve industrial efficiency in generating new investment.
* Bukharin acknowledged these but insisted that capitalist elements would have to continue to play an important role in the economy.

Now many historians have argued that Stalin used the policies of the right to defeat the left; and then, adopted the policies of the left to defeat the right. That Stalin in this sense was an unprincipled political opportunist.

These historians fail to see that by the mid-1920s, as the prospective of the first five-year plan came to be seen as providing solutions to the problems of NEP, the whole of the party elite was moving to the left. Stalin and the politburo majority defeated the United Opposition because in 1927 there was little to separate the promise of their economic policies. Why risk a change when the majority was achieving good results? Again, Stalin was able to present his opponents as splitters, as pointlessly challenging central policy.

The last phase of the policy debate was between Stalin and Bukharin both of whom continued to drift to the left. Stalin shared with the politburo majority a growing enthusiasm about the potential of the five-year plan. Bukharin was willing to accept that more would have to be done to contain capitalist elements, but he thought that Stalin was going too far, that Stalin's harsh measures against wealthy peasants in 1928 and after were dangerous. He also publicly worried that enthusiasm for the plan was going too far, that plans were not realistic, “you cannot -to use his words- build today's factories with tomorrow's bricks”. Bukharin’s worries were well placed, the plans were unrealistic, the confrontation with the peasantry proved devastating, but he predicted a crisis that didn't come until the early 1930s, and while he issued warnings of doom output figures continued to rise beyond expectations. Yet again, Stalin could present his opponents as blind to the correctness of central policy, as unnecessary ballast best cast overboard, in short, again, as splitters. In 1929 Bukharin and his followers were cast aside, and from that point Stalin's rule never again faced a serious challenge.

== Factor 3: The political culture ==
Now that takes us to our next factor, that is the political culture of the bolshevik party... of Bolshevism.

Remember that in the 1950s and 1960s historians only really ever looked at high politics. If Stalin controlled the party machine, as they believed through the secretariat, then there was no point in looking anywhere else. But when in the 1970s and 80s historians started to take policy debates seriously, then suddenly it mattered who those policies were being presented to. Was it to the millions strong party rank-and-file? Was it being presented to the several thousand top party officials?

Twenty years after the revolution, at a small get-together in the Kremlin after the red square parade, Stalin reminisced about the power struggle to his close associates in the politburo. There he stressed the importance of his overwhelming popularity among the broad party rank-and-file. He was almost certainly right about this. The rank-and-file were for the most part barely literate, and knew little of marxism-leninism, they were the most comfortable with the authoritarian traditions of czarism, and the least likely to understand the complexities of the policy debates, they were likely to be the most happy for those policy debates to come to an end, they appreciated Stalin's efforts to explain leninism in very simple terms, and were drawn to his self-presentation as Lenin’s one true disciple. It is not difficult to see how Stalin could rely on their support.

But what's more striking about Stalin's reminiscences, is that his praise for the rank-and-file implies a criticism of… a lack of trust, in senior officialdom. This group had higher levels of education, they understood the terms of the policy debates, they did not need Stalin's simplifications of leninism, they knew that Trotsky and Bukharin were more sophisticated thinkers than Stalin. Now this didn't mean that they naturally opposed Stalin. Stalin had always presented himself as representing the middle ground, as leader of the majority: he moved to the left as they moved to the left... and his policies were generally successful: the economy continued to grow rapidly through the 1920s despite predictions to the contrary from his opponents (from the left and from the right). Stalin seemed to be a safe pair of hands. He carried the support of the party elite too, but he was aware that their support was conditional, less certain, more measured. The support of the party elite was most important to the leadership struggle because they, or at least the top 175 or 200 officials represented within the party central committee, they were empowered by party rules to elect the politburo, they had it in their power to remove Stalin... but they did not, they supported Stalin. But Stalin knew it was a close-run thing. The great terror of 1936-38 was in no small part driven by Stalin's fear that he could not rely on their loyalty.

== Summary ==
So by way of a summary let's return to the question: Do Stalin's strengths or his opponent's weaknesses better explain his victory? In short, Stalin's strengths mattered more. What were they?

# his position as general secretary of the party,
# his ability to hold the majority of the politburo,
# his ceaseless attention to the details of factional politics,
# the success of his policies and
# his popularity among the rank-and-file of the party.

And briefly on his opponent's weaknesses

# Trotsky was unpopular and distrusted within the politburo,
# neither he nor Zinoviev and Kamenev within the United Opposition... none of them removed Stalin when they had the chance,
# Trotsky didn't play the game of factional politics, he lost opportunities,
# Bukharin's ideas later in the 1920s were out of tune with a party drifting to the left.

Library:Stalin’s rise to power

2026-02-15T03:14:26Z

Ismael: Created page with "{{Library work|title=Stalin's Rise to Power|author=James Harris|audiobook=https://www.youtube.com/watch?v=LWdqFFnIRqY}} Do Stalin's strengths or his opponent's weaknesses better explain his victory in the struggle for power after Lenin's death? I'll start with a little context, an outline of the key events between the bolshevik seizure of power in November 1917 and Lenin's death in January 1924. I'll then say something about how historians have disagreed about why Stali..."

{{Library work|title=Stalin's Rise to Power|author=James Harris|audiobook=https://www.youtube.com/watch?v=LWdqFFnIRqY}}

Do Stalin's strengths or his opponent's weaknesses better explain his victory in the struggle for power after Lenin's death? I'll start with a little context, an outline of the key events between the bolshevik seizure of power in November 1917 and Lenin's death in January 1924. I'll then say something about how historians have disagreed about why Stalin won the power struggle and look at some of the key approaches to the question. In particular: the importance of Stalin's position as general secretary of the party, the policy debates of the 1920s and the Soviet political culture.

== Key events from Nov. 1917 to Jan. 1924 ==
So we'll start with a little context.

The bolsheviks, a group of 20 000 or so committed revolutionaries, led a ''coup d'etat'' in St Petersburg, the capital of the Russian empire, on November 7, 1917.

Taking power in the capital was the easy bit, after that, they had to take power in the rest of the world's largest country. And they had to do that while fighting a war against Russian and foreign armed forces determined to stop them. They succeeded in the course of the following two and a half years but not without very real costs.

Infrastructure was devastated and the economy was running at about 5% of capacity. The working class was upset with the regime. The army was beginning to mutiny and the peasantry were on the verge of rebellion.

In order to ensure the survival of the new state and to reinvigorate the economy, bolshevik leaders accept the need for a partial restoration of capitalism: the New Economic Policy (or NEP, as this shift was known) quickly generated substantial economic growth such that what had begun as a retreat was gathering supporters.

The story of the power struggle and of Stalin's rise begins when the universally acknowledged leader of the bolsheviks, Vladimir Lenin, who had spoken out both for and against NE died, as I said in January 1924. The struggle took place against the background of debate over policy over NEP and over the future of communism.

So why did Stalin succeed Lenin and not Trotsky, or Zinoviev or Bukharin?

== Historians on Stalin’s rise and the role of ideas ==
So I'll talk a bit now about historians on Stalin's rise, and particularly on their thoughts on the role of ideas versus machine politics in Stalin's victory.

So let me take a few minutes to discuss the different ways this question has been answered by historians since the events themselves.

From the early 1930s friends of the Stalin regime insisted that their leader won because he stuck most closely to Lenin's ideas, and because his opponents drifted away from leninism towards counter-revolution. They insisted that policy debate and ideas were the key to the struggle.

The losers in the struggle insisted that ideas didn't matter because Stalin was party general's secretary. The general secretary had the power to appoint all top party officials. Ideas didn't matter because Stalin had stacked the party with officials personally loyal to him, people who would support him regardless of the policy options. They insisted that Stalin's control of the party machine was what mattered in the struggle.

Whereas Henri Barbusse represents the first group, Leon Trotsky perhaps best represents the second. That is, whereas on Henri Barbusse represents the friends of Stalin, Leon Trotsky his opponents.

So from the 1930s until the late 1960s the consensus among historians roughly aligned with Trotsky's view; that is, Stalin's control of the party machine played the decisive role in the power struggle. Among those historians putting forward this view are for example: Isaac Deutscher, Merle Fainsod, Leonard Schapiro, Robert Daniels...

But in the late 1960s when cold war tensions were relaxing, the Soviet Union had reformed substantially since Khrushchev came to power, and the younger generation in the western democracies was going through a period of rebellious idealism, such that the role of ideas in Soviet politics was once again taken more seriously. Stalin's control over the party machine still mattered to historians, but it was thought that the fact that Stalin appointed top officials didn't itself guarantee total loyalty. So to quote Robert Tucker in his book ''Stalin a political biography'' (1973):<blockquote>"a would-be party chief had to develop a politically persuasive program and to be convincing in his way of presenting it in higher party circles"</blockquote>In the 1970s and 80s social historians added a new twist to the story. They observed how social conditions, popular culture, and the culture of the bolshevik party favored Stalin's victory: Russian backwardness, low levels of literacy and the weight of Russian autocratic tradition meant that most of Russians were tolerant of Stalin's heavy-handed ways. Meanwhile the bolshevik party which had grown from a 20 000 strong underground to a 1.2 million member super bureaucracy was now much less educated on average and had a much weaker understanding of marxism-leninism. Stalin's simple formulations of leninism appealed to them. His presentation of his opponents as splitters and party debate as a dangerous luxury hit accord with the party rank and file.

Since the 1980s almost nothing has been written on the subject, such that the current consensus is that all these factors: policy debate and ideas, control of the political machine, political culture... all of these played a role in Stalin's rise to power.

An answer to the question of whether Stalin's strengths or his opponent's weaknesses better explain Stalin's victory demands that all of them be given some consideration, so let's look at each in turn, starting with Stalin's role as general secretary of the party.

== Factor 1: Stalin's role as general secretary of the party ==
If the party general secretary was such an important job, so important to the struggle for power... why did Stalin's opponents let him take it without any resistance? The short answer is because it was a job no one wanted.

Stalin took over responsibility for the appointment of senior party officials at a time when the party bureaucracy was expanding faster than it had ever done or ever would. Appointing the right people to the right jobs was extremely important and before Stalin took over, the secretariat had not been coping with its task. It's worth observing here that Lenin offered the job of general secretary to Stalin and no one else because Stalin was the most able administrator in the party.

Do not fall for Trotsky's characterization of Stalin as a mediocrity. He had been a member of Lenin's inner circle for years and not for nothing. No one else wanted the job because they saw it as a dreadful bureaucratic burden.

But did they not see that the job was an opportunity to promote friends and followers. You need to think about that. In the late 1940s the historian Isaac Deutscher argued that Stalin "pack political offices with friends henchmen and followers". In the 1950s and 1960s Robert Daniels suggested a more subtle version of this: that there existed what he called a "circular flow of power" in which Stalin offered officials security of tenure if they supported him at major party meetings.

But as I mentioned, by the 1970s and 80s historians began to doubt that the fact of appointment by the secretariat was enough to guarantee political loyalty. Research in the archives of the party secretariat has finally established that the idea that Stalin controlled the party apparatus by appointing his followers is largely a myth spread by Stalin's opponents. In fact, through the 1920s the secretary was appointing thousands of officials every year. Stalin did not and could not know in detail personally or politically who was being appointed. What's more, there isn't the scrap of evidence that Stalin tried to use his role as general secretary to remove those who sympathized with his opponents.

But you should be careful here. I don't mean to suggest that the secretary had played no role in his rise to power, indeed it played an important role. But one that didn't involve any control over party officials. The secretary provided Stalin not with control but rather with information. In the course of its work the secretariat received a steady stream of reports from party institutions all over the country. Consequently, Stalin knew the preferences, wants and fears of senior party officials better than any of his opponents. He was in a better position than his opponents to gain their support by catering to those wants and fears.

You can see then, that historians views of the secretariat have changed radically since the 1950s. In the 1950s historians thought that Stalin controlled senior party officials, in the 1970s and 80s historians had a hunch that Stalin could not rely on the loyalty of senior officials; and this has been confirmed by the recent research, but in a way that suggests a very different role for the secretariat and Stalin's rise, one that makes the role of ideas and policy debate seem ever more important.

== Factor 2: Policy debates of the 1920s ==
So let's talk about that debate for a minute. In preparing for your A levels you should have a sense of the broad differences of opinion among the contenders for power, and who was in the politburo majority when... but it becomes kind of tedious and unnecessary if you go into too much detail, so I'll keep my review very simple

(part 2)

The single most important issue in the policy debate was NEP and how best to build a socialist society.

In the first phase of the succession struggle Trotsky was the first to argue that the mixed economy of NEP was leading to capitalism and not to socialism. He proposed accelerating the growth of socialist industry by increasing the taxes on the capitalist peasantry. He and his followers, notably Yevgeni Preobrazhensky, refer to this as “primitive socialist accumulation”.

That much is straightforward but you must keep two things in mind: first, all the contenders for power twisted and caricatured their opponent's ideas if it gave them an advantage; second, policy positions were dynamic, changing, logically, as circumstances changed, so did the views of politicians.

Now, Stalin's program which is referred to as “socialism in one country” was intended as a dig on Trotsky who had argued after the revolution that to build a socialist society in Russia there would need to be revolution abroad, that is, that Russia would need assistance from abroad.

Now, Trotsky no longer pressed this idea after it had become clear that there was no prospect of revolution in Europe... but Stalin did not let him forget his earlier words, because it made him look like a defeatist.

Meanwhile, Stalin also responded to Trotsky's idea of “primitive socialist accumulation” with a defense of NEP and a warning that increasing taxes on the peasantry would put the very real successes of the NEP economy at risk. It seemed a sensible position in the early 1920s when NEP was generating double-digit growth.

By 1925, Trotsky had been isolated. Was that because of the inferiority of his ideas? Probably not. The reason for Trotsky's isolation were more personal than political or ideological. The fact of the matter is: nobody in the politbureau liked him. He was arrogant, he was not a team player. The members of the politbureau couldn't imagine running the country under his leadership. That, rather than his policies was Trotsky's main weakness.

Meanwhile, things in the rest of the politburo were not especially happy:

* Nikolai Bukharin had become perhaps an over-enthusiastic supporter of NEP, and a reliance on its capitalist elements, that is, the well-to-do peasant (the kulak) and the petty trader (the nepman).
* Zinoviev and Kamenev did not share Bukharin’s willingness to embrace NEP capitalism. They also worried that Stalin was accumulating too much personal power. And the combination of the personal and political encouraged them to break with the politburo majority and joined their old enemy Trotsky and form the United Opposition. Together they attacked NEP; and together, the majority, defended NEP thought not exactly in the same terms.

NEP was still generating substantial rates of growth... though everyone knew that substantial new investment in industry would be necessary for those rates of growth to remain high.

* Stalin emphasized the importance of central planning and measures to improve industrial efficiency in generating new investment.
* Bukharin acknowledged these but insisted that capitalist elements would have to continue to play an important role in the economy.

Now many historians have argued that Stalin used the policies of the right to defeat the left; and then, adopted the policies of the left to defeat the right. That Stalin in this sense was an unprincipled political opportunist.

These historians fail to see that by the mid-1920s, as the prospective of the first five-year plan came to be seen as providing solutions to the problems of NEP, the whole of the party elite was moving to the left. Stalin and the politburo majority defeated the United Opposition because in 1927 there was little to separate the promise of their economic policies. Why risk a change when the majority was achieving good results? Again, Stalin was able to present his opponents as splitters, as pointlessly challenging central policy.

The last phase of the policy debate was between Stalin and Bukharin both of whom continued to drift to the left. Stalin shared with the politburo majority a growing enthusiasm about the potential of the five-year plan. Bukharin was willing to accept that more would have to be done to contain capitalist elements, but he thought that Stalin was going too far, that Stalin's harsh measures against wealthy peasants in 1928 and after were dangerous. He also publicly worried that enthusiasm for the plan was going too far, that plans were not realistic, “you cannot -to use his words- build today's factories with tomorrow's bricks”. Bukharin’s worries were well placed, the plans were unrealistic, the confrontation with the peasantry proved devastating, but he predicted a crisis that didn't come until the early 1930s, and while he issued warnings of doom output figures continued to rise beyond expectations. Yet again, Stalin could present his opponents as blind to the correctness of central policy, as unnecessary ballast best cast overboard, in short, again, as splitters. In 1929 Bukharin and his followers were cast aside, and from that point Stalin's rule never again faced a serious challenge.

== Factor 3: The political culture ==
Now that takes us to our next factor, that is the political culture of the bolshevik party... of Bolshevism.

Remember that in the 1950s and 1960s historians only really ever looked at high politics. If Stalin controlled the party machine, as they believed through the secretariat, then there was no point in looking anywhere else. But when in the 1970s and 80s historians started to take policy debates seriously, then suddenly it mattered who those policies were being presented to. Was it to the millions strong party rank-and-file? Was it being presented to the several thousand top party officials?

Twenty years after the revolution, at a small get-together in the Kremlin after the red square parade, Stalin reminisced about the power struggle to his close associates in the politburo. There he stressed the importance of his overwhelming popularity among the broad party rank-and-file. He was almost certainly right about this. The rank-and-file were for the most part barely literate, and knew little of marxism-leninism, they were the most comfortable with the authoritarian traditions of czarism, and the least likely to understand the complexities of the policy debates, they were likely to be the most happy for those policy debates to come to an end, they appreciated Stalin's efforts to explain leninism in very simple terms, and were drawn to his self-presentation as Lenin’s one true disciple. It is not difficult to see how Stalin could rely on their support.

But what's more striking about Stalin's reminiscences, is that his praise for the rank-and-file implies a criticism of… a lack of trust, in senior officialdom. This group had higher levels of education, they understood the terms of the policy debates, they did not need Stalin's simplifications of leninism, they knew that Trotsky and Bukharin were more sophisticated thinkers than Stalin. Now this didn't mean that they naturally opposed Stalin. Stalin had always presented himself as representing the middle ground, as leader of the majority: he moved to the left as they moved to the left... and his policies were generally successful: the economy continued to grow rapidly through the 1920s despite predictions to the contrary from his opponents (from the left and from the right). Stalin seemed to be a safe pair of hands. He carried the support of the party elite too, but he was aware that their support was conditional, less certain, more measured. The support of the party elite was most important to the leadership struggle because they, or at least the top 175 or 200 officials represented within the party central committee, they were empowered by party rules to elect the politburo, they had it in their power to remove Stalin... but they did not, they supported Stalin. But Stalin knew it was a close-run thing. The great terror of 1936-38 was in no small part driven by Stalin's fear that he could not rely on their loyalty.

== Summary ==
So by way of a summary let's return to the question: Do Stalin's strengths or his opponent's weaknesses better explain his victory? In short, Stalin's strengths mattered more. What were they?

# his position as general secretary of the party,
# his ability to hold the majority of the politburo,
# his ceaseless attention to the details of factional politics,
# the success of his policies and
# his popularity among the rank-and-file of the party.

And briefly on his opponent's weaknesses

# Trotsky was unpopular and distrusted within the politburo,
# neither he nor Zinoviev and Kamenev within the United Opposition... none of them removed Stalin when they had the chance,
# Trotsky didn't play the game of factional politics, he lost opportunities,
# Bukharin's ideas later in the 1920s were out of tune with a party drifting to the left.

Julio Antonio Mella

2026-02-13T03:02:08Z

Ismael: There is no disagreement among historians on who ordered Mella's assassination.

{{Message box/Stub}}{{Infobox revolutionary|name=Julio Antonio Mella|birth_name=Nicanor McPartland|birth_date=26 March 1903|birth_place=[[Havana]], [[Cuba]]|death_date=10 January 1929 (aged 25)|death_place=[[Mexico City]], [[Mexico]]|political_orientation=[[Marxism]]|political_party=[[Popular Socialist Party (Cuba)|Cuban Communist Party]] (Original; not the [[Communist Party of Cuba|current party]])|image=JulioAntonioMella.jpg}}'''Julio Antonio Mella''' (born '''Nicanor McPartland'''; 26 March 1903 — 10 January 1929) was a [[Republic of Cuba|Cuban]] revolutionary who co-founded the original [[Popular Socialist Party (Cuba)|Cuban Communist Party]] in 1925. He is celebrated by the current Cuban government, who considers him a martyr for the [[Communism|communist]] cause.

Mella was assassinated while exiled in Mexico in 1929 by order of Cuban [[corporatist]] dictator [[Gerardo Machado]].
[[Category:1903 births]]
[[Category:1929 deaths]]
[[Category:Cuban communists]]
[[Category:Cuban revolutionaries]]
[[Category:Popular Socialist Party (Cuba) politicians]]

2022 Russo-Ukrainian conflict

2025-04-29T19:10:39Z

Ismael: About DPRK soldiers in Kursk

{{Message box/currentevent}}{{Infobox military conflict|combatant1={{icon|Flag of Russia.svg}} [[Russian Federation]] {{icon|Flag of DPR.jpg}} [[Donetsk People's Republic]] (February–September 2022) {{icon|Flag of LPR.svg}} [[Luhansk People's Republic]] (February–September 2022) '''Supported by:''' {{icon|Flag of Belarus.png}} [[Republic of Belarus]] {{icon|Flag of the DPRK.svg}} [[Democratic People's Republic of Korea]] (accused)|conflict=Russian Special Military Operation|combatant2={{icon|Flag of Ukraine.svg}} [[Ukraine]] {{icon|Flag of al-Qaeda.svg}} [[Al-Qaeda]]<ref name=":02">{{News citation|date=2022-03-08|title=450 Arab and foreign extremists from Idlib arrive in Ukraine|url=https://english.almayadeen.net/news/politics/450-arab-and-foreign-extremists-from-idlib-arrive-in-ukraine}}</ref> {{icon|TIP flag.png}}[[Turkistan Islamic Party]]<ref name=":02"></ref> '''Supported by:''' {{icon|Flag of NATO.png}} [[North Atlantic Treaty Organization]]|date=24 February 2022 – ''present''|place=[[Ukraine]] and the [[Donbass]] region|units1=Pro-Russian separatist forces [[Russian Armed Forces]]|units2=[[Armed Forces of Ukraine]] [[National Guard of Ukraine]] Irregular forces Foreign mercenaries|result=''Ongoing''|image=Special Military Operation Image.jpg}}

The '''2022 Russo-Ukrainian conflict''' is an{{#ifexist:Template:{{CURRENTMONTH}}{{CURRENTDAY2}}/{{PAGENAME}}|{{Template:{{CURRENTMONTH}}{{CURRENTDAY2}}/{{PAGENAME}}}}}} ongoing conflict between [[NATO]] and the [[Russian Federation]] taking place in [[Ukraine]], backed by the imperialist [[United States of America|United States]]. The conflict began with Russian military operations in 24 February 2022 with an incursion on Ukrainian-administered territory.<ref name=":4">{{News citation|date=2022-02-24|title=Russia invades Ukraine: Political, military leaders' reactions|url=https://www.reuters.com/markets/europe/leaders-key-quotes-after-russia-invades-ukraine-2022-02-24/|newspaper=Reuters|retrieved=2022-03-10}}</ref> The imperialist US and [[European Union|EU]] camp is sacrificing Ukraine to 'weaken Russia' according to a former NATO advisor.<ref name=":5">{{News citation|author=[[Aaron Mate]]|newspaper=[[The Grayzone]]|title=US, EU sacrificing Ukraine to ‘weaken Russia’: fmr. NATO adviser|date=2022-04-15|url=https://thegrayzone.com/2022/04/15/us-eu-sacrificing-ukraine-to-weaken-russia-fmr-nato-adviser/}}</ref>

In 2014, the US installed a pro-Western government through the [[2014 Ukrainian coup d'etat|Euromaidan coup]],<ref name=":6">{{News citation|title=How and Why the US Government Perpetrated the 2014 Coup in Ukraine|url=https://www.strategic-culture.org/news/2018/06/03/how-why-us-government-perpetrated-2014-coup-ukraine/}}</ref> which resulted in the rise of [[neo-Nazism]] in Ukraine<ref>{{News citation|title=Commentary: Ukraine’s neo-Nazi problem|date=2018-03-19|url=https://www.reuters.com/article/us-cohen-ukraine-commentary-idUSKBN1GV2TY}}</ref><ref>{{News citation|title=Ukrainian Jewish Committee: Our government encourages the glorification of Nazi collaborators|date=2022-03-14|url=https://www.youtube.com/watch?v=6wU2wOLvWik|archive-url=https://web.archive.org/web/20220323123229/https://www.youtube.com/watch?v=6wU2wOLvWik|archive-date=2022-03-23|quote=Our government encourages glorification of Nazi collaborators, mass-murderers, and murderers of Jews. Literally, there are hundreds of monuments, streets, named after killers of Jews. [...] We have anti-Semitic incidents every day. There is vandalism of mass graves - Holocaust mass graves. Vandalism on Jewish monuments. Sholem Aleichem latest - was vandalised with swastikas in Kiev, central Kiev.}}</ref> and saw pro-NATO [[Petro Poroshenko]] elected as President.<ref>{{Web citation|newspaper=The Guardian|title=Petro Poroshenko wins Ukraine presidency, according to exit polls|date=2014-05-25|url=https://www.theguardian.com/world/2014/may/25/petro-poroshenko-ukraine-president-wins-election}}</ref> The most prominent neo-Nazi group in Ukraine is the [[Azov Battalion]], a former paramilitary group that terrorised the [[Donbass]] since 2014 and was officially incorporated into the Armed Forces of Ukraine during the conflict. This far-right pro-[[Imperial core|West]] government maintained hostilities towards ethnic Russians in the Donbass region of Ukraine.<ref>{{News citation|date=2022-02-17|title=Ethnic Russians in eastern Ukraine say attacked by govt. forces|url=https://parstoday.com/en/news/world-i166324-ethnic_russians_in_eastern_ukraine_say_attacked_by_govt._forces}}</ref> These hostilities led to separatist movements establishing the [[Luhansk People's Republic]] and the [[Donetsk People's Republic]] in their corresponding [[Oblast|oblasts]], which were annexed into the Russian Federation as of 30 September 2022.

==Background==

=== NATO expansion ===
[[File:NATO expansion.png|thumb|NATO expansion towards Russia's borders since 1990]]
In 1990, in a meeting between [[United States of America|United States]] secretary of state [[James Baker]] and [[Mikhail Gorbachev]], the US official guaranteed that "not an inch of NATO’s present military jurisdiction will spread in an eastern direction."<ref>{{News citation|journalist=Svetlana Savranskaya & Tom Blanton|date=2017-12-12|title=NATO expansion: what Gorbachev heard|url=https://nsarchive.gwu.edu/briefing-book/russia-programs/2017-12-12/nato-expansion-what-gorbachev-heard-western-leaders-early|newspaper=National Security Archive}}</ref><ref>{{Citation|author=[[James Baker]], [[Mikhail Gorbachev|Mikhail Gorbachyov]]|year=1990|title=Memorandum of conversation between Mikhail Gorbachev and James Baker in Moscow|title-url=https://nsarchive.gwu.edu/document/16116-document-05-memorandum-conversation-between|page=6|quote=Baker: We understand the need for assurances to the countries in the East. If we maintain a presence in Germany that is part of NATO, there would be no extension of NATO's jurisdiction for forces of NATO one inch to the east.|pdf=https://nsarchive.gwu.edu/sites/default/files/documents/4325679/Document-05-Memorandum-of-conversation-between.pdf|publisher=National Security Archive}}</ref>

=== Orange Color Revolution ===
{{Main article|Orange Revolution}}

=== Euromaidan coup and Donbass War ===
[[File:Euromaidan building.png|thumb|Odessa trade union building burned in the 2014 coup.]]
While Russia was distracted with the Sochi Olympics, the US supported the [[2014 Ukrainian coup d'etat|Maidan coup]] which overthrew recently re-elected anti-NATO president [[Viktor Yanukovych]] and replaced him with a [[Far-right politics|far-right]], pro-[[Imperial core|Western]] government. In response to this coup and with rising tensions from the anti-Russian government, Crimeans (the majority of which were, for historical reasons, ethnic Russians) voted overwhelmingly in favor of seceding from Ukraine and joining into the Russian Federation.<ref>{{News citation|title=Crimeans vote overwhelmingly to secede from Ukraine, join Russia|url=https://www.cbsnews.com/news/crimeans-vote-overwhelmingly-to-secede-from-ukraine-join-russia/}}</ref>

[[Donetsk People's Republic (2014–2022)|Donetsk]] and [[Luhansk People's Republic|Luhansk]] also declared independence in their respective oblasts and formed the Donetsk People's Republic and Luhansk People's Republic. These breakaway republics, mostly composed of civilians, were then forced into civil war with the Ukrainian army and para-military neo-Nazi outfits such as the Azov battalion who uses their vast arsenal to shell and invade the oblasts.

==== Minsk Accords ====
In 2014, Belarus negotiated the first Minsk agreement, which Russia, Ukraine, and the [[OSCE]] signed. [[Federal Republic of Germany|Germany]] and [[French Republic|France]] oversaw the negotiations. After the first deal quickly failed, they created a second Minsk agreement in 2015. Minsk II required Ukraine to adopt a new constitution by late 2015 that would decentralize power and give autonomy to Donetsk and Luhansk.

Ukrainian president Petro Poroshenko refused to implement the accords. [[Volodymyr Zelenskyy|Zelenskyy]] promised to restart peace negotiations during his 2019 presidential campaign but reversed his decision after becoming president.<ref name=":3">{{Web citation|author=[[Ben Norton]]|newspaper=[[Geopolitical Economy Report]]|title=Ukraine’s Zelensky admits he sabotaged Minsk peace deal with Russia, West blocked negotiations|date=2023-02-10|url=https://geopoliticaleconomy.com/2023/02/10/ukraine-zelensky-minsk-peace-russia/|archive-url=https://web.archive.org/web/20230925173916/https://geopoliticaleconomy.com/2023/02/10/ukraine-zelensky-minsk-peace-russia/|archive-date=2023-09-25}}</ref>

=== 2021 crisis ===
Tensions rose sharply in 2021, when the Brussels summit of the North Atlantic Treaty Organization reiterated that Ukraine would become aligned with NATO,<ref>{{News citation|date=2021-04-14|title=Brussels Summit Communiqué|url=https://www.nato.int/cps/en/natohq/news_185000.htm|newspaper=NATO|quote=We reiterate the decision made at the 2008 Bucharest Summit that Ukraine will become a member of the Alliance with the Membership Action Plan (MAP) as an integral part of the process; we reaffirm all elements of that decision, as well as subsequent decisions, including that each partner will be judged on its own merits.}}</ref> sparking outrage from Russian officials who considered the expansion of NATO a threat of their national security.<ref>{{News citation|date=2022-01-16|title=NATO expansion one of main threats to Russia’s national security - ambassador|url=https://tass.com/russia/1388653|newspaper=Russian News Agency TASS|retrieved=2022-01-24|quote="After the collapse of the USSR, the security situation in Europe deteriorated sharply. Five ‘waves’ of NATO expansion have brought the Alliance States forces closer to our borders," [the Russian ambassador to the United States Anatoly Antonov] stated. "NATO is constantly building up its offensive potential, demonstrating military force along the perimeter of the Russian territory. [...]}}</ref> Russia began to build up troops closer to their borders, demanding that NATO stop its expansion towards Russia.<ref>{{News citation|date=2022-02-18|title=West promised not to expand NATO|url=https://www.rt.com/news/549921-nato-expansion-russia-document/|newspaper=[[RT (TV Network)|RT]]}}</ref>

In December 2021, Russia published two drafted peace treaties, which the West rejected. Russia demanded security guarantees that NATO would not carry out activities on its borders.<ref name=":3" />

== Course of the war ==

=== First phase (February - April 2022) ===
The 2022 conflict began with Russian forces rapidly advancing across Ukraine from the [[Republic of Belarus|Belarusian]] border, [[Crimea]], and the Donbass, seizing over a fifth of Ukrainian territory,<ref>{{Web citation|newspaper=TeleSUR|title=Russia Controls About 20% of Ukrainian Territory: Zelensky|date=2022-06-02|url=https://www.telesurenglish.net/news/Russia-Controls-About-20-of-Ukrainian-Territory-Zelensky-20220602-0007.html|archive-url=https://archive.ph/WsynE|archive-date=2023-09-14|retrieved=2023-09-14}}</ref> including the city of [[Kherson]].<ref>{{Web citation|newspaper=Reuters|title=Russia says it captures Ukrainian city of Kherson -RIA|date=2022-03-02|url=https://www.reuters.com/world/europe/russia-says-it-captures-ukrainian-city-kherson-ria-2022-03-02/|archive-url=https://archive.ph/HE7xF|archive-date=2022-03-02|retrieved=2023-09-14}}</ref> On March 7, Mikhail and Aleksander Kononovich, members of the [[Leninist Communist Youth Union of Ukraine|Komsomol of Ukraine]], were arrested by Ukrainian authorities and imprisoned in [[Kiev]].<ref>{{News citation|newspaper=In Defense of Communism|title=Ukraine: Communist Youth Union members beaten badly, remain detained in Kiev|date=2022-03-13|url=http://www.idcommunism.com/2022/03/ukraine-communist-youth-union-members-beaten-badly-remain-detained-in-kiev.html|archive-url=https://web.archive.org/web/20220313015316/http://www.idcommunism.com/2022/03/ukraine-communist-youth-union-members-beaten-badly-remain-detained-in-kiev.html|archive-date=2022-03-13|retrieved=2022-03-20}}</ref>

=== Second phase (April - September 2022) ===
Russian forces retreated from northern Ukraine in April 2022.<ref>{{YouTube citation|url=https://www.youtube.com/watch?v=F_jQQw0TNiw|channel=The New Atlas|title=Russian Operations in Ukraine: Week 6 Update|date=2022-04-04}}</ref> The war then transitioned into attrition, with relatively slow Russian advances taking the cities of [[Mariupol]]<ref>{{Web citation|newspaper=TeleSUR|title=Peaceful Life Returning to Mariupol — City Head|date=2022-05-21|url=https://www.telesurenglish.net/news/Peaceful-Life-Returning-to-Mariupol--City-Head-20220521-0008.html|archive-url=https://archive.ph/x18fI|archive-date=2023-09-14|retrieved=2023-09-14}}</ref> and [[Severodonetsk]]<ref>{{Web citation|newspaper=TeleSUR|title=Russia Confirms Full Control of Severodonetsk City|date=2022-06-25|url=https://www.telesurenglish.net/news/Russia-Confirms-Full-Control-of-Severodonetsk-City-20220625-0006.html|archive-url=https://archive.ph/RQHsT|archive-date=2023-09-14|retrieved=2023-09-14}}</ref> in the spring and summer.

=== Third phase (September - November 2022) ===
In September 2022, Ukraine launched its first successful counteroffensive which retook all of Russian-occupied [[Kharkov]] oblast and a section of Luhansk oblast.<ref>{{YouTube citation|url=https://www.youtube.com/watch?v=IEoXDjwqePY|channel=The New Atlas|title=Escalate or Grind On? Russian Ops in Ukraine Update for September 14, 2022|date=2022-09-14}}</ref> Russian forces west of the Dnieper River in Kherson oblast retreated in November 2022.<ref>{{YouTube citation|url=https://www.youtube.com/watch?v=O_DeH3-H4SQ|channel=The New Atlas|title=Russian Kherson Withdrawal: Trap? Or Necessary Chess Move?|date=2022-10-09}}</ref>

=== Fourth phase (November 2022 - May 2024) ===
The winter of 2022 and spring of 2023 saw few territorial changes, as Russia and Ukraine fought a grinding battle of attrition over the city of [[Bakhmut]] in Donetsk oblast,<ref>{{Web citation|newspaper=CGTN|title=Why Russia and Ukraine have fought for five months over Bakhmut|date=2022-12-22|url=https://newseu.cgtn.com/news/2022-12-22/Why-Russia-and-Ukraine-have-fought-for-five-months-over-Bakhmut-1fVC6G1QeKQ/index.html|archive-url=https://archive.ph/8t6fE|archive-date=2023-09-14|retrieved=2023-09-14}}</ref> and Russia constructed substantial defenses in [[Zaporozhye]] oblast during this time in preparation for a Ukrainian attempt to reach Crimea.<ref>{{Web citation|author=Gerry Doyle, Vijdan Mohammad Kawoosa and Adolfo Arranz|newspaper=Reuters|title=Digging in: How Russia has heavily fortified swathes of Ukraine – a development that could complicate a spring counteroffensive.|date=2023-04-24|url=https://www.reuters.com/graphics/UKRAINE-CRISIS/COUNTEROFFENSIVE/mopakddwbpa/|archive-url=https://archive.ph/p9RYS|archive-date=2023-05-01|retrieved=2023-09-14}}</ref> Russia had consolidated control over Bakhmut by the end of May 2023.<ref>{{Web citation|newspaper=CGTN|title=Russia claims 'full' control of Bakhmut while Ukraine says situation 'critical'|date=2023-05-21|url=https://news.cgtn.com/news/2023-05-21/Russia-claims-control-of-Bakhmut-Ukraine-says-situation-critical--1jZiuPuoaaI/index.html|archive-url=https://archive.ph/crjDm|archive-date=2023-09-14|retrieved=2023-09-14}}</ref> At the beginning of June 2023, Ukraine launched its long-awaited counteroffensive against Russian forces in Zaporozhye.<ref>{{Web citation|author=Guy Faulconbridge|newspaper=Reuters|title=Russia says it thwarted major Ukrainian offensive, Kyiv says Moscow spreads lies|date=2023-06-05|url=https://www.reuters.com/world/europe/russia-says-its-forces-thwarted-major-ukrainian-offensive-2023-06-04/|archive-url=https://archive.ph/JwdAP|archive-date=2023-06-05|retrieved=2023-09-14}}</ref> As of September 2023, three months after the Ukrainian counteroffensive began, Ukraine has failed to make substantial progress against Russian defences.<ref>{{Web citation|newspaper=CGTN|title=Ukraine tells counter-offensive critics to 'shut up', Russia 'sinking ships' to block Crimea bridge attacks|date=2023-09-01|url=https://newseu.cgtn.com/news/2023-09-01/Ukraine-tells-critics-of-counter-offensive-to-shut-up--1mKf7W4dZio/index.html|archive-url=https://archive.ph/YfuSx|archive-date=2023-09-14|retrieved=2023-09-14}}</ref><ref>{{Web citation|newspaper=TeleSUR|title=Ukraine Has Lost 71,500 Soldiers in Counteroffensive: Putin|date=2023-09-12|url=https://www.telesurenglish.net/news/Ukraine-Has-Lost-71500-Soldiers-in-Counteroffensive-Putin-20230912-0010.html|archive-url=https://archive.ph/hLk1m|archive-date=2023-09-14|retrieved=2023-09-14}}</ref><ref>{{Web citation|author=Lou Robinson, Sophie Tanno, Tim Lister and Byron Manley|newspaper=CNN|title=Seeking a breakthrough: A visual guide to Ukraine’s counteroffensive|date=2023-09-08|url=https://edition.cnn.com/interactive/2023/09/world/ukraine-war-counteroffensive-maps-guide-dg/|archive-url=https://archive.ph/WRiA6|archive-date=2023-09-08|retrieved=2023-09-14}}</ref>

=== Fifth phase (May - August 2024) ===
On 10 May 2024, Russian forces launched a second offensive towards the Ukrainian-controlled Kharkov oblast.<ref>{{Web citation|url=https://war.telegraf.com.ua/war-in-ukraine/2024-05-10/5851171-prognozovani-dii-v-rnbo-prokomentuvali-mozhlive-zagostrennya-na-kharkivshchini|title=В СНБО прокомментировали ситуацию на Харьковщине и оценили угрозу для областного центра|date=May 10, 2024|website=Телеграф|access-date=2024-05-10|archive-date=2024-05-16|archive-url=https://web.archive.org/web/20240516143901/https://war.telegraf.com.ua/war-in-ukraine/2024-05-10/5851171-prognozovani-dii-v-rnbo-prokomentuvali-mozhlive-zagostrennya-na-kharkivshchini|url-status=live}}</ref> Over 30,00 Russian soldiers are in the front.<ref name="KI30k">{{Web citation|title=Security council secretary: Over 30,000 Russian troops involved in attack on Kharkiv Oblast|url=https://kyivindependent.com/security-council-secretary-over-30-000-russian-troops-attack-kharkiv-oblast/|access-date=14 May 2024|website=[[Kyiv Independent]]|archive-date=14 May 2024|archive-url=https://web.archive.org/web/20240514064626/https://kyivindependent.com/security-council-secretary-over-30-000-russian-troops-attack-kharkiv-oblast/|url-status=live}}</ref>

=== Sixth phase (August 2024 - present) ===
On 6 August 2024, Ukraine invaded Russia after launching an incursion in Kursk oblast.<ref>{{Web citation|last=Miller|first=Christopher|date=6 August 2024|title=Moscow claims Ukraine has launched offensive inside Russia|url=https://www.ft.com/content/83ad1e07-19d6-4ae0-b10e-208926fec4eb|url-access=subscription|url-status=live|archive-url=https://archive.today/20240807131254/https://www.ft.com/content/c716482f-c032-4993-aa12-985a4828ff9d|archive-date=7 August 2024|access-date=6 August 2024|website=[[Financial Times]]|language=en}}</ref> In solidarity with [[Russian Federation|Russia]], the [[Democratic People's Republic of Korea|DPRK]] sent combat units to repel the Ukrainian incursion into Russian territory.<ref>https://vkpb.ru/index.php/kndr/item/3623-tsvk-tpk-vysoko-otsenil-boevye-podrazdeleniya-vooruzhennykh-sil-kndr-sovershivshie-geroicheskie-podvigi-v-operatsii-po-osvobozhdeniyu-rajonov-kurskoj-oblasti-rf</ref>

== Humanitarian aid ==
During diplomatic talks, Ukraine and Russia have agreed upon humanitarian corridors to allow displaced persons to flee war zones safely.<ref>{{News citation|newspaper=Reuters|title=Ukraine says talks with Russia agreed on humanitarian corridors|url=https://www.reuters.com/world/europe/ukraine-says-talks-with-russia-agreed-humanitarian-corridors-2022-03-03/}}</ref>

== Foreign involvement ==
[[Al-Qaeda|Al Qaeda]], Hyatt Tahrir al-Sham, and other islamist jihadist groups are joining alongside Ukrainian neo-Nazis to fight against the Russians, similarly to their original task in [[Operation Cyclone]].<ref name=":02">{{News citation|date=2022-03-08|title=450 Arab and foreign extremists from Idlib arrive in Ukraine|url=https://english.almayadeen.net/news/politics/450-arab-and-foreign-extremists-from-idlib-arrive-in-ukraine}}</ref><ref>{{News citation|title=Al Qaeda Fighters Join Ukraine|date=2022-03-13|url=https://youtu.be/BJFHxsS23Sw}}</ref>

Germany violated its recent pattern of neutrality by sending weapons to Ukraine.<ref>{{News citation|journalist=[[Richard Medhurst]]|date=2022-03-02|title=Germany Sends Weapons to Ukraine, Breaks with Neutrality|url=https://www.rokfin.com/post/76665?utm_medium=Email&utm_source=Campaign&utm_campaign=New+Post+Email|newspaper=[[Rokfin]]}}</ref>

== Casualties ==
According to the Russian Defense Ministry, Ukraine has lost 23 thousand soldiers during the conflict;<ref>{{News citation|newspaper=RUSSIAN NEWS AGENCY|title=Russian Defense Ministry to publish data on military deaths from Ukrainian documents|date=2022-4-16|url=https://tass.com/defense/1438729?utm_source=en.wikipedia.org&utm_medium=referral&utm_campaign=en.wikipedia.org&utm_referrer=en.wikipedia.org}}</ref> however, the Ukrainian government claims merely 10 thousand of its solders have been lost during the conflict.<ref>{{News citation|author=Claire Heald|newspaper=BBC|title=10,000 Ukrainian soldiers killed, Kyiv says|date=2022-6-11|url=https://www.bbc.com/news/live/world-europe-61764008?ns_mchannel=social&ns_source=twitter&ns_campaign=bbc_live&ns_linkname=62a45eb8a48d0547a34bfcc2%2610%2C000%20Ukrainian%20soldiers%20killed%2C%20Kyiv%20says%262022-06-11T11%3A28%3A41.032Z&ns_fee=0&pinned_post_locator=urn:asset:a87e683d-139b-43c4-9e75-e63f285d618c&pinned_post_asset_id=62a45eb8a48d0547a34bfcc2&pinned_post_type=share}}</ref>

Since the beginning of the conflict, at least 61,207 Ukrainian troops were killed and 49,368 wounded up to 21 September 2022 according to the Russian Ministry of Defense. The number of Russian troops killed amount to 5,397.<ref>{{Web citation|newspaper=RT|title=Russia reveals military losses in Ukraine|date=2022-09-21|url=https://www.rt.com/russia/563213-ukraine-donbass-military-losses/|retrieved=2022-09-22|quote="Initially, the Armed Forces of Ukraine amounted to between 201,000 and 202,000 people, and since then they have suffered losses of around 100,000, with 61,207 killed and 49,368 others wounded," [Minister of Defense Sergei Shoigu] said.}}</ref> In addition, over 7 million refugees have fled Ukraine. Of these, over 2.8 million have fled to Russia, which has taken in more refugees than any other country.<ref>{{Web citation|newspaper=UN Refugee Agency|title=Ukraine Refugee Situation|date=2022-11-17|url=https://data.unhcr.org/en/situations/ukraine|archive-url=https://web.archive.org/web/20221116022311/https://data.unhcr.org/en/situations/ukraine|archive-date=2022-11-17|retrieved=2022-11-17}}</ref>

== Attempted peace deals ==
After negotiating in Istanbul on 29 March 2022, Russia and Ukraine agreed to a negotiated settlement that would have Russia withdraw to its position from 23 February, when it controlled [[Crimea]] and the Donbass republics. In exchange, Ukraine would agree not to join NATO and instead receive security guarantees from other countries. British Prime Minister [[Boris Johnson]] intervened to sabotage the agreement and continue the war.<ref>{{Web citation|author=[[Ben Norton]]|newspaper=[[Geopolitical Economy Report]]|title=West killed peace proposal to end Ukraine war, Russia supported negotiated settlement|date=2022-09-23|url=https://geopoliticaleconomy.com/2022/09/03/west-peace-proposal-ukraine-russia/|archive-url=https://web.archive.org/web/20230206084946/https://geopoliticaleconomy.com/2022/09/03/west-peace-proposal-ukraine-russia/|archive-date=2023-02-06}}</ref>

== Reactions ==
[[File:UN General Assembly ES-11-1.svg|thumb|UN General Assembly resolution ES-11/1 demanding immediate Russian withdrawal from Ukraine.Green: ForYellow: Abstained

Red: Against]]
[[File:US support for Ukraine poll.png|thumb|Perceived reasons for U.S. support for Ukraine by country.]]
[[File:EU support for Ukraine.png|thumb|Perceived reasons for [[European Union|EU]] support for Ukraine by country.]]
[[File:Ukraine war poll.png|thumb|Most Westerners want to prolong the war in order for Ukraine to retake all lost territory while people from Russia and the [[Global South]] want the war to end as soon as possible.]]
[[File:Russia strength poll.png|thumb|People from [[Republic of India|India]], [[Republic of Turkey|Turkey]], and [[People's Republic of China|China]] believe the war made Russia look stronger while Westerners believe it made Russia look weaker.]]
[[File:End Ukraine wall poll.png|thumb|94% of Statesians and 88% of western Europeans (France, Germany, and UK) support a negotiated end to the war.]]

=== From the West ===
All major [[Imperialism|imperialist]] countries, including the [[United States of America|United States]], United Kingdom, [[Canada]], [[Japan]], and most [[European Union]] countries, sanctioned Russia after it began its military operations on February 24,<ref>{{News citation|journalist=Al Jazeera Staff|date=2022-03-03|title=List of sanctions against Russia after it invaded Ukraine|url=https://www.aljazeera.com/news/2022/2/25/list-of-sanctions-on-russia-after-invasion|newspaper=[[Al Jazeera]]|retrieved=2022-03-08}}</ref> and as a result, Russia became the most sanctioned economy in the world.<ref>{{News citation|journalist=Nick Wadhams|date=2022-03-07|title=Russia is now the world's most-sanctioned nation|url=https://www.bloomberg.com/news/articles/2022-03-07/russia-surges-past-iran-to-become-world-s-most-sanctioned-nation|retrieved=2022-03-09}}</ref> On March 7th, twenty Russian [[Bourgeoisie|capitalists]] were also sanctioned by Japan.<ref>{{News citation|date=2022-03-07|title=Japan sanctions 20 more Russian businessmen, officials — MFA|url=https://tass.com/world/1418497|newspaper=Russian News Agency TASS|retrieved=2022-03-10}}</ref> The Russian government compiled a list of countries who have taken hostile actions against the country.<ref>{{News citation|date=2022-03-07|title=Russian government approves list of unfriendly countries and territories|url=https://tass.com/politics/1418197|newspaper=Russian News Agency TASS}}</ref>

The [[bourgeois media]] of the [[United States of America|United States]] has been hypocritically feigning support for the citizens of Ukraine while completely disregarding the humanity of those who suffer under the USA's own wars.<ref>{{News citation|title=Hypocrisy of the West Is Unbelievable" {{!}} Richard Medhurst on Ukraine|url=https://youtu.be/lwkMBge05IA|journalist=[[Richard Medhurst]]}}</ref><ref>{{News citation|newspaper=Ron Paul Institute|title=Washington's Crocodile Tears Over Ukraine's Destruction|date=2022-02-25|url=http://ronpaulinstitute.org/archives/featured-articles/2022/february/25/washingtons-crocodile-tears-over-ukraines-destruction/|journalist=Daniel McAdams}}</ref>

79% of French people blame the USA and/or NATO for starting the war, and 46% blame Putin or Russia. In Germany, 51% of people blame the USA or NATO and 29% blame Putin or Russia. The French poll allowed people to blame both sides, but the German poll only allowed one choice.<ref>{{Web citation|author=[[Ben Norton]]|newspaper=[[Geopolitical Economy Report]]|title=USA & NATO responsible for Ukraine war, German & French public say in poll|date=2023-08-21|url=https://geopoliticaleconomy.com/2023/08/21/us-nato-responsible-ukraine-war-germany-france-poll/|archive-url=https://web.archive.org/web/20230908122732/https://geopoliticaleconomy.com/2023/08/21/us-nato-responsible-ukraine-war-germany-france-poll/|archive-date=2023-09-08}}</ref>

=== From the Global South ===
[[State of Eritrea|Eritrea]], [[Islamic Republic of Iran|Iran]], [[Republic of Nicaragua|Nicaragua]], [[Republic of South Africa|South Africa]], and [[Bolivarian Republic of Venezuela|Venezuela]] blamed NATO for the war. [[Republic of India|India]], [[Mexican United States|Mexico]], [[Islamic Republic of Pakistan|Pakistan]], and many other [[Global North and South|Global South]] countries, including over a dozen countries in [[Africa]], remained neutral. [[Mahathir Mohamad]], the former president of [[Malaysia]], said that the conflict was caused by "Europeans' love of war."<ref name=":2">{{Web citation|author=[[Ben Norton]]|newspaper=[[Geopolitical Economy Report]]|title=Many Global South countries blame US/NATO for Ukraine war, not Russia|date=2022-03-28|url=https://geopoliticaleconomy.com/2022/03/28/global-south-blame-us-nato-ukraine-war-russia/|archive-url=https://web.archive.org/web/20230306064126/https://geopoliticaleconomy.com/2022/03/28/global-south-blame-us-nato-ukraine-war-russia/|archive-date=2023-03-06|retrieved=2023-04-02}}</ref>

=== From communist movements ===

==== Ruling ====
The [[Communist Party of Cuba]] released a statement calling for a solution that guarantees security and sovereignty for all, describing NATO's progressive expansion as a military siege.<ref>{{News citation|date=2022-02-28|title=“Cuba advocates a solution that guarantees the security and sovereignty of all”|url=https://en.granma.cu/cuba/2022-02-28/cuba-advocates-a-solution-that-guarantees-the-security-and-sovereignty-of-all|newspaper=Granma|archive-url=https://web.archive.org/web/20220228164107/https://en.granma.cu/cuba/2022-02-28/cuba-advocates-a-solution-that-guarantees-the-security-and-sovereignty-of-all|archive-date=2022-02-28}}</ref>

The [[Democratic People's Republic of Korea]] backed Russia's actions in Ukraine and claimed that US provocations and military aggression are entirely to blame for the present situation.<ref>{{News citation|date=2022-02-26|title=The U.S. Should Not Shake International Peace and Stability at the Basis|url=http://www.mfa.gov.kp/view/article/14444|archive-url=https://web.archive.org/web/20220227002204/http://www.mfa.gov.kp/view/article/14444|archive-date=2022-02-27}}</ref>

[[People's Republic of China|China]] and [[Socialist Republic of Vietnam|Vietnam]] have both remained neutral while maintaining friendly relations with Russia.<ref name=":2" />

==== Non-ruling ====
The [[Communist Party of the Russian Federation]] has expressed support for Putin's aims to denazify and demilitarize Ukraine, while also calling for the strengthening of local self-government.<ref>{{News citation|date=2022-03-02|title=The Response to External Pressure Must Be a Radical Change of International Policy|url=https://cprf.ru/2022/03/the-response-to-external-pressure-must-be-a-radical-change-of-international-policy/|archive-url=https://web.archive.org/web/20220302144216/https://cprf.ru/2022/03/the-response-to-external-pressure-must-be-a-radical-change-of-international-policy/|archive-date=2022-03-02}}</ref>

The [[Party for Socialism and Liberation]] in the United States has made a statement describing how the intervention was the result of NATO provocations against Russia.<ref>{{News citation|journalist=Party for Socialism and Liberation|date=2022-02-24|title=PSL Statement on Russia’s Military Intervention in Ukraine|url=https://telegra.ph/PSL-Statement-on-Russias-Military-Intervention-in-Ukraine-02-25|newspaper=Liberation News}}</ref>

The [[Communist Party of Britain]], while opposing NATO expansion, called Russia's military offensive unjustified and demanded a withdrawal of troops. It also pointed out that the unilateral Russian recognition of the DPR and LPR undermines the founding principles of the [[United Nations|UN]] and gives imperialist powers an excuse to abuse such methods against other nations.<ref>{{News citation|title=Stop the war - start the peace|url=https://morningstaronline.co.uk/article/stop-war-start-peace|newspaper=Morning Star|archive-url=https://web.archive.org/web/20220228090419/https://morningstaronline.co.uk/article/stop-war-start-peace|archive-date=2022-02-28}}</ref><ref>{{News citation|title=For peace and a just solution to the conflict in Ukraine|url=https://www.communistparty.org.uk/for-peace-and-a-just-solution-to-the-conflict-in-ukraine/|archive-url=https://web.archive.org/web/20220301190552/https://www.communistparty.org.uk/for-peace-and-a-just-solution-to-the-conflict-in-ukraine/|archive-date=2022-03-01}}</ref> It supported the [[Stop the War Coalition]]'s call for the withdrawal of Russian troops.<ref>{{News citation|title=Yes, Russia should pull out — but Nato's warlike manoeuvres must end too|url=https://morningstaronline.co.uk/article/e/yes-russia-should-pull-out-natos-warlike-manoeuvres-must-end-too|newspaper=Morning Star|archive-url=https://web.archive.org/web/20220222194209/https://morningstaronline.co.uk/article/e/yes-russia-should-pull-out-natos-warlike-manoeuvres-must-end-too|archive-date=2022-02-22}}</ref>

The [[Socialist Labour Party (UK)|Socialist Labour Party]] said the conflict can be resolved quickly, but only with a neutral Ukraine. It criticized the Communist Party of Britain's ''[[Morning Star]]'' in its recent coverage of Ukraine.<ref>{{News citation|journalist=Arthur Scargill|title=Scargill's reply to the Morning Star|url=https://www.socialistlabourparty.org/post/scargill-s-reply-to-the-morning-star|archive-url=https://web.archive.org/web/20220307195208/https://www.socialistlabourparty.org/post/scargill-s-reply-to-the-morning-star|archive-date=2022-03-07}}</ref>

The [[Communist Party of Great Britain (Marxist–Leninist)]], on the basis that NATO has been conducting a three decade long slow-motion war against Russia, welcomed Russia's military challenge to NATO. It called denazification the surest way to peace.<ref name=":0">{{News citation|date=2022-03-01|title=Kiev junta facing defeat as Russia roots out fascist militias from Ukraine|url=https://thecommunists.org/2022/03/01/news/ukraine-kiev-junta-facing-defeat-russia-roots-out-fascist-militias/|newspaper=Proletarian|archive-url=https://web.archive.org/web/20220301214648/https://thecommunists.org/2022/03/01/news/ukraine-kiev-junta-facing-defeat-russia-roots-out-fascist-militias/|archive-date=2022-03-01}}</ref> The party criticized Stop the War's platforming of activists calling for imperialist escalation, as well as its call for a Russian withdrawal.<ref>{{News citation|date=2022-03-08|title=Renegacy of Stop the War on display once again at ‘antiwar’ events|url=https://thecommunists.org/2022/03/08/news/stop-the-war-renegacy-exposed-again-antiwar-movement-corbyn/|newspaper=Proletarian|archive-url=https://web.archive.org/web/20220308172322/https://thecommunists.org/2022/03/08/news/stop-the-war-renegacy-exposed-again-antiwar-movement-corbyn/|archive-date=2022-03-08}}</ref> It welcomes Russia's recognition of the DPR and LPR.<ref name=":0" />

The [[Portuguese Communist Party]] expressed its deep concern about developments in the situation in Eastern Europe, the current situation and that its recent developments are inseparable from decades of political tension and growing confrontation between the USA and NATO against the Russian Federation, on the military, economic and political planes, in which the continuous enlargement of NATO and the systematic advance of the installation of military assets and contingents of this political-military bloc increasingly closer to the borders of the Russian Federation. Calling for a solution that guarantees security and sovereignty for all, describing NATO's progressive expansion as a provocation.

"The situation in Ukraine cannot but be dissociated from the 2014 coup d'état, promoted by the USA, NATO and the EU, carried out by fascist groups, and which led to the imposition of a xenophobic and warmongering regime, whose violent action is responsible by the worsening of fractures and divisions, by the discrimination and denial of fundamental rights and citizenship of the population, and by the outbreak of war in that country. The PCP reaffirms the need to develop initiatives that contribute to de-escalation and that favor a process of dialogue with a view to a peaceful solution to the conflict, as well as the promotion of peace and security."<ref>{{Web citation|author=PCP|newspaper=pcp.pt|title=Sobre os recentes desenvolvimentos no Leste da Europa|date=2022-02-22|url=https://www.pcp.pt/sobre-recentes-desenvolvimentos-no-leste-da-europa}}</ref>

==Information warfare==
===Censorship===
In response to the crisis, Western governments and corporations have been actively censoring voices that promote alternative narratives, notably those emerging from Russia or Russia-aligned states. Almost immediately after the start of the special military operation in Ukraine, the European Union banned RT and Sputnik.<ref>{{Web citation|author=Patrick Wintour, Jennifer Rankin and Kate Connolly|newspaper=The Guardian|title=This article is more than 2 years old
EU to ban Russian state-backed channels RT and Sputnik|date=2022-02-27|url=https://www.theguardian.com/media/2022/feb/27/eu-ban-russian-state-backed-channels-rt-sputnik|retrieved=2024-03-24}}</ref> [[Reddit]] has banned links to Russian media.<ref>{{News citation|journalist=Todd Spangler|date=2022-03-03|title=Reddit Bans Links to Russian State Media Across Entire Site|url=https://variety.com/2022/digital/news/reddit-bans-links-to-russian-state-media-1235195612/|newspaper=Variety}}</ref> The previously uncensored [[search engine]] [[DuckDuckGo]] began censoring Russian news outlets because of the war.<ref name=":1">{{News citation|title=Alternative Search Engine DuckDuckGo Will Censor Sites ‘Associated With Russian Disinformation’|url=https://www.visiontimes.com/2022/03/10/duckduckgo-information-censorship-russia-ukraine-war.html|newspaper=Vision Times}}</ref>

[[Wikipedia]] has also become a major disinformation website, denying the genocide of Russians in Donbass as well as spreading other misinformation. Wikipedia also praises the [[NAFO]] neo-Nazi space<ref name=":5" /> and presents the information warfare in an extremely biased way.<ref name=":4" />

In an effort to help netizens circumvent Western propaganda about the situation, ProleWiki has collected information about [[Alternative social media platforms|alternative social media sites]].
===Propaganda===
The [[Government of the United States of America|US government]] has been briefing [[TikTok]] influencers to promote the NATO/US narrative.<ref>{{News citation|journalist=Sara Cook|date=2022-03-11|title=White House briefs social media influencers on Ukraine crisis|url=https://www.cbsnews.com/news/ukraine-russia-tiktok-white-house/|newspaper=CBS News}}</ref><ref>{{News citation|journalist=[[Richard Medhurst]]|date=2022-03-12|title=CRINGE! White House Hires TikTokers to Spread Anti-Russian Propaganda|url=https://youtu.be/Qs7FjpeaXuE}}</ref>
==References==
<references />
[[Category:2022 Russo-Ukrainian conflict]]
[[Category:History of Ukraine]]
[[Category:History of Russia]]
[[Category:Wars]]
[[Category:Pages to be protected]]

Cuba Posible

2025-02-11T07:35:54Z

Ismael: Image added

[[File:Cuba Posible.jpg|thumb|Logo of the Cuba Posible project in one of its publications]]

'''Cuba Posible''' (English: Possible Cuba) was a website and think tank created in 2014 by [[Roberto Veiga]] and [[Leinier González]] (by then editors of the Cuban catholic magazine [[Espacio Laical]]) being funded by the cuban-american entrepeneur [[Carlos Saladrigas]].<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Cuba Posible. Página web y grupo de pensamiento que bajo el auspicio del empresario cubano-americano Carlos Saladrigas es creado en 2014, por Roberto Veiga y Leinier González, hasta entonces editores de la revista católica cubana Espacio Laical.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref> It received financial aid from the [[Open Society Foundation]]<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Cuba Posible, un proyecto que ha sido promovido a través de la fundación Open Society del magnate norteamericano George Soros (la misma que financió la creación de grupos disidentes en el antiguo Campo Socialista).|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref> and was focused on promoting an [[Anti-communism|anti-communist]], [[Bourgeois democracy|multi-party]] and [[Social democracy|social democratic]] political system in [[Republic of Cuba|Cuba]].<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Presentado como un laboratorio de ideas, sus creadores declararon en entrevista el 4 de julio de ese año a la agencia Reuters que los objetivos de Cuba Posible estaban «a favor de una Cuba pluripartidista. Nuestro proyecto quiere facilitar esto y contribuir a la serenidad en el proceso». (...) «Cuba Posible promoverá el cambio transicional»|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref><ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Cuba Posible no solo no pudo lograr sus objetivos generales de fortalecer una corriente socialdemócrata y anticomunista en la masa de la intelectualidad cubana, sino que fracasó en su objetivo más concreto que era influir sobre la misma para contraponerla a la nueva Constitución.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref><ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Con su objetivo declarado de «facilitar» una «Cuba pluripartidista», manejos como el de Cuba Posible en una supuesta Cuba posfidelista fueron previstos por el propio Fidel cuando advirtió que «el pluripartidismo es el gran instrumento del imperialismo para mantener a las sociedades fragmentadas, divididas en mil pedazos».|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref><ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Si hay un texto publicado en este tiempo que los cubanos interesados, y sobre todo los cubanos revolucionarios, deben leer es «La moderación probada del espíritu
de Cuba», escrito por el Sr. Arturo López-Levy, presentado por la página del «laboratorio de ideas» Cuba Posible.
El texto es y busca ser definitorio. Reconoce finalmente al centrismo socialdemócrata como la iniciativa contra el comunismo en Cuba y a este conflicto como Socialdemocracia vs. Comunismo.
Es la mayor quitada de máscara que ha hecho el centrismo desde que promovieran a través de Cuba Posible y otras páginas el cuestionamiento a por qué en Cuba no celebrábamos el 20 de Mayo. Incluso mayor que la elaboración y divulgación de una Constitución que incluyera el pluripartidismo y prohibiera al PCC y a la UJC tener periódicos.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref> The project had it's rise during the government of [[Barack Obama]], with support for it decreasing since the first year of [[Donald Trump|Donald Trump's]] presidency, to finally end up disappearing on May 20, 2019.<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Luego del primer año de Donald Trump en la Casa Blanca, con el apoyo estadounidense muy disminuido en comparación con el gobierno de Barack Obama, los directivos de Cuba Posible anunciaron su disolución el 20 de mayo de 2019.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref>

Their publications were primarily aimed towards an academic or cultural elite audience, basing its ''modus operandi'' on the distortion of [[Republic of Cuba|Cuban history]], falsifying historical references to produce a false "third way" for [[Republic of Cuba|Cuba]].<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Cuba Posible: Nicho «académico». Dirigido a un público de élite cultural al que vende el «debatismo», es decir, la sensación que causa en ellos «involucrarse» en un debate en apariencia de alto nivel. Su objetivo es dar valor a ideas de «tercera vía», replanteamientos del socialismo, «nuevas construcciones de relato histórico», reubicación de paradigmas, de nuevos héroes a través de la heroización o desvillanización de personajes de la historia nacional. Insertar esto en la mente de los lectores como la publicidad inserta en la mente de los consumidores la «necesidad» de un nuevo celular. Cuba Posible intenta convencerlo de que usted necesita y puede tener otra, una nueva historia, nuevos héroes, viendo valores en acontecimientos históricos que no los tienen y dejar de verlos en los que sí los tienen. El placer psicológico de la revelación de una «nueva verdad». Es la aplicación política de la «buena nueva» religiosa.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref><ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=En su onanismo no dejan de rebuscar incluso en figuras del ideario revolucionario como Mella, Guiteras y José Antonio Echevarría. Todos son intentos para dar una investidura histórica artificial de la que carece por naturaleza la socialdemocracia en Cuba. Esa es la función historicista del «laboratorio de ideas» Cuba Posible.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref> Among the academics involved in Cuba Posible, the following stand out: the political scientist [[Julio César Guanche]], who until March 2017 was a member of its Board of Directors and coordinator of the «Ágora» Program;<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Julio César Guanche (1974). Profesor, ensayista e investigador cubano. Egresado de Derecho de la Universidad de La Habana. De 1998 a 2001 fue director de la revista Alma Mater. En distintas etapas de su vida ha sido colaborador de las revistas Temas, La Jiribilla y posteriormente de On Cuba. Es autor de los ensayos La verdad no se ensaya. Cuba: el socialismo y la democracia; La Libertad como destino. Valores, proyectos y tradición en el siglo XX cubano y El poder y el proyecto. Como integrante de Cuba Posible fue miembro del Consejo de Dirección y coordinador del Programa «Ágora», hasta de marzo de 2017 cuando en la página web de Cuba Posible se informa mediante una nota que había pedido ser relevado de esos cargos. Mantiene el blog personal www.jcguanche.wordpress.com.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref> and the economist [[Pedro Monreal]], who was the Academic Advisor of the project and coordinator of the "Zero Poverty" section.<ref>{{Web citation|author=Carlos Luque Zayas Bazán|newspaper=La Pupila Insomne|title=Sr Pedro Monreal: No comemos del mismo pan|date=2018-10-15|url=http://lapupilainsomne.jovenclub.cu/?p=64360}}</ref>

Among the activities carried out by Cuba Posible, the following stand out: in 2016, a discredit campaign against the [[Communist Party of Cuba]] within the framework of the drafting of the ''Conceptualization of the Economic and Social Model''; and between 2017 and 2018, the promotion of an alternative constitution to the one finally approved on April 10, 2019.<ref>{{Citation|author=Javier Gómez Sánchez|year=2021|title=Las flautas de Hamelin. Una batalla en Internet por la mente de los cubanos|quote=Durante 2016 Cuba Posible realizó una intensa campaña de descrédito hacia las actividades del PCC para la redacción de la Conceptualización del Modelo Económico y Social. A lo largo de 2017 y 2018 promovió una Constitución alternativa, en demérito de la propuesta de Reforma Constitucional presentada a referéndum nacional y el proceso de consulta popular sobre la misma aprobada por voto del 86 % de la población en edad electoral.|pdf=http://media.cubadebate.cu/wp-content/uploads/2021/10/Las-flautas-de-Hamelin-PDF-Interactivo.pdf|city=La Habana|publisher=Casa Editora Abril}}</ref>

Currently, the past role of Cuba Posible oriented towards the Cuban intelligentsia and artistic communities has been assumed by the [[Hypermedia Magazine]] and [[Rialta]] magazines, both financed by the [[National Endowment for Democracy|NED]].<ref>{{Web citation|author=Javier Gómez Sánchez|newspaper=Cubadebate|title=Alfredo Guevara en la hora actual de Cuba|date=2021-03-09|url=http://www.cubadebate.cu/opinion/2021/03/09/alfredo-guevara-en-la-hora-actual-de-cuba/|quote=En la actualidad, el antiguo rol mediático de Cuba Posible, en su orientación hacia la comunidad artística e intelectual cubana lo han asumido las revistas Rialta e Hypermedia Magazine, ambas financiadas por la NED, la misma financista de Encuentro. Con la particularidad que estas últimas se han saltado la etapa inicial y desde el inicio asumieron una proyección abierta contra la Revolución.}}</ref>
<references />

Harpal Brar

2025-01-25T21:21:50Z

Ismael: Changed all "is" for "was", etc.

{{Infobox person|name=Harpal Brar|image=14913370281 678c9e814a c.jpg|birth_date=5 October 1939}}

'''Harpal Brar''' (October 5, 1939 - January 25, 2025) was an Indian [[communist]] politician, writer and businessman, based in the [[United Kingdom]]. He was the founder and former chairman of the [[Communist Party of Great Britain (Marxist–Leninist)]], a role a stepped down from in 2018.

Born in [[Muktsar]], [[Punjab (British India)|Punjab]], [[British Raj (1868–1947)|British India]], Brar has lived and worked in Britain since 1962, first as a student, then as a lecturer in law at [[University of Westminster|Harrow College of Higher Education]] (later merged into the renamed [[University of Westminster]]), and later in the textile business. Brar owned buildings in West London which he used for CPGB-ML party activity, and he part-owned an internet shop called "Madeleine Trehearne and Harpal Brar" which sells shawls.

Brar was the editor of a [[left-wing]] political newspaper ''[[Lalkar]]'', the former journal of the [[Indian Workers' Association]]. Brar wrote multiple books on subjects such as [[communism]], Indian republicanism, imperialism, [[anti-Zionism]], [[anti-colonialism]], and the [[British General Strike]]. He was also a co-founder of the [[Hands Off China (Campaign)|Hands off China campaign]].

== Views on China ==
On 19 July 2008, Harpal Brar was one of the people who founded the Hands off China campaign, dedicated to defending the [[People's Republic of China]] and to defending "China's sovereignty and territorial integrity" and "the country's just stance on issues of its vital national interest such as [[Taiwan]] and [[Tibet]]."<ref>{{Web citation|newspaper=Xinhua|title=Britain's Communist Party launches "Hands-Off-China" campaign|date=2008-07-20|url=https://web.archive.org/web/20160114034845/http://news.xinhuanet.com/english/2008-07/20/content_8576443.htm|archive-url=https://web.archive.org/web/20160114034845/http://news.xinhuanet.com/english/2008-07/20/content_8576443.htm|archive-date=2016-01-14}}</ref>

== Works<ref>https://www.goodreads.com/author/show/1045109.Harpal_Brar</ref> ==

* ''Inquilab Zindabad, India's Liberation Struggle (2014)''
* ''Revisionism and the Demise of the USSR''
* ''The 1926 British General Strike''
* ''Nato's Predatory War Against Yugoslavia''
* ''Imperialism and War''
* ''Imperialism – the Eve of the Social Revolution of the Proletariat''
* ''Chimurenga! The Liberation Struggle in Zimbabwe''
* ''Imperialism – Decadent, Parasitic, Moribund Capitalism''
* ''Bourgeois Nationalism or Proletarian Internationalism?''
* ''Perestroika: The Complete Collapse of Revisionism'' (1992)
* ''Trotskyism or Leninism?'' (1993)
* ''Social Democracy: The Enemy Within'' (1995)

== References ==
[[Category:Communists]]
[[Category:British communists]]

Harpal Brar

2025-01-25T21:16:54Z

Ismael: He died today

{{Infobox person|name=Harpal Brar|image=14913370281 678c9e814a c.jpg|birth_date=5 October 1939}}

'''Harpal Brar''' (October 5, 1939 - January 25, 2025) is an Indian [[communist]] politician, writer and businessman, based in the [[United Kingdom]]. He is the founder and former chairman of the [[Communist Party of Great Britain (Marxist–Leninist)]], a role a stepped down from in 2018.

Born in [[Muktsar]], [[Punjab (British India)|Punjab]], [[British Raj (1868–1947)|British India]], Brar has lived and worked in Britain since 1962, first as a student, then as a lecturer in law at [[University of Westminster|Harrow College of Higher Education]] (later merged into the renamed [[University of Westminster]]), and later in the textile business. Brar owns buildings in West London which he uses for CPGB-ML party activity, and he part-owns an internet shop called "Madeleine Trehearne and Harpal Brar" which sells shawls.

Brar is the editor of a [[left-wing]] political newspaper ''[[Lalkar]]'', the former journal of the [[Indian Workers' Association]]. Brar has written multiple books on subjects such as [[communism]], Indian republicanism, imperialism, [[anti-Zionism]], [[anti-colonialism]], and the [[British General Strike]]. He is also a co-founder of the [[Hands Off China (Campaign)|Hands off China campaign]].

== Views on China ==
On 19 July 2008, Harpal Brar was one of the people who founded the Hands off China campaign, dedicated to defending the [[People's Republic of China]] and to defending "China's sovereignty and territorial integrity" and "the country's just stance on issues of its vital national interest such as [[Taiwan]] and [[Tibet]]."<ref>{{Web citation|newspaper=Xinhua|title=Britain's Communist Party launches "Hands-Off-China" campaign|date=2008-07-20|url=https://web.archive.org/web/20160114034845/http://news.xinhuanet.com/english/2008-07/20/content_8576443.htm|archive-url=https://web.archive.org/web/20160114034845/http://news.xinhuanet.com/english/2008-07/20/content_8576443.htm|archive-date=2016-01-14}}</ref>

== Works<ref>https://www.goodreads.com/author/show/1045109.Harpal_Brar</ref> ==

* ''Inquilab Zindabad, India's Liberation Struggle (2014)''
* ''Revisionism and the Demise of the USSR''
* ''The 1926 British General Strike''
* ''Nato's Predatory War Against Yugoslavia''
* ''Imperialism and War''
* ''Imperialism – the Eve of the Social Revolution of the Proletariat''
* ''Chimurenga! The Liberation Struggle in Zimbabwe''
* ''Imperialism – Decadent, Parasitic, Moribund Capitalism''
* ''Bourgeois Nationalism or Proletarian Internationalism?''
* ''Perestroika: The Complete Collapse of Revisionism'' (1992)
* ''Trotskyism or Leninism?'' (1993)
* ''Social Democracy: The Enemy Within'' (1995)

== References ==
[[Category:Communists]]
[[Category:British communists]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T21:03:31Z

Ismael:

<blockquote>''This article, a solution to a problem that has plagued a century of Marxian scholarship, was previously unpublished.''<ref group="CN">Shaikh presented a solution of the transformation problem initially in his doctoral thesis in 1973. Similar solutions were presented, independently from each other, by Morishima (1973) and Okishio (1974). In evaluating the three solutions, we find that Shaikh's (1973 and 1977) is conceptually by far richer than the other two, while the solutions by Morishima (1973) and Okishio (1974) are restricted mainly to the mathematical statements of the problem and the conditions required for the fulfillment of the two equalities. - Footnote taken from Tsoulfidis, L & Tsalikē, P (2019) ''Classical political economics and modern capitalism: theories of value, competition, trade and long cycles'', Springer, p. 99.</ref></blockquote>{{Library work|title=Marx's Theory of Value and the "Transformation Problem"|author=Anwar Shaikh|published_date=1977|pdf=https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ}}

== I. Introduction ==
It is curious that in the almost eighty years since the publication of Volume III of Marx's ''Capital'', a major theoretical problem, the infamous "transformation problem", has never been satisfactorily resolved. Throughout Volume I, written by Marx ''after'' he had already completed the first draft of Volume III, the analysis is based on the assumption that exchanges of commodities take place at prices proportional to their labor values. I will call these prices the "direct prices" of commodities. In Volume III, which was compiled by Engels from the incomplete first draft, after Marx's death, Marx extends his analysis to take into account "prices of production", demonstrating how one can derive these prices from the "direct prices" of Volume I. This derivation, from then on the center of an intense controversy, was the original "transformation procedure".

Opponents of the labor theory of value immediately seized on the apparent incompleteness of Marx's procedure. Bohm-Bawerk, for instance, questioned the tenability of Marx's statement that the sum of prices after the transformation would remain equal to the sum of values; others have pointed out that Marx's procedure contains an "error", because while he transforms the prices of outputs from "direct prices" to "prices of production", he leaves the inputs untransformed. Since commodities appearing as outputs of a productive system are often also inputs into the system, it is argued that Marx's procedure is logically flawed; "direct prices" and "prices of production" are two separate and unrelated phenomena, leading to a "great contradiction" between Volume I and Volume III of ''Capital''. More recently, essentially the same point has been made by Samuelson [17], in which he attacks the very idea of a transformation procedure: "Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila! You have completed your transformation algorithm".<ref group="EN">P. A. Samuelson [Bibliography Reference 17], p. 400.</ref> As we shall see. this criticism is completely incorrect, it is also somewhat misplaced; if anything, it applies most properly to the neoclassical "transformation procedure" which was the center of the so-called Cambridge Capital Controversies, a procedure in which Samuelson himself was quite prominent.<ref group="FN ">For a discussion of this debate as a neoclassical "transformation problem", see Shaikh [19].</ref>

On the Marxian side, there have been, of course, many "solutions" to the transformation problem, from Bortkiewicz's original transformation procedure and its subsequent variants to Francis Seton's important paper [18]. Unfortunately, as even supporters and sympathetic critics of the labor theory of value admit, these "solutions" all suffer from the same basic defects; they show "the possibility of a consistent derivation of prices from values"<ref group="EN">Meek, "Some Notes on the 'Transformation problem'", in Meek [12], p. 150.</ref> while apparently severing the crucial links between price and value magnitudes which Marx seemed to emphasize in his own procedure. In most discussions of the issue, these links have appeared in the form of the following equalities: of the "sum of prices" and the "sum of values"; of the magnitude of profits and the magnitude of surplus-value; of the profit-wage ratio and the rate of surplus- value; and of the general rate of profit in price terms and the same rate in value terms. As is well-known by now, in any "correct solution" either the first or the second, but not both, can be always made to hold, while in general the other two cannot. What then are we to make of Marx's procedure?

It has been suggested that Marx, having published Volume I in full confidence that the labor theory of value was the correct basis, discovered too late, in writing Volume III, that it was not. But that doesn't work, because we know that Volume I was published well after Volume III had been drafted. Others, perhaps more charitably, have suggested that because the labor theory of value as a theory of relative prices was so much a part of the tradition of classical economics, it was taken over by Marx almost unexamined. A variant of this line of reasoning, which is popular among some Marxists, is that if nowadays we view Marx-as-an-economist as a member of the classical school, it is we who import into Marx's theory of value, which is only nominally similar to that of Smith and Ricardo, the pre-Marxian question of the quantitative relationship between prices and values. In the variant, therefore, the lack of examination is on our part, not that of Marx. Marx was simply not terribly concerned with the quantitative relationship.<ref group="EN">See, for instance, Mandel [5], pp. 64-65. For a non-Marxist with a similar position, see Baumol [2].</ref>

To anyone who has read Marx's voluminous comments and critiques of the classical economists, notably in ''Theory of Surplus-Value'' and in ''Capital'', it becomes impossible to ascribe to Marx an unthinking take-over of a labor theory of value from anyone at all. Marx spends literally hundreds of pages discussing values and their relationship, both qualitative and quantitative, to wages, profits and prices; no aspect, no issue, is ignored in these incredibly detailed discussions. So the main line of that argument does not hold up. As for the variant, insofar as it argues that there is a vast difference between the "value" of Smith and Ricardo and the "value" of Marx, it is undeniably correct; where it goes wrong is in jumping from this important fact to the conclusion that Marx either does, or even could ignore the quantitative aspects which dominated the pre-Marxian "value theory".

Consider for a moment the fact that there is a vast difference between Einstein and Newton too, one which stems from different methodologies, different objects of analysis, etc., and extends all the way to differences in concepts and calculations. There is, in other words, what Thomas Kuhn calls a "paradigm break" between the two modes of analysis.<ref group="EN">Kuhn [4]. The term "paradigm break" is used figuratively here. The notion of a break between the problematic of classical economy and that of Marx, which Althusser [1] discusses, is considerably more precise.</ref>

The notion that Einstein and Newton, for instance, treat what appears to be some autonomously defined subject—"Physics"—is an illusion which is fostered by textbook propagandists whose very aim is to treat science as the glorious and lofty march towards "truth". In reality, however, almost every conception and calculation in Relativity Theory contradicts those of classical physics.

To reduce Einstein to a "tidied up" Newton would therefore be impossible. What is worse, this impossibility would show up in the form of "logical contradictions", "redundancies", and "irrationalities" in Einstein, not in Newton, for the propositions derived from the Theory of Relativity cannot be derived within a Newtonian basis. What can we say, for example, in a Newtonian framework about the fundamental Einsteinian notion that there exists a finite limit, the speed of light, for the velocity of any object? Only that it is clearly wrong, or at best, a notion we (as Newtonians) have no use for in our framework—one which therefore appears "mythical", "metaphysical", "irrelevant".

Insofar as some Marxists have pursued a similar line of argument as to the "reduction" of Marx to Ricardo, they have been making an absolutely crucial point: namely, that by attempting to "reduce" Marx to Ricardo, or to neoclassical economics, the impossibility of this reduction will manifest itself as a series of "contradictions" and "irrationalities" in Marx! What we think we find, on a Ricardian or neoclassical basis, is that Marx is simply incorrect, or at best gets involved in an "unnecessary muddle".<ref group="EN">J. Robinson [15], p. xi, and Ch. III, especially pp. 20-22.</ref> What we have in fact demonstrated is that you cannot derive Marx from Ricardo or Samuelson.

Obviously, none of this implies that Marx is above criticism. The point here is that in order to be able to evaluate Marx's solution to some problem, we must first of all define the problem. We must, in other words, ''locate'' the problem in terms of some general analysis, so that we may see which solutions are adequate and which are not. It has often been said that the hardest part of solving a problem is figuring out the question!

Some Marxists, however, jump from the implications of the difference between Marx and Ricardo to the false conclusion that Marx was, or at least that Marxists could be, unconcerned with the quantitative relationships between prices and values (whether he was and whether Marxist analysis could be are in fact two separate issues, but one leads to the other).

To begin with, the statement that Marx did not in fact consider these matters to be important runs headlong into the contrary evidence of the vast amount of attention Marx's writings give to them; the only way to get around this evidence in turn, is to try and show that the issue itself is irrelevant. In this way the real basis of this line of reasoning turns out to be the argument that Marxist analysis can, and should ignore the quantitative relationship. On the one hand, this argument gets much of its impetus from the persistent, and to some extent, damaging attacks on the "transformation from values to prices"; and on the other, it derives much of its appeal from a reaction against the obvious banality of neoclassical economics, in which relative prices figure so prominently. Nonetheless, the argument is simply untenable, for it is based on an ''unspoken'' conception about scientific analysis which when made explicit is quite unsupportable: namely, that as a science, the Marxist analysis of capitalism can simply choose to ignore the quantitative aspects of any phenomena, once it has understood the qualitative aspects. Marx himself had a higher opinion of his work:<blockquote>Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. (''Capital'',<ref group="FN ">All quotes from ''Capital'' refer to the International Publishers edition, New York, 1967.</ref> Volume III, Part I, Ch. I, p. 25) </blockquote>Unfortunately not many Marxists today seem willing to accompany Marx all the way in his arduous journey; and of those that do, even fewer appear to be interested in pulling together and extending, where necessary, the sometimes incomplete analysis of Volume III. The labyrinths of the turnover of capital in Volume II, the "petty detail" of the endless tables of differential rent in Volume III, and certainly the unending controversy about the "transformation problem" must all seem so very tedious, perhaps even dangerously confusing, to those who remain content to bask in the brilliance of Volume I.<ref group="EN">Marxists who attempt to directly apply the abstract categories of Volume I of ''Capital'' are in a sense reverting to a Ricardian methodology. Marx is careful to point out that a basic flaw in Ricardo's method is that he "jumps" directly from the abstract (value) to the concrete (prices of production, rent, taxes) without tracing the intermediate connections. (Marx, ''Theories of Surplus Value'', Part II, Ch. X, Sect. 4.6., p. 191.) It takes Marx three volumes to make that connection!</ref> But Marx at least did not find in the difficulty of a subject a sufficient reason for avoiding it: <blockquote>That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits. (''Capital'', Volume I, "Preface to the French Edition", p. 21) </blockquote>

== II. Value and Price ==

=== 1. Calculation versus Conception ===
I have, up to now, confined myself to a discussion of the so-called "transformation problem" and of various attitudes toward it. It is, however, a major purpose of this paper to demonstrate that one can, ''precisely in the manner set out by Marx'', calculate the "correct prices of production" from values. The link between the two, one so obvious that until recently it seems to have been completely overlooked,<ref group="FN ">The transformation procedure contained in this paper was first presented in a paper delivered to the Graduate Economics Department of Yale University, February 1973. A similar result was presented by Michio Morishima in "Marx in the Light of Modern Economic Theory: An Inaugural Lecture", London School of Economics, November 1973.</ref> is simply that while Marx's procedure is a perfectly general one, it is only the first step in an iterative transformation from "direct-prices" to "prices of production". But while this extension of Marx's procedure does falsify the so-called "impossibility theorems" on it (most recently voiced by Paul Samuelson), it by no means establishes the need for such a transformation in the first place. As has often been pointed out, "prices of production" can instead be calculated directly from the same "economic data" as "direct-prices". The difference between the two methods of calculation therefore lies not in the end point but in the beginning; that is, it lies not in the magnitude of "prices of production" but in their meaning, in their conception. To reduce the issue of the transformation to one of merely calculation, is simply to reduce Marx to neoclassical economics. And, as I pointed out earlier, the impossibility of such a reduction can only "show up" as a "redundancy" in ''Marx'': after all, if both methods arrive at the same end point, why bother with Marx's needless "detour" through values?

The question may be put more precisely: in what way is Marx's analysis of value different from that of orthodox economics? What sorts of issues, conceptions, and calculations are specific to it alone? What laws does Marx derive from it which cannot be derived from conventional economic analysis? Unless we make an attempt to answer these questions, any discussion of the "transformation" issue is quite irrelevant: without a proper understanding of the concept of value as it appears in Marx, it is pointless to try and analyze the so-called "transformation from values to prices of production". The discussion of the actual transformation algorithm is therefore postponed until Section III. In this section we must establish its ''raison d'etre''.

=== 2. Basic Method ===
<blockquote>Whatever the social form of production, labourers and means of production always remain elements of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another. (''Capital'', Vol. II, Ch. I, Section I, p. 34.)

The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers... which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. (''Capital'', Vol. III, Ch. XLVII, Section II, p. 791.) </blockquote>The preceding quotes present a crucial element of the Marxist approach to history: namely, that the specific manner in which production is organized, and surplus-labor extracted from the direct producers, forms the "hidden basis of the entire social structure". For Marx, it follows from this that the concepts adequate to the analysis of any specific historical epoch, including that of capitalism, must necessarily be based on these aspects of its social practice. The struggle for production is the fundamental social practice in all human society; hence the analysis of production is the beginning point of Marxist analysis. The extraction of surplus-labor is the basis of all class societies; hence its study is the source of the concepts adequate to an analysis of all class societies. ''Capital'' is Marx's application of this approach to the analysis of capitalism.

=== 3. The Production of Commodities ===
One very important aspect of the social process in which laborers and means of production are united in the ''capitalist'' mode of production, as opposed to all others, is that under the capitalist mode the overriding aim of production is not production-for-direct-social-use but production-for-exchange. In the caste system of India, for example, the social regulation of productive activity is made starkly visible by the existence of hereditary castes whose members can, and in fact must, perform only those concrete types of labor which are required of their caste. Production is, in this society, production-for-direct-social-use (whatever we may think of that use); distribution of the products of labor is similarly directly regulated.

But in capitalism, we have commodity production. What turns a product (something which is produced) into a commodity (something which is bought and sold) is a specific set of social structures which organize the productive activities (the labor) of society around production-for-exchange. In commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction. Society is organized in such a way that there is no ''direct'' social regulation of productivity activity: during production people act as individuals, relating only to their products; it is in exchange, therefore, that the true social nature of their existence is forcibly demonstrated to them through the relation of their commodities to those of others. Exchange, so to speak, is a "symptom" of commodity production, and its real limits can only be understood by relating exchange to its "hidden basis"—i.e., to production. It follows, therefore, that in a Marxist analysis the derivation of the categories of exchange, such as money and price, as well as their movements, must necessarily be based on the categories of production. Taken by itself, as an eternal category divorced from any particular type of production, exchange appears to be a smooth, static, inherently equilibrating process: witness the parables of neoclassical economics. Circulation is, to all appearances and purposes, the sphere of freedom, equality and equilibrium. But for Marx, circulation is precisely the sphere in which the contradictions inherent in the production of commodities are "both exposed and resolved";<ref group="EN">K. Marx, ''A Contribution to the Critique of Political Economy'', p. 86.</ref> the manner in which these contradictions in production dominate exchange, both qualitatively and quantitatively, is what Marx means by the law of value: "in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time necessary for their production forcibly asserts itself like an overriding law of Nature".<ref group="EN">Marx, ''Capital'', Vol. I, Ch. 1, p. 75.</ref>

=== 4. Exchange-Value and Value ===
In all production, concrete (i.e., specific) types of labor and concrete inputs result in a concrete product. Moreover, since the produced inputs themselves must be the products of past labor, we may say that in all production, including commodity production, concrete products are the results of concrete labors, in a given natural context.<ref group="EN">''Ibid''., p. 43.</ref> But commodity production (the production of goods-for-exchange) necessarily implies exchange; and in exchange the distinct qualities which give various commodities their "concreteness" are abstracted from. In exchange, what matters is not the physical properties of iron but how much wheat, or cloth, or coffee, etc., we can get for the iron; hence in exchange we treat every commodity not as a concrete bundle of distinctive qualities, but as the equivalent of specific ''quantities'' of all other commodities.

Precisely because exchange is a social process which quantitatively compares and equates different products, it is only in those societies which produce for exchange that the product of human labor acquires the property of "quantitative worth". In addition to being useful, they are now also "valuable": they are commodities.

We have to get a little more exact in our terminology at this point. In conventional usage (and with some classical economists), the term "value" sometimes refers to the notion of a useful object, and at other times to the notion of the "quantitative worth" of an object. In order to avoid confusion, therefore, Marx uses the term ''use-value'' to mean useful object, and the term ''exchange-value'' to mean the quantitative "worth" of an object. In Marx's terminology, therefore, a commodity is both a use-value and an exchange-value.

It is usually not difficult to explain what is meant by a useful object.<ref group="FN ">The apparent simplicity of the term useful object or use-value is misleading. Many Marxists, for instance, confuse it with physical object, i.e., a good as opposed to a service. This is definitely not the sense in which Marx uses the term use-value.</ref> But when we say that a commodity is "worth" something just what is implied? Suppose I say that in barter a bushel of corn is "worth" a ton of iron, and also a yard of silk, and an ounce of gold, and so on. At first glance, what I appear to be saying is that there are many different quantitative expressions for the "worth" of a bushel of corn, depending on which other commodity (iron, silk or gold) I choose to ''measure'' it by.

But there is a deeper problem here. In order for me to measure the "worth" of corn in terms of gold, for instance, gold must also be "worth" something itself. Otherwise I cannot say how much gold is equivalent to a bushel of corn. It is just like my saying that a stone "weighs" ten grams; what I mean is that on a scale it takes ten pieces of iron called gram-weights to equal the weight of the stone. But clearly, in order for me to carry out this operation, both stone and iron must already possess the property of being "heavy", of having "weight"; the gram-weights don't make stones "heavy", they only measure the already existing heaviness of stones.

Exactly the same conclusion applies to "quantitative worth". The factors which cause commodities to have "quantitative worth" in the first place must be carefully distinguished from the measurement of this "worth". Measuring the "worth" of corn in iron will give a different result from measuring it in gold; but neither measure causes corn to have "quantitative worth". Rather, each merely expresses the preexisting "worth" of corn in terms of some particular commodity.

The question of exchange-value ("quantitative worth") is therefore really a twofold one: first, what is the cause of "quantitative worth"; and second, how is this "worth" actually expressed, measured, in exchange?

If we look at society as a regularly reproduced set of social relations, it becomes very clear that the production and reproduction of the masses of useful objects which correspond to various social needs requires a definite, quantitative distribution of social labor. Each different useful product requires a concretely different type of labor; reproduction of the material basis of the society consequently requires the existence and reproduction of appropriate amounts of different concrete labors. That is to say, social labor from the point of view of its capacity to produce different use-values is what Marx calls social labor in its role as ''concrete'' labor.<ref group="EN">''Ibid''., p. 46.</ref>

A commodity, however, is more than a mere use-value; it is at the same time an exchange-value, an object possessing "quantitative worth". It follows from this that the very same social relations which endow use-values with the property of "quantitative worth", endow the labor which produces these use-values with the capacity to create "quantitative worth". From this point of view, all commodity producing labor is qualitatively alike and quantitatively comparable: it is what Marx calls "(commodity producing) social labor in its capacity as ''abstract'' labor".<ref group="EN">The distinction between concrete labor and abstract labor is similar to (though distinct from) the distinction between productive and unproductive labor. In both cases, the properties of Value and surplus-Value lie at the heart of the matter.</ref>

Therefore, to the question on the cause of exchange-value, Marx's answer is: abstract labor, i.e., <s>labor actually engaged in commodity production</s>,<ref group="CN">El trabajo abstracto no es "el trabajo efectivamente empleado en la producción de mercancías". En la producción de mercancías se emplea trabajo, y este a su vez tiene un ''carácter'' doble: abstracto y concreto. En la práctica, estos no pueden separarse puesto que ocurren en simultáneo y se implican mutuamente. </ref> is the cause of exchange-value.<ref group="EN">Marx [10].</ref> Moreover, if we consider the production of a commodity from the point of view of the whole society, it becomes apparent that the commodity's exchange-value represents the total amount of abstract labor-time socially necessary<ref group="EN">Marx uses the term "socially necessary labor-time" in two senses. First, the average quantity of abstract labor-time required to produce a single commodity; this determines the magnitude of its Value (''Capital'', Vol. I, Ch. I, p. 39). Second, the total quantity of labor-time which would be required to produce a given type of commodity in the amount consistent with effective demand; if the actual quantity of labor-time, and hence the actual amount of the product, deviates from the above necessary amount, the market-price of the commodity would deviate from its regulating price. (''Capital'', Vol. III, Ch. xxxvii, p. 635). The first sense of socially necessary relates the commodity to its conditions of production. The second sense relates the mass of commodities to the expressed social need for them.</ref> for its production, both directly (in the process of producing the commodity from its material inputs) and indirectly (in the process of producing the material inputs themselves, and the inputs of the inputs, and so on). Marx consequently refers to this total sum of abstract labor-time as the ''immanent measure'' of a commodity's exchange-value, what he calls its "Value".<ref group="EN">"... he [Adam Smith] confuses—as Ricardo also often does—labour, the intrinsic measure of value, with money, the external measure . .. (Marx, ''Theories of Surplus-Value'', Part II, Ch. xv, Section 2, p. 403).</ref>

The discerning reader will have noticed that I have capitalized the term Value. This is done in order to emphasize the distinctiveness of Marx's use of the term, and especially to avoid confusing it with the term "value" in orthodox economics (where it generally refers to a price of some sort).

It should also be noted here that the Value of a commodity is the ''average'' amount of abstract labor-time required for its production. The total output of a particular commodity represents<ref group="FN ">The term "represents" is used here rather than the more common term "embodied". It is clear in Marx, for instance, that it is not the historical cost of a commodity in labor-time, but rather its current cost of reproduction, which determines the magnitude of a commodity’s Value. (''Capital'', Vol. I, Ch. 1, p. 39). As such, it is not a question of the labor-time "embodied" in a commodity but of the social cost which the current production of the commodity entails.</ref> the expenditure of a certain amount of abstract labor-time which under existing conditions is required for its production. In exchange, however, all commodities of a given type are treated alike; each commodity is merely "an average sample of its class",<ref group="EN">Marx, ''Capital'', Vol. I, p. 39.</ref> and as such represents the average expenditure of abstract labor-time.<ref group="EN">The amount of labor-time socially necessary for the production of a commodity is determined by the average conditions of production of the average commodity. If the average conditions are altered, as in Marx's example of the introduction of power looms in weaving, then though existing cloth may have required more time than this new average, the magnitude of its value is still determined by the current average, precisely because all cloth of a given quality is treated alike in exchange. Similarly, if hand-loom weavers continue to hang on, then even though it may take them twice as long as the average to produce a bolt of cloth, the value of the cloth is nonetheless determined by the average. See Footnote 13 above, also.</ref>

In order to avoid confusion later on, I will distinguish between the ''sum of Values'' (the abstract labor-time required to produce the total social product<ref group="FN ">I refer here only to the total ''commodity'' product. Use-values produced for direct use are not treated here, in spite of their great importance in concrete analyses of actual capitalist societies. Marx himself distinguishes between social capital and social wealth "of which capital is only a part". (Marx, ''Capital'', Vol. I, Ch. X, p. 200).</ref>), the ''total Value'' of a given branch of production (the Value of its total output),<ref group="EN">The total social product is usually defined to include only the commodities newly produced in the given period of time. However, the existence of durable commodities implies that in any given period, commodities and inventories of unsold products may enter exchange as commodities even though they have not been produced in that period. In the treatment of fixed constant capital, for instance, this issue becomes important. Marx himself suggests in the treatment of fixed constant capital that the portion which is not used up in the process of production should be counted as part of the annual product (''Capital'', Vol. I, Ch. IX, p. 213). Properly speaking this treatment of fixed constant capital requires Marx's theory of rent, and for that reason is not developed in this particular paper. It should be noted, however, that a Marxian treatment of this issue will not be identical with the von Neumann-Sraffa "joint product" approach.</ref> and the ''unit Value'' of a single commodity (the average Value in the sense defined above). All terms are defined over a given period of time.

=== 5. Money and Price ===
We turn now to the second aspect of exchange-value: how is "quantitative worth" actually expressed in exchange? To this Marx answers: in exchange, the "quantitative worth" of a commodity ''must'' take the form of money-price. Since exchange is the interchange of two commodities, at first glance it seems obvious that there are as many measures of a commodity's worth as there are other commodities to measure it by. And historically, where exchange is sporadic or irregular, this is in fact true. But as exchange spreads and develops, this variety of different possible measures increasingly becomes a barrier to the smooth functioning of the process; without a point of reference, the direct comparison of every commodity with every other becomes impossibly complex. Consequently it becomes increasingly necessary to socially recognize a given commodity out of those available as the one commodity in which all others are to express their "worth"; this special commodity therefore becomes the universal equivalent, the money-commodity. We will henceforth assume it is gold.<ref group="FN ">It is beyond the scope of this paper to discuss the different forms of money such as token money (metallic and paper tokens of gold and silver) and credit money. In any case, this extension of the analysis cannot be attempted without first resolving it satisfactorily in the simplest case—that of pure gold-money.</ref>

Notice that money does not by itself cause commodities to have "worth", any more than gram-weights cause stones to have weight. On the contrary, it is only because both gold and the other commodities have "quantitative worth" (exchange-value) in the first place that we can express their worth of commodities in terms of gold. The money-price of a commodity is the "golden" reflection, the external measure, of its exchange-value. It is what Marx calls the ''form'' taken by Value during exchange.<ref group="EN">Marx, ''Capital'', Vol. I, pp. 47-48.</ref>

=== 6. Production and Circulation ===
The foregoing analysis has focused on the difference between Value and money-price. Implicit in this distinction, however, is another equally important one: the Marxian distinction between the production of commodities and their circulation.

Production, Marx notes, is the creation or transformation of a use-value.<ref group="EN">Marx, ''Capital'', Vol. I, Ch. VII, Section 1.</ref> Insofar as the product is a commodity, it belongs to some individual; it enters circulation, therefore, as private property.

Consider the case of two commodity producers, a fisherman and a hunter. They bring definite quantities of fish and game, respectively, to the market for the purpose of exchange; commodities with definite Values representing definite quantities of abstract labor-time thus enter the market-place.

Now what happens in exchange? In the exchange process the two commodity producers negotiate terms under which they will ''transfer the titles'' to their respective commodity property.<ref group="EN">Marx, ''Capital'', Vol. II, Ch. VI, Sect. I and Sect. III, p. 149.</ref> But note: the time they spend bargaining over these terms of trade will in no way increase the total amount of fish or game to be had; it will determine only the final pattern of distribution.<ref group="EN">''Ibid''., pp. 129-130.</ref> In fact, insofar as they need to subsist during the actual process of exchange itself, their...<blockquote>...costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third [person to perform] these exchanges, and thus lost no labour time directly, then each of them would have to cede a proportional share of his product to [that third person]...

Circulation costs as such, i.e. consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange..., are therefore a deduction either from the time employed on production, or from the values posited by production. ''They can never increase the value''. They belong among... the inherent costs of production resting on capital. (Marx, ''Grundrisse'', Notebook VI, pp. 632-633. Emphasis added) </blockquote>This is a very important point in Marx's analysis. The circulation process is the process whereby commodities change hands, where their titles of ownership are transferred. As such, no commodities and hence ''no Value is created in the circulation process''.<ref group="EN">''Ibid''., Ch. V, p. 127. Of course, the circulation process adds to the money price of a commodity. As long as Value and price are kept conceptually separate, this presents no problems at all.</ref> If anything, part of the previously produced mass of commodities (and hence the Value previously created in production) may be used up just in the struggle over its distribution.

One immediate implication of this is that the categories of circulation are thereby limited by those of production.<ref group="FN ">Another implication is that not all labor-time, even if it stems from wage labor employed by capitalists, leads to the creation of Value, This has been a perennial topic of discussion in Marxist literature under the heading of productive and unproductive labor. Though we cannot treat it here, it is important to note that it arises from the distinctive character of the Marxian concept of Value.</ref> Value is created in production, materialized in commodities; ''regardless of the actual money prices at which these commodities are sold'', only the same mass of commodities (and hence the same amount of Value) exists after the sales as before. Different price relations will therefore give rise to different distributions of the total commodity-product, and of the total sum of Values, but they cannot by themselves change these totals. It is on this basis that Marx argues: <blockquote>If commodities are sold at their values, then the magnitude of value in the hands of the buyer and seller remains unchanged. Only the form of existence of value is changed. If the commodities are not sold at their values, then the sum of converted values remains unchanged; the plus on one side is a minus on the other. (Marx, ''Capital'', Volume II, Ch. VI, Section 1.1, p. 129) </blockquote>

=== 7. The Importance of Prices ===
In commodity producing societies the object of production is not direct use, but personal gain through exchange. Individuals produce without any apparent social regulation. Nonetheless, they too exist within a social structure. For each individual to be able to specialize in producing for exchange, others must do so too; for exchange to proceed without rupture, the various products must correspond to the various social needs. Since under this form of social organization the correspondence between the various social needs and the distribution of social labor required to satisfy these needs cannot be brought about directly, it must be done indirectly. What in other societies is a direct evaluation of the importance of a particular type of labor in terms of its concrete product, becomes in commodity producing societies the indirect evaluation of this labor—through the "quantitative worth" of its product. It is only in exchange that the true social nature of commodity production is made apparent; and precisely because commodity production is undertaken for personal gain, for the money which is to be made, ''it is the money-prices of commodities that serve as the immediate regulating mechanism of the system''. Far from being a "veil", money constitutes a very important feedback mechanism.

It follows from the above that the laws which determine money magnitudes such as prices, profits, and wages, are of the utmost importance in understanding the laws of motion in capitalism.<ref group="FN ">The problem that Marx set himself in Capital was to "lay bare the economic law of motion of modern society". [EN 23] But why this task? Because he knew only too well that in order to change the world it is necessary to first understand it. In particular, he knew that without an adequate understanding of how the capitalist system operates, of the manner in which its underlying contradictions give rise to the phenomena of regular and violent crises, of increasing wealth alongside increasing misery, of rising productivity which leads to falling profitability, and many others—without an adequate understanding of these laws of capitalism, attempts to change it would be doomed to failure.</ref><ref group="EN">Marx, ''Capital'', Vol. I, "Preface to the First German Edition", p. 10.</ref>

Now of course it was known well before Marx's time that supply and demand were the immediate determinants of actual market phenomena. But even classical political economy was aware that over the course of time the ceaselessly fluctuating interplay of supply and demand was itself regulated by a much more fundamental principle: the Law of Equal Profitability.

For instance, if as a result of market conditions a particular sector's rate of profit rose above the average rate, then the flow of capital would tend to be biased towards that sector, causing it to grow more rapidly than demand, and driving down its market price to a level consistent with average profitability. Conversely, the sectors with low profitability would tend to grow less rapidly than demand, causing their prices and profitability to rise.

The classical economists were thus able to demonstrate that behind the continuously varying constellation of market prices there lay another set of prices, acting as "centers of gravity" of market prices and embodying more or less equal rates of profit. The name given to these regulating prices in classical political economy was natural prices; Marx calls them prices of production. Their discovery was the first great law of prices.

By David Ricardo's time, the problem had moved on to a higher level. What Ricardo sought to do, for instance, was to go one step further and look behind prices of production themselves, to discover ''their'' "centers of gravity". That is, just as the market price of a commodity was shown to be regulated by its price of production, Ricardo sought to show that this regulating price was itself subject to a hidden regulator—the total quantity of labor time required to produce the commodity, both in its direct production and in the production of its means of production. <blockquote>In speaking... of the exchangeable value of commodities, or the power of purchasing possessed by any one commodity, I mean always that power which... is natural price. (D. Ricardo, 1962, p.92)

The great cause of the variation in the relative value of commodities is the increase or diminution in the quantity of labour required to produce them. (''Ibid''., p. 36) </blockquote>There we have it: the ''great'' cause of the variations in the (relative) price of production of a commodity is the variations in the total labor time that goes, directly or indirectly, into its production. The total quantity of labor time was the center of gravity of the commodity's price of production, just as this price of production was itself the center of gravity of its market price. This was Ricardo's attempt to formulate a second great law of prices.

What Ricardo perceived was that there was an intrinsic connection between the "quantitative worth", the exchange-value, of commodities, and the total labor-time required for their production.<ref group="EN">Marx, ''Theories of Surplus-Value'', Part I, pp. 164-167.</ref> This, according to Marx, was Ricardo's great scientific merit.<ref group="EN">''Ibid''., p. 166.</ref> But at the same time Ricardo was trapped by the conceptual framework of bourgeois political economy, which saw all production as being alike. He was consequently unable to distinguish concrete labor, an aspect of all social production, from abstract labor, an aspect which only commodity producing labor takes on. Ricardo therefore misses the difference between Value and the form of Value. Instead of recognizing price as the manner in which the exchange process reflects Value, and developing the various intermediary links between the two, he attempts instead to fuse them together through his law of prices. His failure to adequately distinguish between Value and price is, according to Marx, the first great source of error in his analysis.<ref group="EN">''Ibid''., Ch. X, Section A. See also pp. 106, 164, 174-176.</ref>

In addition to that, however, there is another problem. How can Ricardo attempt to analyze the effects of a uniform rate of profit on prices, asks Marx, when he nowhere discusses what determines the ''level'' of this rate of profit? And this in turn leads to an even more basic question. A uniform rate of profit is simply a way of saying that profits on different capitals are proportional to the size of these capitals: that is, each capital gets a share of total profit in proportion to its own size. But Ricardo nowhere discusses what determines aggregate profit in the first place. How then can he attempt to isolate the factors which regulate the movements of prices of production when he is missing a crucial ingredient—profit?

It is therefore apparent to Marx that even given the relation between Value and money price which he himself derives,<ref group="EN">In ''A Contribution to the Critique of Political Economy'' [7], Marx begins by assuming that commodities exchange at Values, and then poses a series of objections to this assumption as a challenge to his own beginning. Of these, the "last and apparently the decisive objection" has to do with the fact that commodities with no Value can possess exchange-value. This problem, he says, "is solved in the theory of rent". (pp. 61-63)</ref> the specific manner in which Value regulates price cannot be developed without first showing how profit arises. And this, as we shall see next, leads Marx to the concept of surplus-Value.

== III. Surplus-Value and Profit ==

=== 1. The Circulation of Money and the Circulation of Capital ===
We have up to now focused on the relationship of the circulation of commodities to their production; on the basis of this we were able to derive the categories of Value, money, and price, and discuss their mutual interrelationship. But the very existence of the circulation of commodities within a capitalist mode of production immediately implies that, for those who function as capitalists, the process of circulation is itself a means to realizing a profit: where then does the profit of the capitalist class as a ''whole'' come from?

Marx begins by noting that once we consider commodity production within the context of capitalist production, the overall process of circulation is in reality two different processes with different functions and hence different laws. In the first process, the owners of commodities (<math display="inline">CC</math>) exchange them for money (<math display="inline">M</math>) in order to be able to use this money to buy other commodities (<math display="inline">CC</math>) for the purpose of consumption.<ref group="FN ">Marx uses the symbol C to represent commodities (as in M->C->M') and also to represent constant capital (as in C + V). In order to avoid any possible misunderstanding, I will use "CC" for the former and "C" for the latter.</ref> This circuit in the overall circulation process therefore has the form <math display="inline">CC \rightarrow M \rightarrow CC</math>, and is the aggregate of the exchanges of one set of commodities for what is, under the existing conditions of exchange, an equivalent set. In this process money is an intermediary between two sets of commodities; once acquired it is spent, and for the individuals involved in it, the process terminates in consumption. Marx calls this "selling in order to buy";<ref group="EN">Marx, ''Capital'', Vol. I, Ch. IV, p. 147.</ref> in it, money functions as money only.

In the second circuit, however, the owners of money (<math display="inline">M</math>) exchange it for commodities (<math display="inline">CC</math>) in order to get more money (<math display="inline">M' = M + \Delta M</math>), i.e., in order to make a profit <math display="inline">\Delta M</math>. Money here is not spent, it is merely ''advanced'' in order to make more money, through the intervention of commodities. The process of <math display="inline">M \rightarrow CC \rightarrow M'</math>, tends to be self-perpetuating, since it can always lead into <math display="inline">M' \rightarrow CC \rightarrow M''</math>, etc. The initiators of this process function as capitalists: <math>M \rightarrow CC \rightarrow M'</math> "is therefore in reality the general formula of capital as it appears ''prima facie'' within the sphere of circulation".<ref group="EN">''Ibid'', p. 155.</ref> Marx calls this second process "buying in order to sell";<ref group="EN">''Ibid''., p. 147.</ref> in it, money functions as ''capital''. It makes a profit. But how is it possible to make money by merely advancing money?

=== 2. Surplus-Value ===
The first step in the solution to the problem of profit is to recognize that it is not simply a question of money. Money, after all, represents a command over actual commodities, and hence over the actual labor-time materialized in them. If therefore in the circuit <math display="inline">M \rightarrow CC \rightarrow M + \Delta M </math>, the profit of the capitalist class (<math display="inline">\Delta M </math>) is to be something more than a monetary illusion, if it is to represent a potential increment in their real wealth, then ''their money profit <math display="inline">\Delta M </math> must itself be matched by an actual increment in the commodities available, and hence in materialized labor-time''. That is, <math display="inline">\Delta M </math> must be matched by an increment in the total Value of the commodities represented by <math display="inline">CC </math>. This increment in Value necessary for any real profit, Marx calls surplus-Value.

=== 3. Constant Capital ===
Ostensibly, the process of the formation of capital, as represented by <math display="inline">M \rightarrow CC \rightarrow M'</math>, is a process occurring wholly within circulation. But Value is itself a result of production; it cannot be created in circulation, and hence neither can the necessary increment in Value, surplus-Value. Surplus-Value, if it is possible at all, can only arise from production. And indeed, if we examine <math display="inline">M \rightarrow CC \rightarrow M'</math> more carefully, we find that the first stage involves the purchase of human and nonhuman inputs required for production, whereas the final stage involves the sale of the outputs of production. The commodities purchased as inputs and the commodities sold as outputs are in fact not the same, and it is the intervention of ''production'' which distinguishes them. The formation of capital, which appears to exist solely within circulation, in reality encompasses a process of production; properly speaking, it should be represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, with the stage <math display="inline">CC ... P ... CC' </math> representing the effect of production. Not just production or even just commodity production but, as we shall see, capitalist commodity production.

Means of production and laborers combine in all production. But in commodity production, the means of production are themselves commodities, and as such represent, in their total Value, the quantity of abstract labor-time that was socially necessary for their own production. If we examine the process of production over a period of time sufficiently long so that even the most durable means of production are entirely used up, then it becomes clear that the Value of the means of production must become incorporated into the commodities produced over this period. The bodily forms of the means of production either wear out (as with machines) or are physically incorporated into the product (as with raw materials); but precisely because these means of production are socially necessary under existing conditions, the abstract labor-time represented by them is also (indirectly) socially necessary for the production of the commodities. It is a necessary component of the total Value of the product. From the point of view of Value, therefore, the means of production only contribute as much Value as they actually contain. As such they cannot be the source of the increment in Value upon which any nonillusory aggregate profit must be based; Marx therefore calls the capital advanced in the form of the means of production "constant capital".

=== 4. The Value of Labor-Power ===
The formation of capital, the process represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, presupposes not just commodity production but capitalist commodity production. And under capitalist commodity production, not only are the products of labor bought and sold as commodities, but so too is the very capacity-to-labor itself.

This capacity-to-labor, which Marx calls labor-power, is "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description".<ref group="EN">''Ibid''., Ch. VI, p. 167.</ref> In all societies, it is the basis of the productive activities of human beings; but for this fundamental human property to become a thing to be bought and sold, a commodity, it must exist within a specific social context. Not only must the laborer have the legal title to his labor-power, he must also be obliged to sell it and not other commodities. He must be free not only to dispose of his own labor-power as a commodity, but also "free" of the means of production which might enable him to be a producer of other commodities. He must be a wage-laborer.

The Value of the commodity labor-power, like that of every other commodity, is determined by the abstract labor-time socially necessary for its production under existing conditions. Since labor-power is a capacity of living beings, its production implies their continued maintenance and reproduction; hence it implies a given quantity of commodities as means of subsistence, sufficient not only to maintain laborers in their normal state as laborers but also sufficient to support their families so that they may as a class continue to perpetuate themselves.<ref group="FN ">As in the case of every other commodity, the value of labor-power is given by the average labor-time required to produce the average quantity of means of subsistence of the average labor-power, under existing conditions. But for simple, unskilled labor-power, these existing conditions are themselves "the product of historical development, and depend therefore to a great extent on the degree of civilization of a country... In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known". (Marx, ''Capital'', Vol. 1, Ch. VI, p. 171).

The issue of skills requires further treatment which cannot be undertaken here. See instead Shaikh [19], Rowthorn [16].</ref> The Value of the means of subsistence of the total workforce is therefore the abstract labor-time socially necessary for their maintenance and reproduction, and hence is the measure of the Value of their labor-power (<math display="inline">V</math>).

When a capitalist purchases the commodity labor-power, he purchases the capacity-to-labor of workers, and in order to utilize this commodity he must extract as much labor-time from these workers as he can. The concrete functions that workers perform in their productive activities involves the transformation of the means of production into specific commodities; as such, the time spent by workers in these activities is itself a quantity of socially necessary abstract labor-time (<math display="inline">L</math>), which is in effect incorporated into the commodities. From the social perspective of Value, therefore, workers add a quantity of Value (<math display="inline">L</math>) to the Value (<math display="inline">C</math>) contained in the means of production they use up.

=== 5. Surplus Labor-Time ===
Capitalist production begins with the commodities <math display="inline">CC</math>, means of production and labor-power; as commodities they represent a definite quantity of Value, <math display="inline">C+V</math>. In a period of time sufficiently long, the entire Value <math display="inline">C</math> of the means of production will be ''transferred'' to the product. On the other hand, the Value <math display="inline">V</math> of labor-power employed in this period is ''replaced'' with the Value added to <math display="inline">L</math> by workers in the form of the amount of labor-time they actually spend in production. Thus while the Value of the initial commodities is <math display="inline">C + V</math>, the Value of the final product is <math display="inline">C + L</math>. The formation of capital, which we have represented as <math display="inline">M \rightarrow CC ... P ... CC \rightarrow M + \Delta M </math>, can therefore also be represented by <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M + \Delta M</math>. Clearly, ''surplus-Value, the Value increment <math display="inline">S =(C+L)=(C+V)=L-V</math> which is necessary to match the money increment <math display="inline">\Delta M</math> can arise if and only if the labor-time (<math display="inline">L</math>) put in by workers is greater than the labor-time (<math display="inline">V</math>) socially necessary for their reproduction''.

The same result can be derived differently. Imagine for a moment that at any given level of technology, workers in all branches of production work just long enough to produce the commodities necessary for the needs of the working class as a whole and to replace the means of production they use up in this process. Under these circumstances, no matter how "advanced" the technology, there can exist no social surplus, and hence no basis for capitalist profit. If, and only if, workers can and actually do work longer than the time necessary to maintain themselves and the means of production, will there arise a continuing social surplus; the time spent by workers in producing this surplus, their surplus labor-time, is therefore the real basis of capitalist profit. And of course since the necessary labor-time described above is none other than the aggregate value of labor-power <math display="inline">V</math>, the surplus labor-time is none other than aggregate surplus-Value <math display="inline">S</math>.<ref group="EN">If workers work only long enough to produce their means of subsistence and the commodities necessary to replace the means of production used up, then the only final (net) outputs of the system are the means of subsistence. As such the total time put in by workers is the time directly required to produce the means of subsistence, plus the time directly required to replace the means of production used up in producing these means of subsistence. But the latter time is also the time indirectly required to produce the means of subsistence: hence the total time they work is the sum of the direct and indirect labor-time necessary to produce the means of subsistence—which of course is by definition the (labor) Value of these commodities, and hence the (labor) Value of the labor-power which is reproduced through their consumption.

Similarly, any surplus labor-time they work over and above this necessary labor-time is the labor Value of the surplus-product, surplus-Value.</ref> Once again we see that surplus-Value is the "hidden basis" of any real capitalist profit.

None of this, by the way, implies that Marx intended the labor theory of value as a theory of property rights, ''à la'' Locke or even Proudhon. Marx's goal was a scientific analysis of capitalism, not a mere moral critique.<ref group="EN">See Meek's discussion of this (false) issue in [12], pp. 215-225.</ref>

== IV. The Transformation from Direct Prices to Prices of Production ==

=== 1. Exchange at Values: Direct Prices ===
In the Marxist conception of exchange-as-the-circulation-of-commodities, the total labor-time materialized in commodities during their production is the basis for their exchange-value and money-price, while the surplus labor-time materialized in them is the basis of the capitalist profit to be realized from their sale. Without a proper understanding of the quantitative and qualitative relationships between the sphere of production and the sphere of circulation, of the ''limits'' imposed on circulation by production, the laws of circulation must remain a mystery. Neoclassical economics is a testament to this.

For Marx, it was absolutely critical that the dominance of production over circulation be properly understood. It is in production that capitalist wealth is created and expanded, and Value and surplus-Value are materialized in commodities. Circulation, as we have seen, is the process whereby the previously created use-values are transferred from one hand to another, by means of money-prices.

Two things follow from this. First of all, it is in circulation that the Value magnitudes take their money-forms: Value takes the form of money-price, surplus-Value the form of money-profit; and secondly, neither Value nor surplus-Value are created in circulation, precisely because in this process commodities are merely exchanged, not created. This means that regardless of the actual money-prices involved, there can be no ''real'' increase in capitalist wealth through circulation.

It is obvious that the most direct way to explore the production and expansion of capitalist wealth is to assume that exchange takes place in proportion to the Values of commodities, so that the money-price of every commodity is equal to its Value relative to the Value of the unit of money (say one ounce of gold). I will henceforth call prices so determined "''direct prices''".

When indeed the analysis is begun this way, as Marx does in Volumes I and II of ''Capital'', it becomes clear that none of the basic categories of capitalist circulation, the categories of capital and labor, money and price, and wages and profits, owe their existence to any ''deviations'' of relative prices from relative Values. <blockquote>The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents... the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not be interfered with by disturbing circumstances that have nothing to do with the process in question. (''Capital'', Vol. I, Ch. V, p. 166, text and footnote 1.)</blockquote>

=== 2. The Conceptual Basis for Prices of Production ===
There is yet another reason for beginning with direct prices (exchange at values): the major ''systematic'' deviation of relative prices from relative Values arises when commodities exchange at "prices of production". But prices of production are prices which reflect a general rate of profit; and a general rate of profit in turn presupposes the existence of profits. Prior to any question about the formation of a general rate, therefore, is the question about the source of profit.<ref group="EN">Marx, ''Capital'', Vol. III, Ch. IX, p. 157.</ref> This question leads Marx to surplus labor-time and hence to surplus-Value, and once again the analysis comes to Value.

The path from Value back to price of production involves two major steps. First, one must examine and understand prices and profits in general; this was done through the analysis of the relationship of production to circulation, and of the relationship of Value to money. Second, since prices of production must reflect a general rate of profit, one is led to an analysis of the formation of this general rate out of the individual rates of profit in each sector of production. We turn to this now.

Let us recall that the general process for the formation of capital could be written as <math display="inline">M \rightarrow C+ V ... P ... C+L \rightarrow M'</math>, where M is the money price of commodity inputs into production: the means of production having the Value <math display="inline">C</math> and labor-power having the Value <math display="inline">V</math>. <math display="inline">M'</math>, on the other hand, is the money price of the commodity outputs of production; their total Value is <math display="inline">C + L</math>. By definition, <math display="inline">S=L-V</math>.

In money terms, the general money rate of profit is <math display="inline">r = (M' - M)/M</math>, the aggregate profit <math display="inline">M'- M</math> divided by the capital advanced <math display="inline">M </math>. In terms of Value, the general ''Value'' rate of profit is <math display="inline">\rho = S/(C+V)</math>, the aggregate surplus-Value <math display="inline">S </math> divided by <math display="inline">C+V</math>, the Value of the inputs. Obviously, if prices are proportional to Values, then the general money rate of profit must equal the general Value rate of profit: <math display="inline">r = \rho </math>.

We now consider two individual circuits of capital involving sectors of production I and J, as represented by <math>M_i \rightarrow (C_i+ V_i) ... P ... C_i + L_i \rightarrow M'_i </math>; and <math display="inline">M_j \rightarrow (C_j+ V_j) ... P ... C_j + L_j \rightarrow M'_j </math>, respectively. If prices are proportional to Values, then in each sector the sectoral Value and money rates of profit are the same. We need therefore deal only with the Value rates <math>\rho_i = S_i/(C_i+V_i)</math> and <math display="inline">\rho_j = S_j/(C_j+V_j)</math>.

The first question we must then ask is: are these two Value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> generally equal? For ''if'' they were, then at prices proportional to Values each sector would have the same money and value rates of profit, and no movement of prices would be necessary to equalize the individual rates of profit. To facilitate the answer, Marx rewrites each expression for the value rate of profit by dividing both the numerator and denominator of each fraction by the Value of labor-power V:

<math display="block">\rho_i = \frac{S_i}{V_i} \bigg| \frac{C_i+V_i}{V_i} \qquad \text{and} \qquad \rho_j = \frac{S_j}{V_j} \bigg| \frac{C_j+V_j}{V_j}</math>

Each Value rate of profit is therefore itself the ratio of two component ratios: <math display="inline">S/V</math>, which Marx calls the rate of surplus-Value, and <math display="inline">(C + V)/V</math>, which he calls the organic composition of capital. We will deal with each in turn.

==== ''A. The Equality of Rates of Surplus-Value'' ====
For society as a whole in any given period, the productive activities of workers may be viewed as a certain aggregate quantity of labor-time <math display="inline">L</math>. But the very fact that the concrete labor-times of different workers can be added together requires that they have already in some way been made qualitatively equal, that they have been reduced to quantities of some ''general'' social labor-time, what Marx calls "abstract" labor-time. This reduction of concrete labor-times to abstract labor-time is of course a consequence of generalized commodity production, as discussed in the section on Value (II.4); for our purposes, what is important in this is that it implies that the labor-time of each worker represents a definite quantity of abstract labor-time.<ref group="EN">The product of each concrete labor-time has a definite quantity of Value—abstract or general labor-time—which is measured by the average quantity of labor-time required for the production of the average product of this type. As such, the actual quantity of labor time put in by a given worker, such as the hand-loom weaver of Footnote 13, counts only as the quantity of average value-added in the production of the average commodity.</ref>

Of the aggregate labor-time <math display="inline">L</math>, a certain portion <math display="inline">V</math> represents the time socially necessary for the production of the means of subsistence of the working class, and the remainder <math display="inline">S</math>, the aggregate surplus labor-time, constitutes the surplus-Value materialized in commodities during their production. If the working day is the same in all branches of production, then each worker adds the same amount of Value to the product, in a given time period (like a day). If the wage rate for a given type of work is the same in all branches, then each worker can purchase the same share of the aggregate means of subsistence; a uniform wage thus represents a given quantity of (abstract) labor-time (say 4 hours a day) which each worker must put in to reproduce the Value of his or her labor-power. Clearly, if the length of the working day (say 10 hours) is indeed the same in all branches, each worker will work the same amount of surplus labor-time (6 hours a day). That is, in each sector, the rates of surplus-Value will necessarily be equal. These rates, therefore, cannot be the source of any differences between the Value rates of profit <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math>.

==== ''B. The Inequality of Organic Compositions of Capital'' ====
The above results imply that in any one sector, say sector J, <math display="inline">V</math> is an index of the total quantity of labor-time <math display="inline">L</math> worked in that sector, since any one hour of abstract labor-time requires the fraction <math display="inline">v</math> for its reproduction: <math display="inline">V = vL</math>. The quantity <math display="inline">C</math>, the value of the means of production in this sector, is, on the other hand, an index of the specific types and quantities of commodities which enter into this process of production as means of production. In general, therefore, unless each sector employs the same types of commodities and labor-powers in the same proportions as every other sector, the ratios <math display="inline">C_i/L_i</math>; and <math display="inline">C_j/L_j</math> will differ. Since <math display="inline">V_i</math>; and <math display="inline">V_j</math> are indexes of <math display="inline">L_i</math> and <math>L_j</math>, in general the organic compositions <math display="inline">(C_i +V_i)/V_i</math>; and <math display="inline">(C_j + V_j)/V_j </math> will differ.

To reiterate Marx's conclusion: in general, the sectoral rates of surplus-value will be equal, but the organic compositions of capital will not. Hence in general the value rates of profit will differ from sector to sector.

==== ''C. The Deviation of Prices of Production from Direct Prices'' ====
Let us now return to the two circuits of capital <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math display="inline">M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>. We began earlier by noting that ''if'' prices were proportional to Values, the money rates of profit <math display="inline">r_i = (M'_i - M_i) / M_i </math> and <math display="inline">r_j = (M'_j - M_j) / M_j </math> would be equal to the corresponding Value rates of profit <math display="inline">\rho_i = S_i/(C_i + V_i)</math> and <math display="inline">\rho_j = S_j/(C_j + V_j)</math>. If in addition the Value rates of profit were themselves equal to each other, then at direct prices, capital in each circuit would realize the same ''money'' rate of profit and no movement of prices would be necessary to bring these money rates into line with the general rate.

We have just seen, however, that in general the sectoral rates will differ; if for instance <math display="inline">\rho_i</math> was greater than <math display="inline">\rho_j</math>, the capital invested in sector <math display="inline">I</math> would, with prices proportional to Values, earn a higher money rate of profit than would capital invested in industry <math display="inline">J </math> (<math display="inline">r_i = \rho_i > r_j = \rho_j </math>). ''To equalize these money rates, therefore, relative prices would have to deviate from relative values'' in such a way as to lower <math display="inline">M'_i</math> relative to <math display="inline">M_i</math> and to raise <math display="inline">M'_j</math> relative to <math display="inline">M_j</math>, for only in this way would the higher money rate of profit <math display="inline">r_i</math> be reduced and the lower money rate <math display="inline">r_j</math> be raised.

In any sector <math display="inline">K</math>, <math display="inline">M'_k</math>, represents the money price of the commodities produced, what I called earlier the sector's total price; <math display="inline">M_k</math>, on the other hand, is the money price of the sector's commodity inputs (means of production and labor-power), what Marx calls its (money) cost-price. Since both the total price <math display="inline">M'_k</math> and the cost-price <math display="inline">M_k</math>, are in essence determined by the prices of commodities, any movements of relative prices, including the ones under consideration here, will in general change both <math display="inline">M'_k</math>, and <math display="inline">M_k</math>: the overall price movements necessary for the formation of a general rate can therefore be quite complicated, as Sraffa has so elegantly demonstrated.<ref group="EN">Sraffa's initial point of reference is a set of prices which obtain when the rate of profit is zero. As is well known, in the simplest case relative prices are then proportional to relative Values. The subsequent movements of relative prices at alternate positive rates of profit which he then analyzes may be therefore viewed as the analysis of relative price-Value deviations at alternative levels of the rate of surplus-Value.</ref>

Nonetheless, beginning from prices proportional to Values, for any sector <math display="inline">I</math> whose Value rate of profit <math display="inline">\rho_i</math> is higher than the average Value rate <math display="inline">\rho</math>, its total price <math display="inline">M'_i</math> must fall relative to its cost-price <math display="inline">M_i</math>, in order to bring its money rate of profit <math display="inline">r_i</math> into line with the general money rate <math display="inline">r </math>. The opposite movement must take place for a Sector <math display="inline">J</math> whose Value rate of profit <math display="inline">\rho_j</math> is lower than the average Value rate <math display="inline">\rho</math>.

Since the differences in the value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> upon which these price movements are predicated are themselves a consequence of the differences between sectoral organic compositions of capital, one may equally well say that, beginning from prices proportional to Values, a sector's total price must fall (or rise) relative to its money cost-price according to whether its organic composition of capital is lower (or higher) than the social average, if its particular money rate of profit is to conform to the general rate.

It does not follow from the above, however, that the general ''money'' rate of profit will continue to equal the general ''Value'' rate of profit, once prices deviate from a strict proportionality with Values. To see why, let us recall that <math display="inline">M'</math>, the aggregate price of commodities, is the total price of the commodities which form the social product. On the other hand, the aggregate cost-price <math display="inline">M</math> is the total price of the commodities, the means of production and the labor-power, which form the inputs into the aggregate process of production. Since the price of labor-power is determined by the price of its means of subsistence the aggregate cost-price <math display="inline">M</math> is in effect the total price of the means of production and the means of subsistence.

Suppose the social product was 100 bushels corn and 100 tons iron. <math display="inline">M'</math> would be its total price. In general, the aggregate means of production and means of subsistence will also consist of quantities of one or both of these commodities, say 80 bushels corn and 60 tons iron. <math display="inline">M</math> would then be their total price. Because these two aggregate "bundles" of commodities will generally differ in their proportions of corn to iron, as is true of the case illustrated above, any movement in the price of corn relative to iron will affect them unequally. Hence ''any'' movement of relative prices will in general change the ratio <math display="inline">M'/M</math> or equivalently, the general rate of profit <math display="inline">r = [(M'-M)/M] = [(M'/M)-1] </math>.

The quantity <math display="inline">M'</math> is of course the sum of prices, while the quantity <math display="inline">\Delta M = M' - M </math> is aggregate money profit. The above result may therefore be stated in an equivalent form: in general, ''any deviations of relative prices from relative Values, including but not only'' those which arise from the formation of a general money rate of profit, ''will make it impossible for both the sum of money prices <math display="inline">M'</math> and the sum of money profits <math display="inline">\Delta M</math> to remain strictly proportional to the sum of Values'' <math display="inline">C + L</math> ''and the sum of surplus-Values'' <math display="inline">S</math>'', respectively''. This result is well known in the debate about the so-called transformation problem; but as it is stated above, it arises in a broader context. In any case, in order to discern its real content, we must examine matters a bit more carefully.

=== 3. Some General Effects of Price-Value Disproportionality ===
In much of the literature on the "transformation problem", there is a great confusion between Values, prices proportional to Values (what I call direct prices), and prices of production. In particular, since direct prices are so simply related to Values, the general issue of the differences between price and Value, and profit and surplus-Value, tends to be taken up only when we turn to prices of production. All of a sudden, we are confronted with the impossibility of a simple proportionality between Value magnitudes and their money-forms, and it begins to seem as if the analysis of Value is something quite separate from the analysis of price.<ref group="EN">A. Emmanuel [3] provides a modern example of a neo-Smithian theory of price, in which the "labor theory" of price is valid when there is only one class of recipients of the net product (laborers), and the theory of prices of production is valid when there are two classes of recipients: capitalists and workers (see Emmanuel, ''op. cit.'', Ch. 1, and Appendix V). This rejection of "labor" as a determinant of price has its roots in the confusion and difficulty surrounding the "transformation problem".</ref>

For this reason, I have attempted throughout this paper to carefully distinguish between Value, which stems from production, and money-price, which is the form taken by Value in circulation. With this distinction in hand, it is possible to see that money-magnitudes are ''always'' different, both qualitatively and quantitatively, from Value magnitudes. Marx notes, for instance, that precisely because the form of Value is not the same thing as Value, the determination of money-price is a ''complex combination'' of its Value elements.

Consider the simplest case, that of direct prices. Suppose the Value of a gold coin weighing 1/4 ounce (which we call a "£")<ref group="FN ">Originally a "£" represented a pound of silver. Hence the name. Over time, however, while the money-name "£" was retained, the silver or gold content decreased steadily. By Marx's time, a "£" represented roughly 1/3 of a pound of silver, or about 1/4 of an ounce of gold (Marx, ''Contribution to a Critique''..., Ch. II, Sec. 1, p. 72).</ref> is 1/2 worker-hour, while that of a bushel of wheat is 100 worker-hours. The direct price of wheat will then be £200. Even right here, Value (100 hours) and price (£200) are both qualitatively and quantitatively different (though related) magnitudes, with different units.

Now suppose the Value of wheat falls by half, to 50 worker-hours. How will this be reflected in its direct price? Well, says Marx, that depends; if the Value of gold also fell by a half, the money-price of wheat would remain constant at £200; if the Value of gold fell by more than a half, the money-price of wheat would rise even though its Value fell!<ref group="EN">See Marx, ''Capital'', Vol. I, Ch.3, Section 2b, pp. 53-54.</ref> Even in this simple case, therefore, the laws which determine the money-form of Value are more complex than those which determine Value itself. But this is hardly an analytical defect; on the contrary, it is the whole point of theoretical analysis to be able to derive more complex categories from basic ones.

If indeed price and Value are always distinct, what exactly is the "transformation" issue about? Clearly, it is about a ''transformation in the form-of-Value''; it is a transformation from the direct expression of Value (direct prices) o a more complex expression (prices of production). What we have to do, therefore, is to see what is altered by this change in form, and what is not.

We begin by noting that what we are considering here is a ''pure'' change of form. For instance, in the traditional formulation of the transformation we analyze a capitalist society in a simple or extended reproduction, first when exchange is ruled by direct prices, and then when it is ruled by prices of production.<ref group="FN ">See section IV.4 of this paper, which discusses the calculation of prices of production.</ref> In both cases, the composition and distribution of the use-values is the same: the same mass of commodities is circulated in either case, with the same physical composition of means of subsistence and surplus-product. Thus the same total commodity Value, the same aggregate Value of labor-power, and the same aggregate surplus-Value, is circulated by the two different price-forms. From the point of view of the system as a whole, the transformation leads to no real change; all that changes is the manner in which given production relations are manifested in circulation.

From the point of view of individual capitals, however, the situation is indeed different. With direct prices, each capitalist realizes an amount of money profit proportional to the surplus-Value contained in the commodities he sells. With prices of production, each sector's money profit is no longer proportional to its surplus-Value; since the sum of Values (and hence the total surplus-Value) circulated is still the same as before, the above change of form has the effect of redistributing surplus-Value from one sphere of production to another. <blockquote>The fact that prices diverge from [proportionality with] values cannot, however, exert any influence on the movements of social capital. On the whole, there is the same exchange of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by everyone of them. (Marx, ''Capital'', Volume II, Ch. XX, Section 1, p. 393)

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (Marx, ''Capital'', Volume II, Ch. II, p. 43) </blockquote>What has been said above in fact applies to any set of prices which differ from direct prices, not just to prices of production. What it shows is that there are limits to the effects of different forms of Value, and that these limits arise precisely in the Value magnitudes whose distribution is brought about through these money-forms.

It does not follow from this, however, that the determination of money-prices is of no consequence. Different forms of Value have different ''real'' effects on individual capitals, and these in turn have different implications for the dynamic process of accumulation and reproduction. It is through the actual movements of money-prices that the system is regulated; as such, the analysis of prices of production (which act as centers of gravity of market prices), and of their relation to Values, is of the utmost importance to concrete analysis. The first step (which in most discussions of the "transformation problem" is the ''only'' step) along this path is the derivation of prices of production from direct prices.

=== 4. The Calculation of Prices of Production ===
In general, we may characterize any two circuits of capital as <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math>M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>.

When exchange is at Values, the money rate of profit in each circuit will equal the Value rate of profit in that circuit. Since Value rates will in general differ from sector to sector, owing to differences in their organic compositions of capital, exchange at Values will imply unequal rates of profit in different sectors, and hence in different circuits of capital.

It follows from the above that the formation of a general rate of profit out of the various individual rates of profit will require that for a sector with a Value rate of profit higher than the social average, the money price of its product <math display="inline">M'_i </math> must fall relative to its money cost-price <math display="inline">M_i </math>, since only this movement will lower its money rate of profit <math display="inline">r_i </math>. As we saw earlier in section III.2.C, this ''must'' hold regardless of how complicated the effects of the formation of a general rate of profit on the overall pattern of prices. And as we shall see immediately, ''it is precisely this movement which is captured by Marx's own transformation procedure''.

==== ''A. Marx's Transformation Procedure'' ====
The example below illustrates the three basic circuits of capital in Marx's analysis: Circuit I represents the production of the means of production themselves, Circuit II the production of the means of subsistence of the working class, and Circuit III the production of the means of consumption of the capitalist class. The example itself, though from Bortkiewicz, not Marx, is used because it is the standard illustration of the so-called transformation "problem" and appears in most discussions of the issue.<ref group="CN">Esto ha sido una gran fuente de confusión...</ref>

Because we have throughout distinguished between Value and money-price and because the issue at hand centers on differences in their magnitudes, we must be careful with notation. As defined earlier, <math display="inline">C_i</math> will represent the value of the means of production of the <math display="inline">i </math>th department, <math display="inline">V_i</math> the value of the labor-power employed there, and <math display="inline">S_i=L_i-V_i </math> the surplus-value produced there; the total value <math display="inline">C_i + L_i</math> produced will be designated by <math display="inline">W_i </math>. In contrast, <math display="inline">MC_i </math> will represent constant capital, the money price of the means of production used in the department, and <math display="inline">M V_i </math> variable capital, the money price of the labor-power used there; as before, <math display="inline">M_i </math> will be the total cost-price and <math display="inline">M'_i </math> the total price of the product. All Value quantities will be in units of (abstract) labor-time, worker-hours, and all money quantities in £'s (1/4 ounce gold coins). It is also assumed that each £-coin has a Value of 1/2 worker-hour.

When exchange is at Values, we get the results shown in Table 1. It should be noted that the table has been designed to correspond to the whole circuit of capital, <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M'</math>, so that the phases of circulation are clearly distinguished from those of production.
{| class="wikitable"
|+Table 1 / Exchange at Values
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
! colspan="2" |<math display="inline">... (C+L) </math>
! colspan="2" |<math display="inline">\rightarrow M' </math>
|-
|
!Constant Capital (MCi)
!Variable Capital (MVi)
!Cost-price (Mi)
!Value of Means of Prod. (Ci)
!Value of Labor-Power (Vi)
!Surplus Value (Si)
!Total Value (Wi)
!Value Rate of Profit % (Pi)
!Total Price (M'i)
!Total Profit (ΔMi)
|-
|(Means of Production)
|450
|180
|630
|225
|90
|60
|375
|19.05
|750
|120
|-
|(Means of Subsistence)
|200
|240
|440
|100
|120
|80
|300
|36.36
|600
|160
|-
|(Capitalist Consumption)
|100
|180
|280
|50
|90
|60
|200
|42.85
|400
|120
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|
|£1750
|£400
|}
Marx's transformation procedure is simple: noting that in Table 1 the total cost-price <math display="inline">M </math> = £1350 (column 3) and the total money profit <math display="inline">\Delta M </math> = £400 (column 10), we get an average rate of profit on social capital of <math display="inline">r= 400/1350 = 29.63 \% </math>.

At existing prices, however, the capital in circuit I, invested in department I, would realize only a 19.05% rate of profit. Thus, in order to raise its money rate of profit to the average level, it must raise its money price. Since its money cost-price is £630, the "normal" profit that it would earn at the average rate of profit is 29.63% of £630, which is £186.67: the level to which it must raise its price therefore is given by <math display="inline">M'</math>= £630 + £186.67 = £816.67. Similarly, department II must lower its money-price to <math display="inline">M'</math>= £570.37, and department III must lower its to <math display="inline">M'</math>= £362.96 (see Table 2).
{| class="wikitable"
|+Table 2 / Max's Transformation
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
!<math display="inline">... (C+L) </math>
!<math display="inline">\rightarrow M' </math>
!
!
|-
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi'
!ΔMi
!ri
|-
|I
|450
|180
|630
|225
|90
|60
|375
|816.67
|186.67
|29.63
|-
|II
|200
|240
|440
|100
|120
|80
|300
|570.37
|130.37
|29.63
|-
|III
|100
|180
|280
|50
|90
|60
|200
|362.96
|82.96
|29.63
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|}
Table 2 illustrates Marx's transformation procedure. In it, the transformation ''per se'' refers to the movements of money-prices, ''not'' to changes in the Value flows. ''Moreover, the direction of movement of money prices'' <math display="inline">M'_i </math> ''to their corresponding cost-prices'' <math display="inline">M_i </math> ''is the correct one'': <math display="inline">M'_1 </math> rises relative to its cost-price, and <math display="inline">M'_2 </math> and <math display="inline">M'_3 </math> fall relative to theirs.

==== ''B. The "Correct" Prices of Production'' ====
From Bohm-Bawerk onwards, critics have argued that Marx's procedure was simply incorrect. They pointed out, for instance, that his transformation leaves the money prices of inputs (<math display="inline">MC_i</math>, <math display="inline">MV_i</math>) unchanged, whereas a thoroughgoing transformation would change these too. Marxists have countered these charges by claiming that, in any case, one can show the formal possibility of deriving prices of production from direct prices; in the Bortkiewicz method, for example, one can solve for a series of price multipliers which would enable one to transform the exchange-at-Values scheme of Table 1 to the "correct" exchange-at- prices-of-production scheme.<ref group="EN">Sweezy [21], Ch. V.</ref> Then, depending on whether one prefers the sum of prices or the sum of profits as constant, one can always "normalize" the multipliers derived from the Bortkiewicz method to make one or the other hold, for in general both cannot.

Even if the controversy about the appropriate "normalization", much of which arises from a confusion between Value and money-price, is satisfactorily resolved, the real problem with all of these foregoing transformation procedures remains: they effectively sever the link between Values and money-prices, or at least bury it in algebra, and are forced to reject Marx's own procedure as completely erroneous. Thus for instance in this example, the appropriate algebraic procedure would "jump" us from Table 1, representing exchange at Values, to Table 3 below, which portrays the "correct" price of production scheme under an (algebraically) arbitrary "normalization" which keeps the sum of money-prices (£1750) invariant to the transformation. In all of this, Marx's own trans- formation, as represented in Table 2, plays no role at all.
{| class="wikitable"
|+Table 3 / The "Correct" Prices of Production
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi
!Delta Mi
!ri
|-
|I
|504
|168
|672
|225
|90
|60
|375
|840
|168
|25%
|-
|II
|224
|224
|448
|100
|120
|80
|300
|560
|112
|25%
|-
|III
|112
|168
|280
|50
|90
|60
|200
|350
|70
|25%
|-
!Total
|£840
|£560
|£1400
|375
|300
|200
|875
|£1750
|£350
|
|}

==== ''C. Marx's Transformation Procedure Extended'' ====
Marx himself never goes beyond the transformation procedure he illustrates in Volume III of ''Capital''. And yet in several instances, he indicates clearly his awareness of the issue:<ref group="EN">In addition to the transformation discussion in Volume III of ''Capital'', see: ''Theories of Surplus Value'', Part III, Ch. XX, p. 82 and pp. 167-168.</ref> <blockquote>Aside from the fact that the price of a particular product... differs from its value... the same circumstance applies also to those commodities which form the constant part of (its) capital, and indirectly also its variable part, as the labourer's necessities of life... Under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations. (''Capital'', Vol. III, Ch. IX, p. 161.)

The foregoing statements have at any rate modified the original assumptions concerning the determination of the cost-price of commodities... Since the price of production may differ from the value of a commodity, it follows that the cost-price of a commodity containing this price of production of another commodity may also stand above or below that portion of its total value derived from the value of the means of production consumed by it. It is necessary to remember this modified significance of the cost-price, and to bear in mind that there is always the possibility of error if the cost-price of a commodity in any particular sphere is identified with the value of the means of production consumed by it. Our present analysis does not necessitate a closer examination of this point. (''Ibid.'', pp. 164-65.) </blockquote>To his critics, especially to those for whom only the ''calculation'' of prices of production has any significance, Marx's postponement of the "feedback" effects of the price-Value disproportionalities is an admission of failure—hence the so-called "great contradiction" between Volumes I and III.

But there is in fact a simple alternative: Let us extend Marx's procedure by progressively "feeding back" the effects of the initial price-Value disproportionalities and see what happens. Table 4 illustrates this extended procedure. In order to emphasize the fact that the transformation and its extension affect only money flows <math display="inline">M</math> and <math display="inline">M'</math>, and not the Value flows <math display="inline">(C + V) ... P ... (C+L)</math>, I have included both. This is somewhat tedious but it does make it clear that Value and surplus-Value are distinct from price and profit, a distinction which arises precisely from the difference between the spheres of production and circulation. But before we turn to this, we must first understand the logic involved.

We begin with exchange at Values (as was previously illustrated in Table 1). Let us now consider for a moment the real content of Marx's transformation procedure. If prices were actually proportional to Values, then rates of profit in each sector would differ from the social average. All other things being equal, either the competition of capitals or the threat of this competition would force the various sectors to adjust the prices of their products in such a way as to realize only the average rate of profit. In Department's II and III, for instance, which would have higher than average profit rates, either the threat of competition or else the actual inflow of capital would lower prices till only the average profit was obtained; in Department I, the reverse would take place.

In any real situation similar to the above, the actual adjustment process would involve changes in both the unit prices and the quantities sold; any actual inflow of capital would lower price through an expansion of supply; conversely, any lowering of price in response to the threat of competition would increase the amount sold.

But what we are interested in here is the pure change of form involved in the equalization of profit rates. And this, for a given mass of commodities, is an adjustment process ''which leaves the total sum of money prices unchanged'': since the cost-prices have already been incurred by the individual capitalist, the immediate burden of adjustment must fall upon current product prices, and their response in the face of capitalist competition is precisely to rise or fall till the individual rates of profit all equal the existing average rate. This simply means that the unit price of average commodity output is under no immediate compulsion to change, because in this case the rate of profit is the average rate. The average commodity, however, is only a microcosm of the total mass of commodities: the constancy of its price is therefore equivalent to the constancy of the total sum of prices.

Marx's transformation procedure is merely an application of the logic of this adjustment process. In Table 4, the initial situation under consideration in Step 1A is exchange at Values: the sum of prices is £1750, and the sum of profits is £400. Step 1B then illustrates Marx's own transformation, in which the immediate process of adjustment redistributes the given mass of surplus-Value (whose magnitude cannot of course be changed in circulation) by raising prices in Department I and lowering them in II and III. The sum of money prices remains unchanged at £1750, and in this instance the sum of money profits also remains at its previous level of £400.

Expressed in proportion to its previous price, which was its direct price, the change in the money-price of Department I is <math display="inline">\psi_1</math> = 816.67/750 = 1.089. Similarly, <math display="inline">\psi_2</math> = 0.951 and <math display="inline">\psi_3</math> = 0.907.
{| class="wikitable"
|+Table 4 / The Transformation from Direct Prices to Prices of Production<ref group="FN">The actual calculation was done to three significant digits after the decimal point. The numbers shown here are rounded off to two places. </ref>
|
|
! colspan="3" |
! colspan="6" |
!
!
|-
|
!Dept
!<math display="inline">MC_i</math>
!<math display="inline">MV_i</math>
!<math display="inline">M_i</math>
!<math display="inline">C_i</math>
!<math display="inline">V_i</math>
!<math display="inline">S_i</math>
!<math display="inline">W_i</math>
!<math display="inline">M'_i</math>
!<math display="inline">\Delta M_i</math>
!<math display="inline">r_i (\%)</math>
!<math display="inline">\psi_i</math>(Multiplier)<ref group="FN"><math>\psi_i = i^\text{th} \text{price multiplier} \equiv (i^\text{th} \text{price in current step} \div i^\text{th} \text{price in previous step}) </math></ref>
|-
! rowspan="4" |'''Step 1A'''Exchange at values
|I
|450
|180
|630
|225
|90
|60
|375
|750
|120
|19.05
| -
|-
|II
|200
|240
|440
|100
|120
|80
|300
|600
|160
|36.36
| -
|-
|III
|100
|180
|280
|50
|90
|60
|200
|400
|120
|42.85
| -
|-
|Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
! rowspan="4" |'''Step 1B'''Marx's transformation
|I
|“
|“
|“
|“
|“
|“
|“
|816.67
|186.66
|29.63
|1.089
|-
|II
|“
|“
|“
|“
|“
|“
|“
|570.38
|130.38
|“
|0.951
|-
|III
|“
|“
|“
|“
|“
|“
|“
|362.96
|82.96
|“
|0.907
|-
|Total
|“
|“
|“
|“
|“
|“
|“
|£1750
|£400
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
! rowspan="4" |Step 2A
Cost-prices adjusted to reflect prices of production of Step 1B
|I
|490.00
|171.12
|661.12
|“
|“
|“
|“
|816.67
|155.54
|
|“
|-
|II
|217.78
|228.14
|445.92
|“
|“
|“
|“
|570.38
|124.45
|
|“
|-
|III
|108.88
|171.12
|280.00
|“
|“
|“
|“
|362.96
|82.96
|
|“
|-
|Total
|£816.66
|£570.38
|£1387.04
|“
|“
|“
|“
|£1750
|£362.96
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
! rowspan="4" |Step 2B
Prices of production adjusted to equalize rates of profit in Step 2A
|I
|“
|“
|“
|“
|“
|“
|“
|834.12
|173.00
|26.17
|1.021
|-
|II
|“
|“
|“
|“
|“
|“
|“
|562.62
|116.70
|“
|0.986
|-
|III
|“
|“
|“
|“
|“
|“
|“
|353.26
|73.26
|“
|0.973
|-
|Total
|“
|“
|“
|“
|“
|“
|“
|£1750
|£362.96
|
|
|-
|<math display="inline">\vdots</math>
|
|
|
|
|
|
|
|
|
|
|
|<math display="inline">\vdots</math>
|-
! rowspan="4" |Final Step
"Correct" prices of production
|I
|504
|168
|672
|“
|“
|“
|“
|840
|168
|25
|1.
|-
|II
|224
|224
|448
|“
|“
|“
|“
|560
|112
|“
|1.
|-
|III
|112
|168
|280
|“
|“
|“
|“
|350
|70
|“
|1.
|-
|Total
|£840
|£560
|£1400
|“
|“
|“
|“
|£1750
|£350
|
|
|}
It is only in the next step, Step 2A, that we see the effect of the above deviations from direct prices on the cost-prices in each amount of capital. Since Department I produces the means of production for all departments, its price multiplier <math display="inline">\psi_1</math>= 1.089 will imply higher money prices (<math display="inline">MC_i</math>) for all means of production. Similarly, since Department II produces the means of subsistence, its price multiplier <math display="inline">\psi_2</math> = 0.951 implies a lowering of the money costs of labor- power (<math display="inline">MV_i</math>) in each amount. <math display="inline">\psi_3</math>, on the other hand, will not affect either component of cost-prices, since Department III produces only commodities for the consumption of capitalists.

Capitalists in each department will now have incurred new cost-prices differing from those in Step 1B. If they were to continue to sell their products at the prices of Step 1B their rates of profit would no longer be equal. This is the case illustrated in Step 2A. The overall effect of the preceding "feedbacks" is to raise the aggregate cost-price from £1350 to £1387.04. Since the sum of prices is unchanged, this results in a decrease of total money profit from £400 to £362.96.

Once again, therefore, capitalists in each sector would be compelled to adjust their individual money rates of profit to conform with the average rate, through the movements of their respective commodity-prices; once again, the average commodity, and hence the total mass of commodities, would be under no such compulsion, so that the total sum of prices would remain constant at £1750.

The resulting situation is depicted in Step 2B. Department I's price, compared to its previous level in Step 1B (and 2A), has risen again, this time by <math display="inline">\psi_1</math> = 834.12/816.67 .021, while those of II and III have fallen from their previous levels by <math display="inline">\psi_2</math> = 0.986 and <math display="inline">\psi_3</math> = 0.973. The pattern of transfer of surplus-Value has therefore been altered once again; moreover, in this case the money form of the mass of surplus-Value (i.e., total money profit) has been altered in magnitude. In the same way, the money rate of profit (26.17%) is no longer simply equal in magnitude to the value rate of profit (29.63%).

In each succeeding step, the procedure may be repeated until the changes from one step to another are negligibly small—and we find ourselves with the "correct" prices of production first illustrated in Table 3! This is not, as is usually the case, on the basis of an alternative to Marx's procedure of transformation, but rather on the basis of its successive application.

The procedure illustrated in Table 4 is quite general. The proof is left to Section VI of the mathematical appendix to this paper.

== V. Some further considerations ==
In the preceding discussion, four important points have emerged in connection with the so-called "transformation problem".

First of all, it is not a case of transforming ‘"Values into prices". Rather, it is a case of transforming one form-of-Value, direct prices, into another form, prices of production.

Secondly, the issue under consideration involves a pure change of form. As such, the transformation from direct prices to prices of production does not involve any ''real'' change for the system as a whole. The total mass of commodities, and the various portions of it going to each class, remain the same as before. By the same token, so do the sum of Values and sum of surplus-Values. What the transformation brings about is a different division of the total pool of surplus-Value among individual capitalists.

Third, the transformation procedure set out by Marx reflects the inherent nature of the process of the equalization of profit rates. This is a continuously occurring process, and in its pure form it acts by changing prices of individual commodities while leaving the sum of prices of a given mass of commodities intact. In addition, Marx's procedure can be extended in a simple way to derive the "correct" prices of production.

Lastly, in the case of the "correct" prices of production, the money rate of profit will deviate from the Value rate of profit. Like the deviations of prices of production from direct prices, however, the money and Value profit rate deviation is systematic and determinate. Though we do not prove it here, it can be shown that (under any given conditions of production), the money rate of profit will vary with the Value rate.<ref group="EN">It has been proved in various places that, under given conditions of production, arise in the rate of surplus-Value will increase the ''money'' rate of profit. Since it will also have the same effect on the ''Value'' rate of profit, it follows that the two move together (see, for instance, Medio [11], pp. 339-340; or Morishima (141, Ch. 6).</ref>

These connections by no means exhaust the possibilities. The relation between the mass of surplus-Value and its transformed money-form (total money profits under prices of production) still needs to be better specified.<ref group="CN">Mediante su procedimiento, Shaikh no logra mantener la invarianza "Masa de plusvalía = Masa de ganancia monetaria"; aunque si mantiene "Masa de valores = Masa de precios de producción" puesto que estos agregados no cambian durante su transformación</ref> So too does the relationship between individual prices of production and the corresponding Values.<ref group="CN">?</ref>

Perhaps the most important point to keep in mind is that the laws that Marx derives on the basis of this theory of Value cannot be derived from a theory which ''begins'' with prices of production. For instance, Marx's distinction between Value and money-price goes hand in hand with a corresponding differentiation between production and circulation. It consequently becomes necessary to distinguish between activities which produce commodities and those which circulate them, and eventually this difference develops in the more complex and powerful distinction between surplus-Value ''producing'' labor (what Marx calls "productive" labor) and all other types (which Marx relegates to the category of "unproductive" labor). Among other things, an increase in the proportion of unproductive labor (say advertising) to productive labor, for given level of total employment, would imply a smaller mass of surplus-Value to be shared out, and hence a smaller rate of profit. Such a conclusion has no parallel in orthodox theories of price.

Marx's analysis abounds with similar examples. His theory of money, for instance, is the direct opposite of the Quantity Theory.<ref group="EN">See Marx, ''Capital'', Vol. I, Ch. 3; or ''Contribution to the Critique of Political Economy'', Chapter 2.</ref> Similarly, his theory of the falling tendency of the rate of profit, and the theory of accumulation and crises which stems from it, receive their characteristic form from the distinction between constant and variable capital—precisely a distinction which makes no sense without the notion of Value.

All of this means that if Marx's economic analysis is to be developed, it must first be understood. Or else it must be abandoned altogether. The latter path is no doubt simpler, and certainly more consistent with orthodox economics. If the task is to understand the world in order to change it, then the adequacy of analysis, not its "acceptability", is all that matters. And on that basis, it seems to me that Marx's analysis is the most appropriate starting point.

== VI. Conclusions ==
It is the function of all scientific analysis to get beneath the surface of phenomena, to reduce their apparent movement to the real: "...all science would be superfluous if the outward appearance and the essence of things directly coincided".<ref group="EN">Marx, ''Capital'', Vol. III, Part III, Ch. XLVIII, p. 813.</ref>

The outward appearance of the sphere of circulation is one of freedom, equality, and choice: it is a world whose real inhabitants are inherently-equal-things, commodities, a world into which human beings enter only as representatives of these "natural" democrats: "It is an enchanted, perverted, topsy-turvy world, in which Monsieur le Capital and Madame la Terre do their ghost-walking as social characters and at the same time directly as mere things".<ref group="EN">''Ibid.'', p. 830.</ref>

To Marx, the great merit of classical economy was that it saw through, albeit incompletely, this "false appearance and illusion, this mutual independence and ossification of the various ''social'' elements of wealth, this personification of things and the conversion of production relations into entities, this religion of everyday life. It did so by reducing interest to a portion of profit and rent to the surplus above average profit, so that both of them converge in surplus-value; and by representing the process of circulation as a mere metamorphosis of forms, and finally reducing value and surplus-value of commodities to labour in the direct production process".<ref group="EN">''Ibid.'', p. 830. Emphasis added.</ref> In this way the classical economists were able to get beyond the simple conceptions generated by the outward appearance of capitalism, penetrating the disguise of circulation and seeing behind it the process of production. But they themselves were trapped by their inability to properly distinguish capitalist production from other historically determinate forms; by taking as given and eternal the concepts generated by the outward appearance of capitalist production, they remained "more or less in the grip of the world of illusion which their criticism had dissolved".<ref group="EN">''Ibid.'', p. 830.</ref>

The "world of illusion" Marx refers to represents the conceptions common to bourgeois thinkers; it covers not only the actual analysis of classical economists and of their targets, the vulgar economists, but also the conceptual framework within which they clash. Contained in their agreements and disagreements is an implicit philosophy, an implicit theory of history, an implicit anthropology, and so on.<ref group="EN">See Althusser’s discussion of this in [1], Ch. 2-4.</ref> Thus for Marx the critique of classical economy is at the same time a critique of its philosophy, its history, its anthropology. His analysis in ''Capital'' is necessarily predicated on all of these critiques; the vast distance between Marx and the classical economists, and hence between "value" in Marx and "value" in classical economy, can only be understood if one recognizes that in solving the problems of the classical economists Marx also breaks with the (often implicit) bases on which they had formulated their questions.

Insofar as the problems to be dealt with center largely on the magnitude of Value, as is often the case in this paper, the real difference between Marx and Ricardo, the difference in their methods, tends to be hidden. Marx's superior ability to solve Ricardo's problems, is, as he himself insists, due to his ability to transcend "the world of illusion" in whose grip Ricardo remains. This superior ability is therefore only a symptom of the real difference between Marx and the classicals. But to those who either explicitly or implicitly reduce Marx to Ricardo, this symptom becomes the real difference itself. Marx becomes a clever, if somewhat mystical, post-Ricardian.

The very same process of reduction often operates even further in the comparison of Marx to neoclassical analysis. Not only are Marx and Ricardo lumped together, but both are reduced to the one-dimensional world of neo-classical analysis. Here, the very conception of the problem to be analyzed is usually neoclassical; even those who reject the flatness of its theory are very often forced to fight their battles on its terms, and hence ''within'' its general framework.

The so-called transformation problem is a classic example of all this. As it is usually presented, the central issue is one of the ''calculation'' of static prices of production, and the major point of contention is the presence or absence of a relationship between Marx's transformation procedure and the "correct" one.

I have, as much as possible, attempted to avoid this trap. Certainly the issue of calculation is relevant; but the ''conception'' of that-which-is-to-be-calculated comes first, for in that conception lies the superiority of Marx's method. The early part of this paper therefore attempts to provide the basis of Marx's conception of prices in general, and prices of production in particular. In this way we are able to resolve many of the confusions surrounding the so-called "transformation problem", as well as being able to demonstrate that the "correct" prices of production can be calculated from values ''in the manner suggested by Marx's own transformation procedure''.

== Mathematical Appendix ==
Lack of space makes it impossible to include the mathematical appendix to this reading. However, [https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ a copy of the appendix] is available on request from the author of this reading.

== References ==

# L. Althusser and E. Balibar, ''Reading Capital'', translated from the French by Ben Brewster, Pantheon Books, (New York: Random House), 1970.
# W. Baumol, "The Transformation of Values: What Marx ‘Really' Meant (An Interpretation), ''Journal of Economic Literature'', March 1974, Vol. XII, No. 1.
# A. Emmanuel, ''Unequal Exchange: A Study of the Imperialism of Trade'' (New York: Monthly Review Press), 1972.
# T. Kuhn, ''The Structure of Scientific Revolutions'' (Chicago: University of Chicago Press), 1970.
# E.Mandel, "Value, Surplus Value, Profit, Prices of Production and Surplus Capital—A Reply to Geoff Hodgson", ''International Socialist Review'', Vol. 2, No. 1, Spring 1973.
# K. Lancaster, ''Mathematical Economics'' (New York: The Macmillan Company), 1968.
# Karl Marx, ''A Contribution to the Critique of Political Economy'', with an Introduction by Maurice Dobb (New York: International Publishers), 1970.
# —, ''Theory of Surplus Value: Volume IV of Capital'' (Moscow: Progress Publishers), Part I, 1969; Part II, 1968; Part III, 1971.
# —, ''Capital'', Volumes I-III (New York: International Publishers), 1967.
# —, "Comments on Adolph Wagner's ‘Lehrbuch der politischen Okonomie', 1879/80", published as ''Karl Marx on Value'', British and Irish Communist Organization, Belfast, 1971.
# A. Medio, "Profits and Surplus-Value: Appearance and Reality in Capitalist Production", published in ''A Critique of Economic Theory'', edited by E. K. Hunt and Jesse G. Schwartz (London: Penguin Books), 1972.
# R. Meek, ''Economics and Ideology and Other Essays'' (London: Chapman and Hall), 1967.
# M. Morishima and F. Seton, "Aggregation in Leontief Matrices and the Labour Theory of Value", ''Econometrica'', Vol. 29, 2 (April 1961), pp. 203-220.
# M. Morishima, ''Marx's Economics'' (Cambridge: Cambridge University Press), 1973
# J. Robinson, ''An Essay on Marxian Economics'', Second Edition (London: Macmillan; New York: St. Martin's Press), 1969.
# B. Rowthorn, "Skilled Labour in the Marxist System", ''Bulletin of the Conference of Socialist Economists'', Spring 1974, pp. 25-45.
# P. A. Samuelson, "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, Vol. IX, No. 2, pp- 399-431.
# F. Seton, "The ‘Transformation Problem'", ''Review of Economic Studies'', June 1957, 25, pp. 149-160.
# A. Shaikh, ''Theories of Value and Theories of Distribution'', Columbia University Ph.D., 1973 (unpublished).
# P. Sraffa, ''Production of Commodities by Means of Commodities'' (Cambridge: Cambridge University Press), 1960.
# P. M. Sweezy, ''The Theory of Capitalist Development'' (New York: Monthly Review Press), 1964.

== Endnotes [EN] ==
<references group="EN" />

== Footnotes [FN] ==
<references group="FN " />

== Critical Notes [CN] ==
By [[Comrade:Ismael|Comrade Ismael]]<references group="CN" />
[[Category:Works by Anwar Shaikh]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T20:10:55Z

Ismael:

<blockquote>''This article, a solution to a problem that has plagued a century of Marxian scholarship, was previously unpublished.''<ref group="CN">Shaikh presented a solution of the transformation problem initially in his doctoral thesis in 1973. Similar solutions were presented, independently from each other, by Morishima (1973) and Okishio (1974). In evaluating the three solutions, we find that Shaikh's (1973 and 1977) is conceptually by far richer than the other two, while the solutions by Morishima (1973) and Okishio (1974) are restricted mainly to the mathematical statements of the problem and the conditions required for the fulfillment of the two equalities. - Footnote taken from Tsoulfidis, L & Tsalikē, P (2019) ''Classical political economics and modern capitalism: theories of value, competition, trade and long cycles'', Springer, p. 99.</ref></blockquote>{{Library work|title=Marx's Theory of Value and the "Transformation Problem"|author=Anwar Shaikh|published_date=1977|pdf=https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ}}

== I. Introduction ==
It is curious that in the almost eighty years since the publication of Volume III of Marx's ''Capital'', a major theoretical problem, the infamous "transformation problem", has never been satisfactorily resolved. Throughout Volume I, written by Marx ''after'' he had already completed the first draft of Volume III, the analysis is based on the assumption that exchanges of commodities take place at prices proportional to their labor values. I will call these prices the "direct prices" of commodities. In Volume III, which was compiled by Engels from the incomplete first draft, after Marx's death, Marx extends his analysis to take into account "prices of production", demonstrating how one can derive these prices from the "direct prices" of Volume I. This derivation, from then on the center of an intense controversy, was the original "transformation procedure".

Opponents of the labor theory of value immediately seized on the apparent incompleteness of Marx's procedure. Bohm-Bawerk, for instance, questioned the tenability of Marx's statement that the sum of prices after the transformation would remain equal to the sum of values; others have pointed out that Marx's procedure contains an "error", because while he transforms the prices of outputs from "direct prices" to "prices of production", he leaves the inputs untransformed. Since commodities appearing as outputs of a productive system are often also inputs into the system, it is argued that Marx's procedure is logically flawed; "direct prices" and "prices of production" are two separate and unrelated phenomena, leading to a "great contradiction" between Volume I and Volume III of ''Capital''. More recently, essentially the same point has been made by Samuelson [17], in which he attacks the very idea of a transformation procedure: "Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila! You have completed your transformation algorithm".<ref group="EN">P. A. Samuelson [Bibliography Reference 17], p. 400.</ref> As we shall see. this criticism is completely incorrect, it is also somewhat misplaced; if anything, it applies most properly to the neoclassical "transformation procedure" which was the center of the so-called Cambridge Capital Controversies, a procedure in which Samuelson himself was quite prominent.<ref group="FN ">For a discussion of this debate as a neoclassical "transformation problem", see Shaikh [19].</ref>

On the Marxian side, there have been, of course, many "solutions" to the transformation problem, from Bortkiewicz's original transformation procedure and its subsequent variants to Francis Seton's important paper [18]. Unfortunately, as even supporters and sympathetic critics of the labor theory of value admit, these "solutions" all suffer from the same basic defects; they show "the possibility of a consistent derivation of prices from values"<ref group="EN">Meek, "Some Notes on the 'Transformation problem'", in Meek [12], p. 150.</ref> while apparently severing the crucial links between price and value magnitudes which Marx seemed to emphasize in his own procedure. In most discussions of the issue, these links have appeared in the form of the following equalities: of the "sum of prices" and the "sum of values"; of the magnitude of profits and the magnitude of surplus-value; of the profit-wage ratio and the rate of surplus- value; and of the general rate of profit in price terms and the same rate in value terms. As is well-known by now, in any "correct solution" either the first or the second, but not both, can be always made to hold, while in general the other two cannot. What then are we to make of Marx's procedure?

It has been suggested that Marx, having published Volume I in full confidence that the labor theory of value was the correct basis, discovered too late, in writing Volume III, that it was not. But that doesn't work, because we know that Volume I was published well after Volume III had been drafted. Others, perhaps more charitably, have suggested that because the labor theory of value as a theory of relative prices was so much a part of the tradition of classical economics, it was taken over by Marx almost unexamined. A variant of this line of reasoning, which is popular among some Marxists, is that if nowadays we view Marx-as-an-economist as a member of the classical school, it is we who import into Marx's theory of value, which is only nominally similar to that of Smith and Ricardo, the pre-Marxian question of the quantitative relationship between prices and values. In the variant, therefore, the lack of examination is on our part, not that of Marx. Marx was simply not terribly concerned with the quantitative relationship.<ref group="EN">See, for instance, Mandel [5], pp. 64-65. For a non-Marxist with a similar position, see Baumol [2].</ref>

To anyone who has read Marx's voluminous comments and critiques of the classical economists, notably in ''Theory of Surplus-Value'' and in ''Capital'', it becomes impossible to ascribe to Marx an unthinking take-over of a labor theory of value from anyone at all. Marx spends literally hundreds of pages discussing values and their relationship, both qualitative and quantitative, to wages, profits and prices; no aspect, no issue, is ignored in these incredibly detailed discussions. So the main line of that argument does not hold up. As for the variant, insofar as it argues that there is a vast difference between the "value" of Smith and Ricardo and the "value" of Marx, it is undeniably correct; where it goes wrong is in jumping from this important fact to the conclusion that Marx either does, or even could ignore the quantitative aspects which dominated the pre-Marxian "value theory".

Consider for a moment the fact that there is a vast difference between Einstein and Newton too, one which stems from different methodologies, different objects of analysis, etc., and extends all the way to differences in concepts and calculations. There is, in other words, what Thomas Kuhn calls a "paradigm break" between the two modes of analysis.<ref group="EN">Kuhn [4]. The term "paradigm break" is used figuratively here. The notion of a break between the problematic of classical economy and that of Marx, which Althusser [1] discusses, is considerably more precise.</ref>

The notion that Einstein and Newton, for instance, treat what appears to be some autonomously defined subject—"Physics"—is an illusion which is fostered by textbook propagandists whose very aim is to treat science as the glorious and lofty march towards "truth". In reality, however, almost every conception and calculation in Relativity Theory contradicts those of classical physics.

To reduce Einstein to a "tidied up" Newton would therefore be impossible. What is worse, this impossibility would show up in the form of "logical contradictions", "redundancies", and "irrationalities" in Einstein, not in Newton, for the propositions derived from the Theory of Relativity cannot be derived within a Newtonian basis. What can we say, for example, in a Newtonian framework about the fundamental Einsteinian notion that there exists a finite limit, the speed of light, for the velocity of any object? Only that it is clearly wrong, or at best, a notion we (as Newtonians) have no use for in our framework—one which therefore appears "mythical", "metaphysical", "irrelevant".

Insofar as some Marxists have pursued a similar line of argument as to the "reduction" of Marx to Ricardo, they have been making an absolutely crucial point: namely, that by attempting to "reduce" Marx to Ricardo, or to neoclassical economics, the impossibility of this reduction will manifest itself as a series of "contradictions" and "irrationalities" in Marx! What we think we find, on a Ricardian or neoclassical basis, is that Marx is simply incorrect, or at best gets involved in an "unnecessary muddle".<ref group="EN">J. Robinson [15], p. xi, and Ch. III, especially pp. 20-22.</ref> What we have in fact demonstrated is that you cannot derive Marx from Ricardo or Samuelson.

Obviously, none of this implies that Marx is above criticism. The point here is that in order to be able to evaluate Marx's solution to some problem, we must first of all define the problem. We must, in other words, ''locate'' the problem in terms of some general analysis, so that we may see which solutions are adequate and which are not. It has often been said that the hardest part of solving a problem is figuring out the question!

Some Marxists, however, jump from the implications of the difference between Marx and Ricardo to the false conclusion that Marx was, or at least that Marxists could be, unconcerned with the quantitative relationships between prices and values (whether he was and whether Marxist analysis could be are in fact two separate issues, but one leads to the other).

To begin with, the statement that Marx did not in fact consider these matters to be important runs headlong into the contrary evidence of the vast amount of attention Marx's writings give to them; the only way to get around this evidence in turn, is to try and show that the issue itself is irrelevant. In this way the real basis of this line of reasoning turns out to be the argument that Marxist analysis can, and should ignore the quantitative relationship. On the one hand, this argument gets much of its impetus from the persistent, and to some extent, damaging attacks on the "transformation from values to prices"; and on the other, it derives much of its appeal from a reaction against the obvious banality of neoclassical economics, in which relative prices figure so prominently. Nonetheless, the argument is simply untenable, for it is based on an ''unspoken'' conception about scientific analysis which when made explicit is quite unsupportable: namely, that as a science, the Marxist analysis of capitalism can simply choose to ignore the quantitative aspects of any phenomena, once it has understood the qualitative aspects. Marx himself had a higher opinion of his work:<blockquote>Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. (''Capital'',<ref group="FN ">All quotes from ''Capital'' refer to the International Publishers edition, New York, 1967.</ref> Volume III, Part I, Ch. I, p. 25) </blockquote>Unfortunately not many Marxists today seem willing to accompany Marx all the way in his arduous journey; and of those that do, even fewer appear to be interested in pulling together and extending, where necessary, the sometimes incomplete analysis of Volume III. The labyrinths of the turnover of capital in Volume II, the "petty detail" of the endless tables of differential rent in Volume III, and certainly the unending controversy about the "transformation problem" must all seem so very tedious, perhaps even dangerously confusing, to those who remain content to bask in the brilliance of Volume I.<ref group="EN">Marxists who attempt to directly apply the abstract categories of Volume I of ''Capital'' are in a sense reverting to a Ricardian methodology. Marx is careful to point out that a basic flaw in Ricardo's method is that he "jumps" directly from the abstract (value) to the concrete (prices of production, rent, taxes) without tracing the intermediate connections. (Marx, ''Theories of Surplus Value'', Part II, Ch. X, Sect. 4.6., p. 191.) It takes Marx three volumes to make that connection!</ref> But Marx at least did not find in the difficulty of a subject a sufficient reason for avoiding it: <blockquote>That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits. (''Capital'', Volume I, "Preface to the French Edition", p. 21) </blockquote>

== II. Value and Price ==

=== 1. Calculation versus Conception ===
I have, up to now, confined myself to a discussion of the so-called "transformation problem" and of various attitudes toward it. It is, however, a major purpose of this paper to demonstrate that one can, ''precisely in the manner set out by Marx'', calculate the "correct prices of production" from values. The link between the two, one so obvious that until recently it seems to have been completely overlooked,<ref group="FN ">The transformation procedure contained in this paper was first presented in a paper delivered to the Graduate Economics Department of Yale University, February 1973. A similar result was presented by Michio Morishima in "Marx in the Light of Modern Economic Theory: An Inaugural Lecture", London School of Economics, November 1973.</ref> is simply that while Marx's procedure is a perfectly general one, it is only the first step in an iterative transformation from "direct-prices" to "prices of production". But while this extension of Marx's procedure does falsify the so-called "impossibility theorems" on it (most recently voiced by Paul Samuelson), it by no means establishes the need for such a transformation in the first place. As has often been pointed out, "prices of production" can instead be calculated directly from the same "economic data" as "direct-prices". The difference between the two methods of calculation therefore lies not in the end point but in the beginning; that is, it lies not in the magnitude of "prices of production" but in their meaning, in their conception. To reduce the issue of the transformation to one of merely calculation, is simply to reduce Marx to neoclassical economics. And, as I pointed out earlier, the impossibility of such a reduction can only "show up" as a "redundancy" in ''Marx'': after all, if both methods arrive at the same end point, why bother with Marx's needless "detour" through values?

The question may be put more precisely: in what way is Marx's analysis of value different from that of orthodox economics? What sorts of issues, conceptions, and calculations are specific to it alone? What laws does Marx derive from it which cannot be derived from conventional economic analysis? Unless we make an attempt to answer these questions, any discussion of the "transformation" issue is quite irrelevant: without a proper understanding of the concept of value as it appears in Marx, it is pointless to try and analyze the so-called "transformation from values to prices of production". The discussion of the actual transformation algorithm is therefore postponed until Section III. In this section we must establish its ''raison d'etre''.

=== 2. Basic Method ===
<blockquote>Whatever the social form of production, labourers and means of production always remain elements of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another. (''Capital'', Vol. II, Ch. I, Section I, p. 34.)

The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers... which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. (''Capital'', Vol. III, Ch. XLVII, Section II, p. 791.) </blockquote>The preceding quotes present a crucial element of the Marxist approach to history: namely, that the specific manner in which production is organized, and surplus-labor extracted from the direct producers, forms the "hidden basis of the entire social structure". For Marx, it follows from this that the concepts adequate to the analysis of any specific historical epoch, including that of capitalism, must necessarily be based on these aspects of its social practice. The struggle for production is the fundamental social practice in all human society; hence the analysis of production is the beginning point of Marxist analysis. The extraction of surplus-labor is the basis of all class societies; hence its study is the source of the concepts adequate to an analysis of all class societies. ''Capital'' is Marx's application of this approach to the analysis of capitalism.

=== 3. The Production of Commodities ===
One very important aspect of the social process in which laborers and means of production are united in the ''capitalist'' mode of production, as opposed to all others, is that under the capitalist mode the overriding aim of production is not production-for-direct-social-use but production-for-exchange. In the caste system of India, for example, the social regulation of productive activity is made starkly visible by the existence of hereditary castes whose members can, and in fact must, perform only those concrete types of labor which are required of their caste. Production is, in this society, production-for-direct-social-use (whatever we may think of that use); distribution of the products of labor is similarly directly regulated.

But in capitalism, we have commodity production. What turns a product (something which is produced) into a commodity (something which is bought and sold) is a specific set of social structures which organize the productive activities (the labor) of society around production-for-exchange. In commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction. Society is organized in such a way that there is no ''direct'' social regulation of productivity activity: during production people act as individuals, relating only to their products; it is in exchange, therefore, that the true social nature of their existence is forcibly demonstrated to them through the relation of their commodities to those of others. Exchange, so to speak, is a "symptom" of commodity production, and its real limits can only be understood by relating exchange to its "hidden basis"—i.e., to production. It follows, therefore, that in a Marxist analysis the derivation of the categories of exchange, such as money and price, as well as their movements, must necessarily be based on the categories of production. Taken by itself, as an eternal category divorced from any particular type of production, exchange appears to be a smooth, static, inherently equilibrating process: witness the parables of neoclassical economics. Circulation is, to all appearances and purposes, the sphere of freedom, equality and equilibrium. But for Marx, circulation is precisely the sphere in which the contradictions inherent in the production of commodities are "both exposed and resolved";<ref group="EN">K. Marx, ''A Contribution to the Critique of Political Economy'', p. 86.</ref> the manner in which these contradictions in production dominate exchange, both qualitatively and quantitatively, is what Marx means by the law of value: "in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time necessary for their production forcibly asserts itself like an overriding law of Nature".<ref group="EN">Marx, ''Capital'', Vol. I, Ch. 1, p. 75.</ref>

=== 4. Exchange-Value and Value ===
In all production, concrete (i.e., specific) types of labor and concrete inputs result in a concrete product. Moreover, since the produced inputs themselves must be the products of past labor, we may say that in all production, including commodity production, concrete products are the results of concrete labors, in a given natural context.<ref group="EN">''Ibid''., p. 43.</ref> But commodity production (the production of goods-for-exchange) necessarily implies exchange; and in exchange the distinct qualities which give various commodities their "concreteness" are abstracted from. In exchange, what matters is not the physical properties of iron but how much wheat, or cloth, or coffee, etc., we can get for the iron; hence in exchange we treat every commodity not as a concrete bundle of distinctive qualities, but as the equivalent of specific ''quantities'' of all other commodities.

Precisely because exchange is a social process which quantitatively compares and equates different products, it is only in those societies which produce for exchange that the product of human labor acquires the property of "quantitative worth". In addition to being useful, they are now also "valuable": they are commodities.

We have to get a little more exact in our terminology at this point. In conventional usage (and with some classical economists), the term "value" sometimes refers to the notion of a useful object, and at other times to the notion of the "quantitative worth" of an object. In order to avoid confusion, therefore, Marx uses the term ''use-value'' to mean useful object, and the term ''exchange-value'' to mean the quantitative "worth" of an object. In Marx's terminology, therefore, a commodity is both a use-value and an exchange-value.

It is usually not difficult to explain what is meant by a useful object.<ref group="FN ">The apparent simplicity of the term useful object or use-value is misleading. Many Marxists, for instance, confuse it with physical object, i.e., a good as opposed to a service. This is definitely not the sense in which Marx uses the term use-value.</ref> But when we say that a commodity is "worth" something just what is implied? Suppose I say that in barter a bushel of corn is "worth" a ton of iron, and also a yard of silk, and an ounce of gold, and so on. At first glance, what I appear to be saying is that there are many different quantitative expressions for the "worth" of a bushel of corn, depending on which other commodity (iron, silk or gold) I choose to ''measure'' it by.

But there is a deeper problem here. In order for me to measure the "worth" of corn in terms of gold, for instance, gold must also be "worth" something itself. Otherwise I cannot say how much gold is equivalent to a bushel of corn. It is just like my saying that a stone "weighs" ten grams; what I mean is that on a scale it takes ten pieces of iron called gram-weights to equal the weight of the stone. But clearly, in order for me to carry out this operation, both stone and iron must already possess the property of being "heavy", of having "weight"; the gram-weights don't make stones "heavy", they only measure the already existing heaviness of stones.

Exactly the same conclusion applies to "quantitative worth". The factors which cause commodities to have "quantitative worth" in the first place must be carefully distinguished from the measurement of this "worth". Measuring the "worth" of corn in iron will give a different result from measuring it in gold; but neither measure causes corn to have "quantitative worth". Rather, each merely expresses the preexisting "worth" of corn in terms of some particular commodity.

The question of exchange-value ("quantitative worth") is therefore really a twofold one: first, what is the cause of "quantitative worth"; and second, how is this "worth" actually expressed, measured, in exchange?

If we look at society as a regularly reproduced set of social relations, it becomes very clear that the production and reproduction of the masses of useful objects which correspond to various social needs requires a definite, quantitative distribution of social labor. Each different useful product requires a concretely different type of labor; reproduction of the material basis of the society consequently requires the existence and reproduction of appropriate amounts of different concrete labors. That is to say, social labor from the point of view of its capacity to produce different use-values is what Marx calls social labor in its role as ''concrete'' labor.<ref group="EN">''Ibid''., p. 46.</ref>

A commodity, however, is more than a mere use-value; it is at the same time an exchange-value, an object possessing "quantitative worth". It follows from this that the very same social relations which endow use-values with the property of "quantitative worth", endow the labor which produces these use-values with the capacity to create "quantitative worth". From this point of view, all commodity producing labor is qualitatively alike and quantitatively comparable: it is what Marx calls "(commodity producing) social labor in its capacity as ''abstract'' labor".<ref group="EN">The distinction between concrete labor and abstract labor is similar to (though distinct from) the distinction between productive and unproductive labor. In both cases, the properties of Value and surplus-Value lie at the heart of the matter.</ref>

Therefore, to the question on the cause of exchange-value, Marx's answer is: abstract labor, i.e., <s>labor actually engaged in commodity production</s>,<ref group="CN">El trabajo abstracto no es "el trabajo efectivamente empleado en la producción de mercancías". En la producción de mercancías se emplea trabajo, y este a su vez tiene un ''carácter'' doble: abstracto y concreto. En la práctica, estos no pueden separarse puesto que ocurren en simultáneo y se implican mutuamente. </ref> is the cause of exchange-value.<ref group="EN">Marx [10].</ref> Moreover, if we consider the production of a commodity from the point of view of the whole society, it becomes apparent that the commodity's exchange-value represents the total amount of abstract labor-time socially necessary<ref group="EN">Marx uses the term "socially necessary labor-time" in two senses. First, the average quantity of abstract labor-time required to produce a single commodity; this determines the magnitude of its Value (''Capital'', Vol. I, Ch. I, p. 39). Second, the total quantity of labor-time which would be required to produce a given type of commodity in the amount consistent with effective demand; if the actual quantity of labor-time, and hence the actual amount of the product, deviates from the above necessary amount, the market-price of the commodity would deviate from its regulating price. (''Capital'', Vol. III, Ch. xxxvii, p. 635). The first sense of socially necessary relates the commodity to its conditions of production. The second sense relates the mass of commodities to the expressed social need for them.</ref> for its production, both directly (in the process of producing the commodity from its material inputs) and indirectly (in the process of producing the material inputs themselves, and the inputs of the inputs, and so on). Marx consequently refers to this total sum of abstract labor-time as the ''immanent measure'' of a commodity's exchange-value, what he calls its "Value".<ref group="EN">"... he [Adam Smith] confuses—as Ricardo also often does—labour, the intrinsic measure of value, with money, the external measure . .. (Marx, ''Theories of Surplus-Value'', Part II, Ch. xv, Section 2, p. 403).</ref>

The discerning reader will have noticed that I have capitalized the term Value. This is done in order to emphasize the distinctiveness of Marx's use of the term, and especially to avoid confusing it with the term "value" in orthodox economics (where it generally refers to a price of some sort).

It should also be noted here that the Value of a commodity is the ''average'' amount of abstract labor-time required for its production. The total output of a particular commodity represents<ref group="FN ">The term "represents" is used here rather than the more common term "embodied". It is clear in Marx, for instance, that it is not the historical cost of a commodity in labor-time, but rather its current cost of reproduction, which determines the magnitude of a commodity’s Value. (''Capital'', Vol. I, Ch. 1, p. 39). As such, it is not a question of the labor-time "embodied" in a commodity but of the social cost which the current production of the commodity entails.</ref> the expenditure of a certain amount of abstract labor-time which under existing conditions is required for its production. In exchange, however, all commodities of a given type are treated alike; each commodity is merely "an average sample of its class",<ref group="EN">Marx, ''Capital'', Vol. I, p. 39.</ref> and as such represents the average expenditure of abstract labor-time.<ref group="EN">The amount of labor-time socially necessary for the production of a commodity is determined by the average conditions of production of the average commodity. If the average conditions are altered, as in Marx's example of the introduction of power looms in weaving, then though existing cloth may have required more time than this new average, the magnitude of its value is still determined by the current average, precisely because all cloth of a given quality is treated alike in exchange. Similarly, if hand-loom weavers continue to hang on, then even though it may take them twice as long as the average to produce a bolt of cloth, the value of the cloth is nonetheless determined by the average. See Footnote 13 above, also.</ref>

In order to avoid confusion later on, I will distinguish between the ''sum of Values'' (the abstract labor-time required to produce the total social product<ref group="FN ">I refer here only to the total ''commodity'' product. Use-values produced for direct use are not treated here, in spite of their great importance in concrete analyses of actual capitalist societies. Marx himself distinguishes between social capital and social wealth "of which capital is only a part". (Marx, ''Capital'', Vol. I, Ch. X, p. 200).</ref>), the ''total Value'' of a given branch of production (the Value of its total output),<ref group="EN">The total social product is usually defined to include only the commodities newly produced in the given period of time. However, the existence of durable commodities implies that in any given period, commodities and inventories of unsold products may enter exchange as commodities even though they have not been produced in that period. In the treatment of fixed constant capital, for instance, this issue becomes important. Marx himself suggests in the treatment of fixed constant capital that the portion which is not used up in the process of production should be counted as part of the annual product (''Capital'', Vol. I, Ch. IX, p. 213). Properly speaking this treatment of fixed constant capital requires Marx's theory of rent, and for that reason is not developed in this particular paper. It should be noted, however, that a Marxian treatment of this issue will not be identical with the von Neumann-Sraffa "joint product" approach.</ref> and the ''unit Value'' of a single commodity (the average Value in the sense defined above). All terms are defined over a given period of time.

=== 5. Money and Price ===
We turn now to the second aspect of exchange-value: how is "quantitative worth" actually expressed in exchange? To this Marx answers: in exchange, the "quantitative worth" of a commodity ''must'' take the form of money-price. Since exchange is the interchange of two commodities, at first glance it seems obvious that there are as many measures of a commodity's worth as there are other commodities to measure it by. And historically, where exchange is sporadic or irregular, this is in fact true. But as exchange spreads and develops, this variety of different possible measures increasingly becomes a barrier to the smooth functioning of the process; without a point of reference, the direct comparison of every commodity with every other becomes impossibly complex. Consequently it becomes increasingly necessary to socially recognize a given commodity out of those available as the one commodity in which all others are to express their "worth"; this special commodity therefore becomes the universal equivalent, the money-commodity. We will henceforth assume it is gold.<ref group="FN ">It is beyond the scope of this paper to discuss the different forms of money such as token money (metallic and paper tokens of gold and silver) and credit money. In any case, this extension of the analysis cannot be attempted without first resolving it satisfactorily in the simplest case—that of pure gold-money.</ref>

Notice that money does not by itself cause commodities to have "worth", any more than gram-weights cause stones to have weight. On the contrary, it is only because both gold and the other commodities have "quantitative worth" (exchange-value) in the first place that we can express their worth of commodities in terms of gold. The money-price of a commodity is the "golden" reflection, the external measure, of its exchange-value. It is what Marx calls the ''form'' taken by Value during exchange.<ref group="EN">Marx, ''Capital'', Vol. I, pp. 47-48.</ref>

=== 6. Production and Circulation ===
The foregoing analysis has focused on the difference between Value and money-price. Implicit in this distinction, however, is another equally important one: the Marxian distinction between the production of commodities and their circulation.

Production, Marx notes, is the creation or transformation of a use-value.<ref group="EN">Marx, ''Capital'', Vol. I, Ch. VII, Section 1.</ref> Insofar as the product is a commodity, it belongs to some individual; it enters circulation, therefore, as private property.

Consider the case of two commodity producers, a fisherman and a hunter. They bring definite quantities of fish and game, respectively, to the market for the purpose of exchange; commodities with definite Values representing definite quantities of abstract labor-time thus enter the market-place.

Now what happens in exchange? In the exchange process the two commodity producers negotiate terms under which they will ''transfer the titles'' to their respective commodity property.<ref group="EN">Marx, ''Capital'', Vol. II, Ch. VI, Sect. I and Sect. III, p. 149.</ref> But note: the time they spend bargaining over these terms of trade will in no way increase the total amount of fish or game to be had; it will determine only the final pattern of distribution.<ref group="EN">''Ibid''., pp. 129-130.</ref> In fact, insofar as they need to subsist during the actual process of exchange itself, their...<blockquote>...costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third [person to perform] these exchanges, and thus lost no labour time directly, then each of them would have to cede a proportional share of his product to [that third person]...

Circulation costs as such, i.e. consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange..., are therefore a deduction either from the time employed on production, or from the values posited by production. ''They can never increase the value''. They belong among... the inherent costs of production resting on capital. (Marx, ''Grundrisse'', Notebook VI, pp. 632-633. Emphasis added) </blockquote>This is a very important point in Marx's analysis. The circulation process is the process whereby commodities change hands, where their titles of ownership are transferred. As such, no commodities and hence ''no Value is created in the circulation process''.<ref group="EN">''Ibid''., Ch. V, p. 127. Of course, the circulation process adds to the money price of a commodity. As long as Value and price are kept conceptually separate, this presents no problems at all.</ref> If anything, part of the previously produced mass of commodities (and hence the Value previously created in production) may be used up just in the struggle over its distribution.

One immediate implication of this is that the categories of circulation are thereby limited by those of production.<ref group="FN ">Another implication is that not all labor-time, even if it stems from wage labor employed by capitalists, leads to the creation of Value, This has been a perennial topic of discussion in Marxist literature under the heading of productive and unproductive labor. Though we cannot treat it here, it is important to note that it arises from the distinctive character of the Marxian concept of Value.</ref> Value is created in production, materialized in commodities; ''regardless of the actual money prices at which these commodities are sold'', only the same mass of commodities (and hence the same amount of Value) exists after the sales as before. Different price relations will therefore give rise to different distributions of the total commodity-product, and of the total sum of Values, but they cannot by themselves change these totals. It is on this basis that Marx argues: <blockquote>If commodities are sold at their values, then the magnitude of value in the hands of the buyer and seller remains unchanged. Only the form of existence of value is changed. If the commodities are not sold at their values, then the sum of converted values remains unchanged; the plus on one side is a minus on the other. (Marx, ''Capital'', Volume II, Ch. VI, Section 1.1, p. 129) </blockquote>

=== 7. The Importance of Prices ===
In commodity producing societies the object of production is not direct use, but personal gain through exchange. Individuals produce without any apparent social regulation. Nonetheless, they too exist within a social structure. For each individual to be able to specialize in producing for exchange, others must do so too; for exchange to proceed without rupture, the various products must correspond to the various social needs. Since under this form of social organization the correspondence between the various social needs and the distribution of social labor required to satisfy these needs cannot be brought about directly, it must be done indirectly. What in other societies is a direct evaluation of the importance of a particular type of labor in terms of its concrete product, becomes in commodity producing societies the indirect evaluation of this labor—through the "quantitative worth" of its product. It is only in exchange that the true social nature of commodity production is made apparent; and precisely because commodity production is undertaken for personal gain, for the money which is to be made, ''it is the money-prices of commodities that serve as the immediate regulating mechanism of the system''. Far from being a "veil", money constitutes a very important feedback mechanism.

It follows from the above that the laws which determine money magnitudes such as prices, profits, and wages, are of the utmost importance in understanding the laws of motion in capitalism.<ref group="FN ">The problem that Marx set himself in Capital was to "lay bare the economic law of motion of modern society". [EN 23] But why this task? Because he knew only too well that in order to change the world it is necessary to first understand it. In particular, he knew that without an adequate understanding of how the capitalist system operates, of the manner in which its underlying contradictions give rise to the phenomena of regular and violent crises, of increasing wealth alongside increasing misery, of rising productivity which leads to falling profitability, and many others—without an adequate understanding of these laws of capitalism, attempts to change it would be doomed to failure.</ref><ref group="EN">Marx, ''Capital'', Vol. I, "Preface to the First German Edition", p. 10.</ref>

Now of course it was known well before Marx's time that supply and demand were the immediate determinants of actual market phenomena. But even classical political economy was aware that over the course of time the ceaselessly fluctuating interplay of supply and demand was itself regulated by a much more fundamental principle: the Law of Equal Profitability.

For instance, if as a result of market conditions a particular sector's rate of profit rose above the average rate, then the flow of capital would tend to be biased towards that sector, causing it to grow more rapidly than demand, and driving down its market price to a level consistent with average profitability. Conversely, the sectors with low profitability would tend to grow less rapidly than demand, causing their prices and profitability to rise.

The classical economists were thus able to demonstrate that behind the continuously varying constellation of market prices there lay another set of prices, acting as "centers of gravity" of market prices and embodying more or less equal rates of profit. The name given to these regulating prices in classical political economy was natural prices; Marx calls them prices of production. Their discovery was the first great law of prices.

By David Ricardo's time, the problem had moved on to a higher level. What Ricardo sought to do, for instance, was to go one step further and look behind prices of production themselves, to discover ''their'' "centers of gravity". That is, just as the market price of a commodity was shown to be regulated by its price of production, Ricardo sought to show that this regulating price was itself subject to a hidden regulator—the total quantity of labor time required to produce the commodity, both in its direct production and in the production of its means of production. <blockquote>In speaking... of the exchangeable value of commodities, or the power of purchasing possessed by any one commodity, I mean always that power which... is natural price. (D. Ricardo, 1962, p.92)

The great cause of the variation in the relative value of commodities is the increase or diminution in the quantity of labour required to produce them. (''Ibid''., p. 36) </blockquote>There we have it: the ''great'' cause of the variations in the (relative) price of production of a commodity is the variations in the total labor time that goes, directly or indirectly, into its production. The total quantity of labor time was the center of gravity of the commodity's price of production, just as this price of production was itself the center of gravity of its market price. This was Ricardo's attempt to formulate a second great law of prices.

What Ricardo perceived was that there was an intrinsic connection between the "quantitative worth", the exchange-value, of commodities, and the total labor-time required for their production.<ref group="EN">Marx, ''Theories of Surplus-Value'', Part I, pp. 164-167.</ref> This, according to Marx, was Ricardo's great scientific merit.<ref group="EN">''Ibid''., p. 166.</ref> But at the same time Ricardo was trapped by the conceptual framework of bourgeois political economy, which saw all production as being alike. He was consequently unable to distinguish concrete labor, an aspect of all social production, from abstract labor, an aspect which only commodity producing labor takes on. Ricardo therefore misses the difference between Value and the form of Value. Instead of recognizing price as the manner in which the exchange process reflects Value, and developing the various intermediary links between the two, he attempts instead to fuse them together through his law of prices. His failure to adequately distinguish between Value and price is, according to Marx, the first great source of error in his analysis.<ref group="EN">''Ibid''., Ch. X, Section A. See also pp. 106, 164, 174-176.</ref>

In addition to that, however, there is another problem. How can Ricardo attempt to analyze the effects of a uniform rate of profit on prices, asks Marx, when he nowhere discusses what determines the ''level'' of this rate of profit? And this in turn leads to an even more basic question. A uniform rate of profit is simply a way of saying that profits on different capitals are proportional to the size of these capitals: that is, each capital gets a share of total profit in proportion to its own size. But Ricardo nowhere discusses what determines aggregate profit in the first place. How then can he attempt to isolate the factors which regulate the movements of prices of production when he is missing a crucial ingredient—profit?

It is therefore apparent to Marx that even given the relation between Value and money price which he himself derives,<ref group="EN">In ''A Contribution to the Critique of Political Economy'' [7], Marx begins by assuming that commodities exchange at Values, and then poses a series of objections to this assumption as a challenge to his own beginning. Of these, the "last and apparently the decisive objection" has to do with the fact that commodities with no Value can possess exchange-value. This problem, he says, "is solved in the theory of rent". (pp. 61-63)</ref> the specific manner in which Value regulates price cannot be developed without first showing how profit arises. And this, as we shall see next, leads Marx to the concept of surplus-Value.

== III. Surplus-Value and Profit ==

=== 1. The Circulation of Money and the Circulation of Capital ===
We have up to now focused on the relationship of the circulation of commodities to their production; on the basis of this we were able to derive the categories of Value, money, and price, and discuss their mutual interrelationship. But the very existence of the circulation of commodities within a capitalist mode of production immediately implies that, for those who function as capitalists, the process of circulation is itself a means to realizing a profit: where then does the profit of the capitalist class as a ''whole'' come from?

Marx begins by noting that once we consider commodity production within the context of capitalist production, the overall process of circulation is in reality two different processes with different functions and hence different laws. In the first process, the owners of commodities (<math display="inline">CC</math>) exchange them for money (<math display="inline">M</math>) in order to be able to use this money to buy other commodities (<math display="inline">CC</math>) for the purpose of consumption.<ref group="FN ">Marx uses the symbol C to represent commodities (as in M->C->M') and also to represent constant capital (as in C + V). In order to avoid any possible misunderstanding, I will use "CC" for the former and "C" for the latter.</ref> This circuit in the overall circulation process therefore has the form <math display="inline">CC \rightarrow M \rightarrow CC</math>, and is the aggregate of the exchanges of one set of commodities for what is, under the existing conditions of exchange, an equivalent set. In this process money is an intermediary between two sets of commodities; once acquired it is spent, and for the individuals involved in it, the process terminates in consumption. Marx calls this "selling in order to buy";<ref group="EN">Marx, ''Capital'', Vol. I, Ch. IV, p. 147.</ref> in it, money functions as money only.

In the second circuit, however, the owners of money (<math display="inline">M</math>) exchange it for commodities (<math display="inline">CC</math>) in order to get more money (<math display="inline">M' = M + \Delta M</math>), i.e., in order to make a profit <math display="inline">\Delta M</math>. Money here is not spent, it is merely ''advanced'' in order to make more money, through the intervention of commodities. The process of <math display="inline">M \rightarrow CC \rightarrow M'</math>, tends to be self-perpetuating, since it can always lead into <math display="inline">M' \rightarrow CC \rightarrow M''</math>, etc. The initiators of this process function as capitalists: <math>M \rightarrow CC \rightarrow M'</math> "is therefore in reality the general formula of capital as it appears ''prima facie'' within the sphere of circulation".<ref group="EN">''Ibid'', p. 155.</ref> Marx calls this second process "buying in order to sell";<ref group="EN">''Ibid''., p. 147.</ref> in it, money functions as ''capital''. It makes a profit. But how is it possible to make money by merely advancing money?

=== 2. Surplus-Value ===
The first step in the solution to the problem of profit is to recognize that it is not simply a question of money. Money, after all, represents a command over actual commodities, and hence over the actual labor-time materialized in them. If therefore in the circuit <math display="inline">M \rightarrow CC \rightarrow M + \Delta M </math>, the profit of the capitalist class (<math display="inline">\Delta M </math>) is to be something more than a monetary illusion, if it is to represent a potential increment in their real wealth, then ''their money profit <math display="inline">\Delta M </math> must itself be matched by an actual increment in the commodities available, and hence in materialized labor-time''. That is, <math display="inline">\Delta M </math> must be matched by an increment in the total Value of the commodities represented by <math display="inline">CC </math>. This increment in Value necessary for any real profit, Marx calls surplus-Value.

=== 3. Constant Capital ===
Ostensibly, the process of the formation of capital, as represented by <math display="inline">M \rightarrow CC \rightarrow M'</math>, is a process occurring wholly within circulation. But Value is itself a result of production; it cannot be created in circulation, and hence neither can the necessary increment in Value, surplus-Value. Surplus-Value, if it is possible at all, can only arise from production. And indeed, if we examine <math display="inline">M \rightarrow CC \rightarrow M'</math> more carefully, we find that the first stage involves the purchase of human and nonhuman inputs required for production, whereas the final stage involves the sale of the outputs of production. The commodities purchased as inputs and the commodities sold as outputs are in fact not the same, and it is the intervention of ''production'' which distinguishes them. The formation of capital, which appears to exist solely within circulation, in reality encompasses a process of production; properly speaking, it should be represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, with the stage <math display="inline">CC ... P ... CC' </math> representing the effect of production. Not just production or even just commodity production but, as we shall see, capitalist commodity production.

Means of production and laborers combine in all production. But in commodity production, the means of production are themselves commodities, and as such represent, in their total Value, the quantity of abstract labor-time that was socially necessary for their own production. If we examine the process of production over a period of time sufficiently long so that even the most durable means of production are entirely used up, then it becomes clear that the Value of the means of production must become incorporated into the commodities produced over this period. The bodily forms of the means of production either wear out (as with machines) or are physically incorporated into the product (as with raw materials); but precisely because these means of production are socially necessary under existing conditions, the abstract labor-time represented by them is also (indirectly) socially necessary for the production of the commodities. It is a necessary component of the total Value of the product. From the point of view of Value, therefore, the means of production only contribute as much Value as they actually contain. As such they cannot be the source of the increment in Value upon which any nonillusory aggregate profit must be based; Marx therefore calls the capital advanced in the form of the means of production "constant capital".

=== 4. The Value of Labor-Power ===
The formation of capital, the process represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, presupposes not just commodity production but capitalist commodity production. And under capitalist commodity production, not only are the products of labor bought and sold as commodities, but so too is the very capacity-to-labor itself.

This capacity-to-labor, which Marx calls labor-power, is "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description".<ref group="EN">''Ibid''., Ch. VI, p. 167.</ref> In all societies, it is the basis of the productive activities of human beings; but for this fundamental human property to become a thing to be bought and sold, a commodity, it must exist within a specific social context. Not only must the laborer have the legal title to his labor-power, he must also be obliged to sell it and not other commodities. He must be free not only to dispose of his own labor-power as a commodity, but also "free" of the means of production which might enable him to be a producer of other commodities. He must be a wage-laborer.

The Value of the commodity labor-power, like that of every other commodity, is determined by the abstract labor-time socially necessary for its production under existing conditions. Since labor-power is a capacity of living beings, its production implies their continued maintenance and reproduction; hence it implies a given quantity of commodities as means of subsistence, sufficient not only to maintain laborers in their normal state as laborers but also sufficient to support their families so that they may as a class continue to perpetuate themselves.<ref group="FN ">As in the case of every other commodity, the value of labor-power is given by the average labor-time required to produce the average quantity of means of subsistence of the average labor-power, under existing conditions. But for simple, unskilled labor-power, these existing conditions are themselves "the product of historical development, and depend therefore to a great extent on the degree of civilization of a country... In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known". (Marx, ''Capital'', Vol. 1, Ch. VI, p. 171).

The issue of skills requires further treatment which cannot be undertaken here. See instead Shaikh [19], Rowthorn [16].</ref> The Value of the means of subsistence of the total workforce is therefore the abstract labor-time socially necessary for their maintenance and reproduction, and hence is the measure of the Value of their labor-power (<math display="inline">V</math>).

When a capitalist purchases the commodity labor-power, he purchases the capacity-to-labor of workers, and in order to utilize this commodity he must extract as much labor-time from these workers as he can. The concrete functions that workers perform in their productive activities involves the transformation of the means of production into specific commodities; as such, the time spent by workers in these activities is itself a quantity of socially necessary abstract labor-time (<math display="inline">L</math>), which is in effect incorporated into the commodities. From the social perspective of Value, therefore, workers add a quantity of Value (<math display="inline">L</math>) to the Value (<math display="inline">C</math>) contained in the means of production they use up.

=== 5. Surplus Labor-Time ===
Capitalist production begins with the commodities <math display="inline">CC</math>, means of production and labor-power; as commodities they represent a definite quantity of Value, <math display="inline">C+V</math>. In a period of time sufficiently long, the entire Value <math display="inline">C</math> of the means of production will be ''transferred'' to the product. On the other hand, the Value <math display="inline">V</math> of labor-power employed in this period is ''replaced'' with the Value added to <math display="inline">L</math> by workers in the form of the amount of labor-time they actually spend in production. Thus while the Value of the initial commodities is <math display="inline">C + V</math>, the Value of the final product is <math display="inline">C + L</math>. The formation of capital, which we have represented as <math display="inline">M \rightarrow CC ... P ... CC \rightarrow M + \Delta M </math>, can therefore also be represented by <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M + \Delta M</math>. Clearly, ''surplus-Value, the Value increment <math display="inline">S =(C+L)=(C+V)=L-V</math> which is necessary to match the money increment <math display="inline">\Delta M</math> can arise if and only if the labor-time (<math display="inline">L</math>) put in by workers is greater than the labor-time (<math display="inline">V</math>) socially necessary for their reproduction''.

The same result can be derived differently. Imagine for a moment that at any given level of technology, workers in all branches of production work just long enough to produce the commodities necessary for the needs of the working class as a whole and to replace the means of production they use up in this process. Under these circumstances, no matter how "advanced" the technology, there can exist no social surplus, and hence no basis for capitalist profit. If, and only if, workers can and actually do work longer than the time necessary to maintain themselves and the means of production, will there arise a continuing social surplus; the time spent by workers in producing this surplus, their surplus labor-time, is therefore the real basis of capitalist profit. And of course since the necessary labor-time described above is none other than the aggregate value of labor-power <math display="inline">V</math>, the surplus labor-time is none other than aggregate surplus-Value <math display="inline">S</math>.<ref group="EN">If workers work only long enough to produce their means of subsistence and the commodities necessary to replace the means of production used up, then the only final (net) outputs of the system are the means of subsistence. As such the total time put in by workers is the time directly required to produce the means of subsistence, plus the time directly required to replace the means of production used up in producing these means of subsistence. But the latter time is also the time indirectly required to produce the means of subsistence: hence the total time they work is the sum of the direct and indirect labor-time necessary to produce the means of subsistence—which of course is by definition the (labor) Value of these commodities, and hence the (labor) Value of the labor-power which is reproduced through their consumption.

Similarly, any surplus labor-time they work over and above this necessary labor-time is the labor Value of the surplus-product, surplus-Value.</ref> Once again we see that surplus-Value is the "hidden basis" of any real capitalist profit.

None of this, by the way, implies that Marx intended the labor theory of value as a theory of property rights, ''à la'' Locke or even Proudhon. Marx's goal was a scientific analysis of capitalism, not a mere moral critique.<ref group="EN">See Meek's discussion of this (false) issue in [12], pp. 215-225.</ref>

== IV. The Transformation from Direct Prices to Prices of Production ==

=== 1. Exchange at Values: Direct Prices ===
In the Marxist conception of exchange-as-the-circulation-of-commodities, the total labor-time materialized in commodities during their production is the basis for their exchange-value and money-price, while the surplus labor-time materialized in them is the basis of the capitalist profit to be realized from their sale. Without a proper understanding of the quantitative and qualitative relationships between the sphere of production and the sphere of circulation, of the ''limits'' imposed on circulation by production, the laws of circulation must remain a mystery. Neoclassical economics is a testament to this.

For Marx, it was absolutely critical that the dominance of production over circulation be properly understood. It is in production that capitalist wealth is created and expanded, and Value and surplus-Value are materialized in commodities. Circulation, as we have seen, is the process whereby the previously created use-values are transferred from one hand to another, by means of money-prices.

Two things follow from this. First of all, it is in circulation that the Value magnitudes take their money-forms: Value takes the form of money-price, surplus-Value the form of money-profit; and secondly, neither Value nor surplus-Value are created in circulation, precisely because in this process commodities are merely exchanged, not created. This means that regardless of the actual money-prices involved, there can be no ''real'' increase in capitalist wealth through circulation.

It is obvious that the most direct way to explore the production and expansion of capitalist wealth is to assume that exchange takes place in proportion to the Values of commodities, so that the money-price of every commodity is equal to its Value relative to the Value of the unit of money (say one ounce of gold). I will henceforth call prices so determined "''direct prices''".

When indeed the analysis is begun this way, as Marx does in Volumes I and II of ''Capital'', it becomes clear that none of the basic categories of capitalist circulation, the categories of capital and labor, money and price, and wages and profits, owe their existence to any ''deviations'' of relative prices from relative Values. <blockquote>The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents... the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not be interfered with by disturbing circumstances that have nothing to do with the process in question. (''Capital'', Vol. I, Ch. V, p. 166, text and footnote 1.)</blockquote>

=== 2. The Conceptual Basis for Prices of Production ===
There is yet another reason for beginning with direct prices (exchange at values): the major ''systematic'' deviation of relative prices from relative Values arises when commodities exchange at "prices of production". But prices of production are prices which reflect a general rate of profit; and a general rate of profit in turn presupposes the existence of profits. Prior to any question about the formation of a general rate, therefore, is the question about the source of profit.<ref group="EN">Marx, ''Capital'', Vol. III, Ch. IX, p. 157.</ref> This question leads Marx to surplus labor-time and hence to surplus-Value, and once again the analysis comes to Value.

The path from Value back to price of production involves two major steps. First, one must examine and understand prices and profits in general; this was done through the analysis of the relationship of production to circulation, and of the relationship of Value to money. Second, since prices of production must reflect a general rate of profit, one is led to an analysis of the formation of this general rate out of the individual rates of profit in each sector of production. We turn to this now.

Let us recall that the general process for the formation of capital could be written as <math display="inline">M \rightarrow C+ V ... P ... C+L \rightarrow M'</math>, where M is the money price of commodity inputs into production: the means of production having the Value <math display="inline">C</math> and labor-power having the Value <math display="inline">V</math>. <math display="inline">M'</math>, on the other hand, is the money price of the commodity outputs of production; their total Value is <math display="inline">C + L</math>. By definition, <math display="inline">S=L-V</math>.

In money terms, the general money rate of profit is <math display="inline">r = (M' - M)/M</math>, the aggregate profit <math display="inline">M'- M</math> divided by the capital advanced <math display="inline">M </math>. In terms of Value, the general ''Value'' rate of profit is <math display="inline">\rho = S/(C+V)</math>, the aggregate surplus-Value <math display="inline">S </math> divided by <math display="inline">C+V</math>, the Value of the inputs. Obviously, if prices are proportional to Values, then the general money rate of profit must equal the general Value rate of profit: <math display="inline">r = \rho </math>.

We now consider two individual circuits of capital involving sectors of production I and J, as represented by <math>M_i \rightarrow (C_i+ V_i) ... P ... C_i + L_i \rightarrow M'_i </math>; and <math display="inline">M_j \rightarrow (C_j+ V_j) ... P ... C_j + L_j \rightarrow M'_j </math>, respectively. If prices are proportional to Values, then in each sector the sectoral Value and money rates of profit are the same. We need therefore deal only with the Value rates <math>\rho_i = S_i/(C_i+V_i)</math> and <math display="inline">\rho_j = S_j/(C_j+V_j)</math>.

The first question we must then ask is: are these two Value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> generally equal? For ''if'' they were, then at prices proportional to Values each sector would have the same money and value rates of profit, and no movement of prices would be necessary to equalize the individual rates of profit. To facilitate the answer, Marx rewrites each expression for the value rate of profit by dividing both the numerator and denominator of each fraction by the Value of labor-power V:

<math display="block">\rho_i = \frac{S_i}{V_i} \bigg| \frac{C_i+V_i}{V_i} \qquad \text{and} \qquad \rho_j = \frac{S_j}{V_j} \bigg| \frac{C_j+V_j}{V_j}</math>

Each Value rate of profit is therefore itself the ratio of two component ratios: <math display="inline">S/V</math>, which Marx calls the rate of surplus-Value, and <math display="inline">(C + V)/V</math>, which he calls the organic composition of capital. We will deal with each in turn.

==== ''A. The Equality of Rates of Surplus-Value'' ====
For society as a whole in any given period, the productive activities of workers may be viewed as a certain aggregate quantity of labor-time <math display="inline">L</math>. But the very fact that the concrete labor-times of different workers can be added together requires that they have already in some way been made qualitatively equal, that they have been reduced to quantities of some ''general'' social labor-time, what Marx calls "abstract" labor-time. This reduction of concrete labor-times to abstract labor-time is of course a consequence of generalized commodity production, as discussed in the section on Value (II.4); for our purposes, what is important in this is that it implies that the labor-time of each worker represents a definite quantity of abstract labor-time.<ref group="EN">The product of each concrete labor-time has a definite quantity of Value—abstract or general labor-time—which is measured by the average quantity of labor-time required for the production of the average product of this type. As such, the actual quantity of labor time put in by a given worker, such as the hand-loom weaver of Footnote 13, counts only as the quantity of average value-added in the production of the average commodity.</ref>

Of the aggregate labor-time <math display="inline">L</math>, a certain portion <math display="inline">V</math> represents the time socially necessary for the production of the means of subsistence of the working class, and the remainder <math display="inline">S</math>, the aggregate surplus labor-time, constitutes the surplus-Value materialized in commodities during their production. If the working day is the same in all branches of production, then each worker adds the same amount of Value to the product, in a given time period (like a day). If the wage rate for a given type of work is the same in all branches, then each worker can purchase the same share of the aggregate means of subsistence; a uniform wage thus represents a given quantity of (abstract) labor-time (say 4 hours a day) which each worker must put in to reproduce the Value of his or her labor-power. Clearly, if the length of the working day (say 10 hours) is indeed the same in all branches, each worker will work the same amount of surplus labor-time (6 hours a day). That is, in each sector, the rates of surplus-Value will necessarily be equal. These rates, therefore, cannot be the source of any differences between the Value rates of profit <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math>.

==== ''B. The Inequality of Organic Compositions of Capital'' ====
The above results imply that in any one sector, say sector J, <math display="inline">V</math> is an index of the total quantity of labor-time <math display="inline">L</math> worked in that sector, since any one hour of abstract labor-time requires the fraction <math display="inline">v</math> for its reproduction: <math display="inline">V = vL</math>. The quantity <math display="inline">C</math>, the value of the means of production in this sector, is, on the other hand, an index of the specific types and quantities of commodities which enter into this process of production as means of production. In general, therefore, unless each sector employs the same types of commodities and labor-powers in the same proportions as every other sector, the ratios <math display="inline">C_i/L_i</math>; and <math display="inline">C_j/L_j</math> will differ. Since <math display="inline">V_i</math>; and <math display="inline">V_j</math> are indexes of <math display="inline">L_i</math> and <math>L_j</math>, in general the organic compositions <math display="inline">(C_i +V_i)/V_i</math>; and <math display="inline">(C_j + V_j)/V_j </math> will differ.

To reiterate Marx's conclusion: in general, the sectoral rates of surplus-value will be equal, but the organic compositions of capital will not. Hence in general the value rates of profit will differ from sector to sector.

==== ''C. The Deviation of Prices of Production from Direct Prices'' ====
Let us now return to the two circuits of capital <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math display="inline">M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>. We began earlier by noting that ''if'' prices were proportional to Values, the money rates of profit <math display="inline">r_i = (M'_i - M_i) / M_i </math> and <math display="inline">r_j = (M'_j - M_j) / M_j </math> would be equal to the corresponding Value rates of profit <math display="inline">\rho_i = S_i/(C_i + V_i)</math> and <math display="inline">\rho_j = S_j/(C_j + V_j)</math>. If in addition the Value rates of profit were themselves equal to each other, then at direct prices, capital in each circuit would realize the same ''money'' rate of profit and no movement of prices would be necessary to bring these money rates into line with the general rate.

We have just seen, however, that in general the sectoral rates will differ; if for instance <math display="inline">\rho_i</math> was greater than <math display="inline">\rho_j</math>, the capital invested in sector <math display="inline">I</math> would, with prices proportional to Values, earn a higher money rate of profit than would capital invested in industry <math display="inline">J </math> (<math display="inline">r_i = \rho_i > r_j = \rho_j </math>). ''To equalize these money rates, therefore, relative prices would have to deviate from relative values'' in such a way as to lower <math display="inline">M'_i</math> relative to <math display="inline">M_i</math> and to raise <math display="inline">M'_j</math> relative to <math display="inline">M_j</math>, for only in this way would the higher money rate of profit <math display="inline">r_i</math> be reduced and the lower money rate <math display="inline">r_j</math> be raised.

In any sector <math display="inline">K</math>, <math display="inline">M'_k</math>, represents the money price of the commodities produced, what I called earlier the sector's total price; <math display="inline">M_k</math>, on the other hand, is the money price of the sector's commodity inputs (means of production and labor-power), what Marx calls its (money) cost-price. Since both the total price <math display="inline">M'_k</math> and the cost-price <math display="inline">M_k</math>, are in essence determined by the prices of commodities, any movements of relative prices, including the ones under consideration here, will in general change both <math display="inline">M'_k</math>, and <math display="inline">M_k</math>: the overall price movements necessary for the formation of a general rate can therefore be quite complicated, as Sraffa has so elegantly demonstrated.<ref group="EN">Sraffa's initial point of reference is a set of prices which obtain when the rate of profit is zero. As is well known, in the simplest case relative prices are then proportional to relative Values. The subsequent movements of relative prices at alternate positive rates of profit which he then analyzes may be therefore viewed as the analysis of relative price-Value deviations at alternative levels of the rate of surplus-Value.</ref>

Nonetheless, beginning from prices proportional to Values, for any sector <math display="inline">I</math> whose Value rate of profit <math display="inline">\rho_i</math> is higher than the average Value rate <math display="inline">\rho</math>, its total price <math display="inline">M'_i</math> must fall relative to its cost-price <math display="inline">M_i</math>, in order to bring its money rate of profit <math display="inline">r_i</math> into line with the general money rate <math display="inline">r </math>. The opposite movement must take place for a Sector <math display="inline">J</math> whose Value rate of profit <math display="inline">\rho_j</math> is lower than the average Value rate <math display="inline">\rho</math>.

Since the differences in the value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> upon which these price movements are predicated are themselves a consequence of the differences between sectoral organic compositions of capital, one may equally well say that, beginning from prices proportional to Values, a sector's total price must fall (or rise) relative to its money cost-price according to whether its organic composition of capital is lower (or higher) than the social average, if its particular money rate of profit is to conform to the general rate.

It does not follow from the above, however, that the general ''money'' rate of profit will continue to equal the general ''Value'' rate of profit, once prices deviate from a strict proportionality with Values. To see why, let us recall that <math display="inline">M'</math>, the aggregate price of commodities, is the total price of the commodities which form the social product. On the other hand, the aggregate cost-price <math display="inline">M</math> is the total price of the commodities, the means of production and the labor-power, which form the inputs into the aggregate process of production. Since the price of labor-power is determined by the price of its means of subsistence the aggregate cost-price <math display="inline">M</math> is in effect the total price of the means of production and the means of subsistence.

Suppose the social product was 100 bushels corn and 100 tons iron. <math display="inline">M'</math> would be its total price. In general, the aggregate means of production and means of subsistence will also consist of quantities of one or both of these commodities, say 80 bushels corn and 60 tons iron. <math display="inline">M</math> would then be their total price. Because these two aggregate "bundles" of commodities will generally differ in their proportions of corn to iron, as is true of the case illustrated above, any movement in the price of corn relative to iron will affect them unequally. Hence ''any'' movement of relative prices will in general change the ratio <math display="inline">M'/M</math> or equivalently, the general rate of profit <math display="inline">r = [(M'-M)/M] = [(M'/M)-1] </math>.

The quantity <math display="inline">M'</math> is of course the sum of prices, while the quantity <math display="inline">\Delta M = M' - M </math> is aggregate money profit. The above result may therefore be stated in an equivalent form: in general, ''any deviations of relative prices from relative Values, including but not only'' those which arise from the formation of a general money rate of profit, ''will make it impossible for both the sum of money prices <math display="inline">M'</math> and the sum of money profits <math display="inline">\Delta M</math> to remain strictly proportional to the sum of Values'' <math display="inline">C + L</math> ''and the sum of surplus-Values'' <math display="inline">S</math>'', respectively''. This result is well known in the debate about the so-called transformation problem; but as it is stated above, it arises in a broader context. In any case, in order to discern its real content, we must examine matters a bit more carefully.

=== 3. Some General Effects of Price-Value Disproportionality ===
In much of the literature on the "transformation problem", there is a great confusion between Values, prices proportional to Values (what I call direct prices), and prices of production. In particular, since direct prices are so simply related to Values, the general issue of the differences between price and Value, and profit and surplus-Value, tends to be taken up only when we turn to prices of production. All of a sudden, we are confronted with the impossibility of a simple proportionality between Value magnitudes and their money-forms, and it begins to seem as if the analysis of Value is something quite separate from the analysis of price.<ref group="EN">A. Emmanuel [3] provides a modern example of a neo-Smithian theory of price, in which the "labor theory" of price is valid when there is only one class of recipients of the net product (laborers), and the theory of prices of production is valid when there are two classes of recipients: capitalists and workers (see Emmanuel, ''op. cit.'', Ch. 1, and Appendix V). This rejection of "labor" as a determinant of price has its roots in the confusion and difficulty surrounding the "transformation problem".</ref>

For this reason, I have attempted throughout this paper to carefully distinguish between Value, which stems from production, and money-price, which is the form taken by Value in circulation. With this distinction in hand, it is possible to see that money-magnitudes are ''always'' different, both qualitatively and quantitatively, from Value magnitudes. Marx notes, for instance, that precisely because the form of Value is not the same thing as Value, the determination of money-price is a ''complex combination'' of its Value elements.

Consider the simplest case, that of direct prices. Suppose the Value of a gold coin weighing 1/4 ounce (which we call a "£")<ref group="FN ">Originally a "£" represented a pound of silver. Hence the name. Over time, however, while the money-name "£" was retained, the silver or gold content decreased steadily. By Marx's time, a "£" represented roughly 1/3 of a pound of silver, or about 1/4 of an ounce of gold (Marx, ''Contribution to a Critique''..., Ch. II, Sec. 1, p. 72).</ref> is 1/2 worker-hour, while that of a bushel of wheat is 100 worker-hours. The direct price of wheat will then be £200. Even right here, Value (100 hours) and price (£200) are both qualitatively and quantitatively different (though related) magnitudes, with different units.

Now suppose the Value of wheat falls by half, to 50 worker-hours. How will this be reflected in its direct price? Well, says Marx, that depends; if the Value of gold also fell by a half, the money-price of wheat would remain constant at £200; if the Value of gold fell by more than a half, the money-price of wheat would rise even though its Value fell!<ref group="EN">See Marx, ''Capital'', Vol. I, Ch.3, Section 2b, pp. 53-54.</ref> Even in this simple case, therefore, the laws which determine the money-form of Value are more complex than those which determine Value itself. But this is hardly an analytical defect; on the contrary, it is the whole point of theoretical analysis to be able to derive more complex categories from basic ones.

If indeed price and Value are always distinct, what exactly is the "transformation" issue about? Clearly, it is about a ''transformation in the form-of-Value''; it is a transformation from the direct expression of Value (direct prices) o a more complex expression (prices of production). What we have to do, therefore, is to see what is altered by this change in form, and what is not.

We begin by noting that what we are considering here is a ''pure'' change of form. For instance, in the traditional formulation of the transformation we analyze a capitalist society in a simple or extended reproduction, first when exchange is ruled by direct prices, and then when it is ruled by prices of production.<ref group="FN ">See section IV.4 of this paper, which discusses the calculation of prices of production.</ref> In both cases, the composition and distribution of the use-values is the same: the same mass of commodities is circulated in either case, with the same physical composition of means of subsistence and surplus-product. Thus the same total commodity Value, the same aggregate Value of labor-power, and the same aggregate surplus-Value, is circulated by the two different price-forms. From the point of view of the system as a whole, the transformation leads to no real change; all that changes is the manner in which given production relations are manifested in circulation.

From the point of view of individual capitals, however, the situation is indeed different. With direct prices, each capitalist realizes an amount of money profit proportional to the surplus-Value contained in the commodities he sells. With prices of production, each sector's money profit is no longer proportional to its surplus-Value; since the sum of Values (and hence the total surplus-Value) circulated is still the same as before, the above change of form has the effect of redistributing surplus-Value from one sphere of production to another. <blockquote>The fact that prices diverge from [proportionality with] values cannot, however, exert any influence on the movements of social capital. On the whole, there is the same exchange of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by everyone of them. (Marx, ''Capital'', Volume II, Ch. XX, Section 1, p. 393)

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (Marx, ''Capital'', Volume II, Ch. II, p. 43) </blockquote>What has been said above in fact applies to any set of prices which differ from direct prices, not just to prices of production. What it shows is that there are limits to the effects of different forms of Value, and that these limits arise precisely in the Value magnitudes whose distribution is brought about through these money-forms.

It does not follow from this, however, that the determination of money-prices is of no consequence. Different forms of Value have different ''real'' effects on individual capitals, and these in turn have different implications for the dynamic process of accumulation and reproduction. It is through the actual movements of money-prices that the system is regulated; as such, the analysis of prices of production (which act as centers of gravity of market prices), and of their relation to Values, is of the utmost importance to concrete analysis. The first step (which in most discussions of the "transformation problem" is the ''only'' step) along this path is the derivation of prices of production from direct prices.

=== 4. The Calculation of Prices of Production ===
In general, we may characterize any two circuits of capital as <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math>M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>.

When exchange is at Values, the money rate of profit in each circuit will equal the Value rate of profit in that circuit. Since Value rates will in general differ from sector to sector, owing to differences in their organic compositions of capital, exchange at Values will imply unequal rates of profit in different sectors, and hence in different circuits of capital.

It follows from the above that the formation of a general rate of profit out of the various individual rates of profit will require that for a sector with a Value rate of profit higher than the social average, the money price of its product <math display="inline">M'_i </math> must fall relative to its money cost-price <math display="inline">M_i </math>, since only this movement will lower its money rate of profit <math display="inline">r_i </math>. As we saw earlier in section III.2.C, this ''must'' hold regardless of how complicated the effects of the formation of a general rate of profit on the overall pattern of prices. And as we shall see immediately, ''it is precisely this movement which is captured by Marx's own transformation procedure''.

==== ''A. Marx's Transformation Procedure'' ====
The example below illustrates the three basic circuits of capital in Marx's analysis: Circuit I represents the production of the means of production themselves, Circuit II the production of the means of subsistence of the working class, and Circuit III the production of the means of consumption of the capitalist class. The example itself, though from Bortkiewicz, not Marx, is used because it is the standard illustration of the so-called transformation "problem" and appears in most discussions of the issue.<ref group="CN">Esto ha sido una gran fuente de confusión...</ref>

Because we have throughout distinguished between Value and money-price and because the issue at hand centers on differences in their magnitudes, we must be careful with notation. As defined earlier, <math display="inline">C_i</math> will represent the value of the means of production of the <math display="inline">i </math>th department, <math display="inline">V_i</math> the value of the labor-power employed there, and <math display="inline">S_i=L_i-V_i </math> the surplus-value produced there; the total value <math display="inline">C_i + L_i</math> produced will be designated by <math display="inline">W_i </math>. In contrast, <math display="inline">MC_i </math> will represent constant capital, the money price of the means of production used in the department, and <math display="inline">M V_i </math> variable capital, the money price of the labor-power used there; as before, <math display="inline">M_i </math> will be the total cost-price and <math display="inline">M'_i </math> the total price of the product. All Value quantities will be in units of (abstract) labor-time, worker-hours, and all money quantities in £'s (1/4 ounce gold coins). It is also assumed that each £-coin has a Value of 1/2 worker-hour.

When exchange is at Values, we get the results shown in Table 1. It should be noted that the table has been designed to correspond to the whole circuit of capital, <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M'</math>, so that the phases of circulation are clearly distinguished from those of production.
{| class="wikitable"
|+Table 1 / Exchange at Values
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
! colspan="2" |<math display="inline">... (C+L) </math>
! colspan="2" |<math display="inline">\rightarrow M' </math>
|-
|
!Constant Capital (MCi)
!Variable Capital (MVi)
!Cost-price (Mi)
!Value of Means of Prod. (Ci)
!Value of Labor-Power (Vi)
!Surplus Value (Si)
!Total Value (Wi)
!Value Rate of Profit % (Pi)
!Total Price (M'i)
!Total Profit (ΔMi)
|-
|(Means of Production)
|450
|180
|630
|225
|90
|60
|375
|19.05
|750
|120
|-
|(Means of Subsistence)
|200
|240
|440
|100
|120
|80
|300
|36.36
|600
|160
|-
|(Capitalist Consumption)
|100
|180
|280
|50
|90
|60
|200
|42.85
|400
|120
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|
|£1750
|£400
|}
Marx's transformation procedure is simple: noting that in Table 1 the total cost-price <math display="inline">M </math> = £1350 (column 3) and the total money profit <math display="inline">\Delta M </math> = £400 (column 10), we get an average rate of profit on social capital of <math display="inline">r= 400/1350 = 29.63 \% </math>.

At existing prices, however, the capital in circuit I, invested in department I, would realize only a 19.05% rate of profit. Thus, in order to raise its money rate of profit to the average level, it must raise its money price. Since its money cost-price is £630, the "normal" profit that it would earn at the average rate of profit is 29.63% of £630, which is £186.67: the level to which it must raise its price therefore is given by M' = £630 + £186.67 = £816.67. Similarly, department II must lower its money-price to M' = £570.37, and department III must lower its to M'= £362.96 (see Table 2).
{| class="wikitable"
|+Table 2 / Max's Transformation
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
!<math display="inline">... (C+L) </math>
!<math display="inline">\rightarrow M' </math>
!
!
|-
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi'
!ΔMi
!ri
|-
|I
|450
|180
|630
|225
|90
|60
|375
|816.67
|186.67
|29.63
|-
|II
|200
|240
|440
|100
|120
|80
|300
|570.37
|130.37
|29.63
|-
|III
|100
|180
|280
|50
|90
|60
|200
|362.96
|82.96
|29.63
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|}
Table 2 illustrates Marx's transformation procedure. In it, the transformation ''per se'' refers to the movements of money-prices, ''not'' to changes in the Value flows. ''Moreover, the direction of movement of money prices'' <math display="inline">M'_i </math> ''to their corresponding cost-prices'' <math display="inline">M_i </math> ''is the correct one'': <math display="inline">M'_1 </math> rises relative to its cost-price, and <math display="inline">M'_2 </math> and <math display="inline">M'_3 </math> fall relative to theirs.

==== ''B. The "Correct" Prices of Production'' ====
From Bohm-Bawerk onwards, critics have argued that Marx's procedure was simply incorrect. They pointed out, for instance, that his transformation leaves the money prices of inputs (MC;, MV;) unchanged, whereas a thoroughgoing transformation would change these too. Marxists have countered these charges by claiming that, in any case, one can show the formal possibility of deriving prices of production from direct prices; in the Bortkiewicz method, for example, one can solve for a series of price multipliers which would enable one to transform the exchange-at-Values scheme of Table 1 to the "correct" exchange-at- prices-of-production scheme.<ref group="EN">Sweezy [21], Ch. V.</ref> Then, depending on whether one prefers the sum of prices or the sum of profits as constant, one can always "normalize" the multipliers derived from the Bortkiewicz method to make one or the other hold, for in general both cannot.

Even if the controversy about the appropriate "normalization", much of which arises from a confusion between Value and money-price, is satisfactorily resolved, the real problem with all of these foregoing transformation procedures remains: they effectively sever the link between Values and money-prices, or at least bury it in algebra, and are forced to reject Marx's own procedure as completely erroneous. Thus for instance in this example, the appropriate algebraic procedure would "jump" us from Table 1, representing exchange at Values, to Table 3 below, which portrays the "correct" price of production scheme under an (algebraically) arbitrary "normalization" which keeps the sum of money-prices (£1750) invariant to the transformation. In all of this, Marx's own trans- formation, as represented in Table 2, plays no role at all.
{| class="wikitable"
|+Table 3 / The "Correct" Prices of Production
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi
!Delta Mi
!ri
|-
|I
|504
|168
|672
|225
|90
|60
|375
|840
|168
|25%
|-
|II
|224
|224
|448
|100
|120
|80
|300
|560
|112
|25%
|-
|III
|112
|168
|280
|50
|90
|60
|200
|350
|70
|25%
|-
!Total
|£840
|£560
|£1400
|375
|300
|200
|875
|£1750
|£350
|
|}

==== ''C. Marx's Transformation Procedure Extended'' ====
Marx himself never goes beyond the transformation procedure he illustrates in Volume III of ''Capital''. And yet in several instances, he indicates clearly his awareness of the issue:<ref group="EN">In addition to the transformation discussion in Volume III of ''Capital'', see: ''Theories of Surplus Value'', Part III, Ch. XX, p. 82 and pp. 167-168.</ref> <blockquote>Aside from the fact that the price of a particular product... differs from its value... the same circumstance applies also to those commodities which form the constant part of (its) capital, and indirectly also its variable part, as the labourer's necessities of life... Under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations. (''Capital'', Vol. III, Ch. IX, p. 161.)

The foregoing statements have at any rate modified the original assumptions concerning the determination of the cost-price of commodities... Since the price of production may differ from the value of a commodity, it follows that the cost-price of a commodity containing this price of production of another commodity may also stand above or below that portion of its total value derived from the value of the means of production consumed by it. It is necessary to remember this modified significance of the cost-price, and to bear in mind that there is always the possibility of error if the cost-price of a commodity in any particular sphere is identified with the value of the means of production consumed by it. Our present analysis does not necessitate a closer examination of this point. (''Ibid.'', pp. 164-65.) </blockquote>To his critics, especially to those for whom only the ''calculation'' of prices of production has any significance, Marx's postponement of the "feedback" effects of the price-Value disproportionalities is an admission of failure—hence the so-called "great contradiction" between Volumes I and III.

But there is in fact a simple alternative: Let us extend Marx's procedure by progressively "feeding back" the effects of the initial price-Value disproportionalities and see what happens. Table 4 illustrates this extended procedure. In order to emphasize the fact that the transformation and its extension affect only money flows M and M', and not the Value flows (C + V) ... P... (C+L), I have included both. This is somewhat tedious but it does make it clear that Value and surplus-Value are distinct from price and profit, a distinction which arises precisely from the difference between the spheres of production and circulation. But before we turn to this, we must first understand the logic involved.

We begin with exchange at Values (as was previously illustrated in Table 1). Let us now consider for a moment the real content of Marx's transformation procedure. If prices were actually proportional to Values, then rates of profit in each sector would differ from the social average. All other things being equal, either the competition of capitals or the threat of this competition would force the various sectors to adjust the prices of their products in such a way as to realize only the average rate of profit. In Department's II and III, for instance, which would have higher than average profit rates, either the threat of competition or else the actual inflow of capital would lower prices till only the average profit was obtained; in Department I, the reverse would take place.

In any real situation similar to the above, the actual adjustment process would involve changes in both the unit prices and the quantities sold; any actual inflow of capital would lower price through an expansion of supply; conversely, any lowering of price in response to the threat of competition would increase the amount sold.

But what we are interested in here is the pure change of form involved in the equalization of profit rates. And this, for a given mass of commodities, is an adjustment process ''which leaves the total sum of money prices unchanged'': since the cost-prices have already been incurred by the individual capitalist, the immediate burden of adjustment must fall upon current product prices, and their response in the face of capitalist competition is precisely to rise or fall till the individual rates of profit all equal the existing average rate. This simply means that the unit price of average commodity output is under no immediate compulsion to change, because in this case the rate of profit is the average rate. The average commodity, however, is only a microcosm of the total mass of commodities: the constancy of its price is therefore equivalent to the constancy of the total sum of prices.

Marx's transformation procedure is merely an application of the logic of this adjustment process. In Table 4, the initial situation under consideration in Step 1A is exchange at Values: the sum of prices is £1750, and the sum of profits is £400. Step 1B then illustrates Marx's own transformation, in which the immediate process of adjustment redistributes the given mass of surplus-Value (whose magnitude cannot of course be changed in circulation) by raising prices in Department I and lowering them in II and III. The sum of money prices remains unchanged at £1750, and in this instance the sum of money profits also remains at its previous level of £400.

Expressed in proportion to its previous price, which was its direct price, the change in the money-price of Department I is Yy = 816.67/750 = 1.089. Similarly, ¥, = 0.951 and ¥ = 0.907.
{| class="wikitable"
|+Table 4 / The Transformation from Direct Prices to Prices of Production<ref group="FN">The actual calculation was done to three significant digits after the decimal point. The numbers shown here are rounded off to two places. </ref>
|
|
! colspan="3" |
! colspan="6" |
!
!
|-
|
!Dept
!<math display="inline">MC_i</math>
!<math display="inline">MV_i</math>
!<math display="inline">M_i</math>
!<math display="inline">C_i</math>
!<math display="inline">V_i</math>
!<math display="inline">S_i</math>
!<math display="inline">W_i</math>
!<math display="inline">M'_i</math>
!<math display="inline">\Delta M_i</math>
!<math display="inline">r_i (\%)</math>
!<math display="inline">\psi_i</math>(Multiplier)<ref group="FN" />
|-
! rowspan="4" |'''Step 1A'''Exchange at values
|I
|450
|180
|630
|225
|90
|60
|375
|750
|120
|19.05
| -
|-
|II
|200
|240
|440
|100
|120
|80
|300
|600
|160
|36.36
| -
|-
|III
|100
|180
|280
|50
|90
|60
|200
|400
|120
|42.85
| -
|-
|Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
! rowspan="4" |'''Step 1B'''Marx's transformation
|I
|“
|“
|“
|“
|“
|“
|“
|816.67
|186.66
|29.63
|1.089
|-
|II
|“
|“
|“
|“
|“
|“
|“
|570.38
|130.38
|“
|0.951
|-
|III
|“
|“
|“
|“
|“
|“
|“
|362.96
|82.96
|“
|0.907
|-
|Total
|“
|“
|“
|“
|“
|“
|“
|£1750
|£400
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
! rowspan="4" |Step 2A
Cost-prices adjusted to reflect prices of production of Step 1B
|I
|490.00
|171.12
|661.12
|“
|“
|“
|“
|816.67
|155.54
|
|“
|-
|II
|217.78
|228.14
|445.92
|“
|“
|“
|“
|570.38
|124.45
|
|“
|-
|III
|108.88
|171.12
|280.00
|“
|“
|“
|“
|362.96
|82.96
|
|“
|-
|Total
|£816.66
|£570.38
|£1387.04
|“
|“
|“
|“
|£1750
|£362.96
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|
|
|-
! rowspan="4" |Step 2B
Prices of production adjusted to equalize rates of profit in Step 2A
|I
|“
|“
|“
|“
|“
|“
|“
|834.12
|173.00
|26.17
|1.021
|-
|II
|“
|“
|“
|“
|“
|“
|“
|562.62
|116.70
|“
|0.986
|-
|III
|“
|“
|“
|“
|“
|“
|“
|353.26
|73.26
|“
|0.973
|-
|Total
|“
|“
|“
|“
|“
|“
|“
|£1750
|£362.96
|
|
|-
|<math display="inline">\vdots</math>
|
|
|
|
|
|
|
|
|
|
|
|<math display="inline">\vdots</math>
|-
! rowspan="4" |Final Step
"Correct" prices of production
|I
|504
|168
|672
|“
|“
|“
|“
|840
|168
|25
|1.
|-
|II
|224
|224
|448
|“
|“
|“
|“
|560
|112
|“
|1.
|-
|III
|112
|168
|280
|“
|“
|“
|“
|350
|70
|“
|1.
|-
|Total
|£840
|£560
|£1400
|“
|“
|“
|“
|£1750
|£350
|
|
|}
It is only in the next step, Step 2A, that we see the effect of the above deviations from direct prices on the cost-prices in each amount of capital. Since Department I produces the means of production for all departments, its price multiplier {/; = 1.089 will imply higher money prices (MC;) for all means of production. Similarly, since Department II produces the means of subsistence, its price multiplier ¥/, = 0.951 implies a lowering of the money costs of labor- power (MV;) in each amount. Y3, on the other hand, will not affect either component of cost-prices, since Department III produces only commodities for the consumption of capitalists.

Capitalists in each department will now have incurred new cost-prices differing from those in Step 1B. If they were to continue to sell their products at the prices of Step 1B their rates of profit would no longer be equal. This is the case illustrated in Step 2A. The overall effect of the preceding "feedbacks" is to raise the aggregate cost-price from £1350 to £1387.04. Since the sum of prices is unchanged, this results in a decrease of total money profit from £400 to £362.96.

Once again, therefore, capitalists in each sector would be compelled to adjust their individual money rates of profit to conform with the average rate, through the movements of their respective commodity-prices; once again, the average commodity, and hence the total mass of commodities, would be under no such compulsion, so that the total sum of prices would remain constant at £1750.

The resulting situation is depicted in Step 2B. Department I's price, compared to its previous level in Step 1B (and 2A), has risen again, this time by Yy = 834.12/816.67 .021, while those of II and III have fallen from their previous levels by Y, = 0.986 and Y3 = 0.973. The pattern of transfer of surplus-Value has therefore been altered once again; moreover, in this case the money form of the mass of surplus-Value (i.e., total money profit) has been altered in magnitude. In the same way, the money rate of profit (26.17%) is no longer simply equal in magnitude to the value rate of profit (29.63%).

In each succeeding step, the procedure may be repeated until the changes from one step to another are negligibly small—and we find ourselves with the "correct" prices of production first illustrated in Table 3! This is not, as is usually the case, on the basis of an alternative to Marx's procedure of transformation, but rather on the basis of its successive application.

The procedure illustrated in Table 4 is quite general. The proof is left to Section VI of the mathematical appendix to this paper.

== V. Some further considerations ==
In the preceding discussion, four important points have emerged in connection with the so-called "transformation problem".

First of all, it is not a case of transforming ‘"Values into prices". Rather, it is a case of transforming one form-of-Value, direct prices, into another form, prices of production.

Secondly, the issue under consideration involves a pure change of form. As such, the transformation from direct prices to prices of production does not involve any ''real'' change for the system as a whole. The total mass of commodities, and the various portions of it going to each class, remain the same as before. By the same token, so do the sum of Values and sum of surplus-Values. What the transformation brings about is a different division of the total pool of surplus-Value among individual capitalists.

Third, the transformation procedure set out by Marx reflects the inherent nature of the process of the equalization of profit rates. This is a continuously occurring process, and in its pure form it acts by changing prices of individual commodities while leaving the sum of prices of a given mass of commodities intact. In addition, Marx's procedure can be extended in a simple way to derive the "correct" prices of production.

Lastly, in the case of the "correct" prices of production, the money rate of profit will deviate from the Value rate of profit. Like the deviations of prices of production from direct prices, however, the money and Value profit rate deviation is systematic and determinate. Though we do not prove it here, it can be shown that (under any given conditions of production), the money rate of profit will vary with the Value rate.<ref group="EN">It has been proved in various places that, under given conditions of production, arise in the rate of surplus-Value will increase the ''money'' rate of profit. Since it will also have the same effect on the ''Value'' rate of profit, it follows that the two move together (see, for instance, Medio [11], pp. 339-340; or Morishima (141, Ch. 6).</ref>

These connections by no means exhaust the possibilities. The relation between the mass of surplus-Value and its transformed money-form (total money profits under prices of production) still needs to be better specified.<ref group="CN">Mediante su procedimiento, Shaikh no logra mantener la invarianza "Masa de plusvalía = Masa de ganancia monetaria"; aunque si mantiene "Masa de valores = Masa de precios de producción" puesto que estos agregados no cambian durante su transformación</ref> So too does the relationship between individual prices of production and the corresponding Values.<ref group="CN">?</ref>

Perhaps the most important point to keep in mind is that the laws that Marx derives on the basis of this theory of Value cannot be derived from a theory which ''begins'' with prices of production. For instance, Marx's distinction between Value and money-price goes hand in hand with a corresponding differentiation between production and circulation. It consequently becomes necessary to distinguish between activities which produce commodities and those which circulate them, and eventually this difference develops in the more complex and powerful distinction between surplus-Value ''producing'' labor (what Marx calls "productive" labor) and all other types (which Marx relegates to the category of "unproductive" labor). Among other things, an increase in the proportion of unproductive labor (say advertising) to productive labor, for given level of total employment, would imply a smaller mass of surplus-Value to be shared out, and hence a smaller rate of profit. Such a conclusion has no parallel in orthodox theories of price.

Marx's analysis abounds with similar examples. His theory of money, for instance, is the direct opposite of the Quantity Theory.<ref group="EN">See Marx, ''Capital'', Vol. I, Ch. 3; or ''Contribution to the Critique of Political Economy'', Chapter 2.</ref> Similarly, his theory of the falling tendency of the rate of profit, and the theory of accumulation and crises which stems from it, receive their characteristic form from the distinction between constant and variable capital—precisely a distinction which makes no sense without the notion of Value.

All of this means that if Marx's economic analysis is to be developed, it must first be understood. Or else it must be abandoned altogether. The latter path is no doubt simpler, and certainly more consistent with orthodox economics. If the task is to understand the world in order to change it, then the adequacy of analysis, not its "acceptability", is all that matters. And on that basis, it seems to me that Marx's analysis is the most appropriate starting point.

== VI. Conclusions ==
It is the function of all scientific analysis to get beneath the surface of phenomena, to reduce their apparent movement to the real: "...all science would be superfluous if the outward appearance and the essence of things directly coincided".<ref group="EN">Marx, ''Capital'', Vol. III, Part III, Ch. XLVIII, p. 813.</ref>

The outward appearance of the sphere of circulation is one of freedom, equality, and choice: it is a world whose real inhabitants are inherently-equal-things, commodities, a world into which human beings enter only as representatives of these "natural" democrats: "It is an enchanted, perverted, topsy-turvy world, in which Monsieur le Capital and Madame la Terre do their ghost-walking as social characters and at the same time directly as mere things".<ref group="EN">''Ibid.'', p. 830.</ref>

To Marx, the great merit of classical economy was that it saw through, albeit incompletely, this "false appearance and illusion, this mutual independence and ossification of the various ''social'' elements of wealth, this personification of things and the conversion of production relations into entities, this religion of everyday life. It did so by reducing interest to a portion of profit and rent to the surplus above average profit, so that both of them converge in surplus-value; and by representing the process of circulation as a mere metamorphosis of forms, and finally reducing value and surplus-value of commodities to labour in the direct production process".<ref group="EN">''Ibid.'', p. 830. Emphasis added.</ref> In this way the classical economists were able to get beyond the simple conceptions generated by the outward appearance of capitalism, penetrating the disguise of circulation and seeing behind it the process of production. But they themselves were trapped by their inability to properly distinguish capitalist production from other historically determinate forms; by taking as given and eternal the concepts generated by the outward appearance of capitalist production, they remained "more or less in the grip of the world of illusion which their criticism had dissolved".<ref group="EN">''Ibid.'', p. 830.</ref>

The "world of illusion" Marx refers to represents the conceptions common to bourgeois thinkers; it covers not only the actual analysis of classical economists and of their targets, the vulgar economists, but also the conceptual framework within which they clash. Contained in their agreements and disagreements is an implicit philosophy, an implicit theory of history, an implicit anthropology, and so on.<ref group="EN">See Althusser’s discussion of this in [1], Ch. 2-4.</ref> Thus for Marx the critique of classical economy is at the same time a critique of its philosophy, its history, its anthropology. His analysis in ''Capital'' is necessarily predicated on all of these critiques; the vast distance between Marx and the classical economists, and hence between "value" in Marx and "value" in classical economy, can only be understood if one recognizes that in solving the problems of the classical economists Marx also breaks with the (often implicit) bases on which they had formulated their questions.

Insofar as the problems to be dealt with center largely on the magnitude of Value, as is often the case in this paper, the real difference between Marx and Ricardo, the difference in their methods, tends to be hidden. Marx's superior ability to solve Ricardo's problems, is, as he himself insists, due to his ability to transcend "the world of illusion" in whose grip Ricardo remains. This superior ability is therefore only a symptom of the real difference between Marx and the classicals. But to those who either explicitly or implicitly reduce Marx to Ricardo, this symptom becomes the real difference itself. Marx becomes a clever, if somewhat mystical, post-Ricardian.

The very same process of reduction often operates even further in the comparison of Marx to neoclassical analysis. Not only are Marx and Ricardo lumped together, but both are reduced to the one-dimensional world of neo-classical analysis. Here, the very conception of the problem to be analyzed is usually neoclassical; even those who reject the flatness of its theory are very often forced to fight their battles on its terms, and hence ''within'' its general framework.

The so-called transformation problem is a classic example of all this. As it is usually presented, the central issue is one of the ''calculation'' of static prices of production, and the major point of contention is the presence or absence of a relationship between Marx's transformation procedure and the "correct" one.

I have, as much as possible, attempted to avoid this trap. Certainly the issue of calculation is relevant; but the ''conception'' of that-which-is-to-be-calculated comes first, for in that conception lies the superiority of Marx's method. The early part of this paper therefore attempts to provide the basis of Marx's conception of prices in general, and prices of production in particular. In this way we are able to resolve many of the confusions surrounding the so-called "transformation problem", as well as being able to demonstrate that the "correct" prices of production can be calculated from values ''in the manner suggested by Marx's own transformation procedure''.

== Mathematical Appendix ==
Lack of space makes it impossible to include the mathematical appendix to this reading. However, [https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ a copy of the appendix] is available on request from the author of this reading.

== References ==

# L. Althusser and E. Balibar, ''Reading Capital'', translated from the French by Ben Brewster, Pantheon Books, (New York: Random House), 1970.
# W. Baumol, "The Transformation of Values: What Marx ‘Really' Meant (An Interpretation), ''Journal of Economic Literature'', March 1974, Vol. XII, No. 1.
# A. Emmanuel, ''Unequal Exchange: A Study of the Imperialism of Trade'' (New York: Monthly Review Press), 1972.
# T. Kuhn, ''The Structure of Scientific Revolutions'' (Chicago: University of Chicago Press), 1970.
# E.Mandel, "Value, Surplus Value, Profit, Prices of Production and Surplus Capital—A Reply to Geoff Hodgson", ''International Socialist Review'', Vol. 2, No. 1, Spring 1973.
# K. Lancaster, ''Mathematical Economics'' (New York: The Macmillan Company), 1968.
# Karl Marx, ''A Contribution to the Critique of Political Economy'', with an Introduction by Maurice Dobb (New York: International Publishers), 1970.
# —, ''Theory of Surplus Value: Volume IV of Capital'' (Moscow: Progress Publishers), Part I, 1969; Part II, 1968; Part III, 1971.
# —, ''Capital'', Volumes I-III (New York: International Publishers), 1967.
# —, "Comments on Adolph Wagner's ‘Lehrbuch der politischen Okonomie', 1879/80", published as ''Karl Marx on Value'', British and Irish Communist Organization, Belfast, 1971.
# A. Medio, "Profits and Surplus-Value: Appearance and Reality in Capitalist Production", published in ''A Critique of Economic Theory'', edited by E. K. Hunt and Jesse G. Schwartz (London: Penguin Books), 1972.
# R. Meek, ''Economics and Ideology and Other Essays'' (London: Chapman and Hall), 1967.
# M. Morishima and F. Seton, "Aggregation in Leontief Matrices and the Labour Theory of Value", ''Econometrica'', Vol. 29, 2 (April 1961), pp. 203-220.
# M. Morishima, ''Marx's Economics'' (Cambridge: Cambridge University Press), 1973
# J. Robinson, ''An Essay on Marxian Economics'', Second Edition (London: Macmillan; New York: St. Martin's Press), 1969.
# B. Rowthorn, "Skilled Labour in the Marxist System", ''Bulletin of the Conference of Socialist Economists'', Spring 1974, pp. 25-45.
# P. A. Samuelson, "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, Vol. IX, No. 2, pp- 399-431.
# F. Seton, "The ‘Transformation Problem'", ''Review of Economic Studies'', June 1957, 25, pp. 149-160.
# A. Shaikh, ''Theories of Value and Theories of Distribution'', Columbia University Ph.D., 1973 (unpublished).
# P. Sraffa, ''Production of Commodities by Means of Commodities'' (Cambridge: Cambridge University Press), 1960.
# P. M. Sweezy, ''The Theory of Capitalist Development'' (New York: Monthly Review Press), 1964.

== Endnotes [EN] ==
<references group="EN" />

== Footnotes [FN] ==
<references group="FN " />

== Critical Notes [CN] ==
By [[Comrade:Ismael|Comrade Ismael]]<references group="CN" />
[[Category:Works by Anwar Shaikh]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T19:30:30Z

Ismael:

<blockquote>''This article, a solution to a problem that has plagued a century of Marxian scholarship, was previously unpublished.''<ref group="CN">Shaikh presented a solution of the transformation problem initially in his doctoral thesis in 1973. Similar solutions were presented, independently from each other, by Morishima (1973) and Okishio (1974). In evaluating the three solutions, we find that Shaikh's (1973 and 1977) is conceptually by far richer than the other two, while the solutions by Morishima (1973) and Okishio (1974) are restricted mainly to the mathematical statements of the problem and the conditions required for the fulfillment of the two equalities. - Footnote taken from Tsoulfidis, L & Tsalikē, P (2019) ''Classical political economics and modern capitalism: theories of value, competition, trade and long cycles'', Springer, p. 99.</ref></blockquote>{{Library work|title=Marx's Theory of Value and the "Transformation Problem"|author=Anwar Shaikh|published_date=1977|pdf=https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ}}

== I. Introduction ==
It is curious that in the almost eighty years since the publication of Volume III of Marx's ''Capital'', a major theoretical problem, the infamous "transformation problem", has never been satisfactorily resolved. Throughout Volume I, written by Marx ''after'' he had already completed the first draft of Volume III, the analysis is based on the assumption that exchanges of commodities take place at prices proportional to their labor values. I will call these prices the "direct prices" of commodities. In Volume III, which was compiled by Engels from the incomplete first draft, after Marx's death, Marx extends his analysis to take into account "prices of production", demonstrating how one can derive these prices from the "direct prices" of Volume I. This derivation, from then on the center of an intense controversy, was the original "transformation procedure".

Opponents of the labor theory of value immediately seized on the apparent incompleteness of Marx's procedure. Bohm-Bawerk, for instance, questioned the tenability of Marx's statement that the sum of prices after the transformation would remain equal to the sum of values; others have pointed out that Marx's procedure contains an "error", because while he transforms the prices of outputs from "direct prices" to "prices of production", he leaves the inputs untransformed. Since commodities appearing as outputs of a productive system are often also inputs into the system, it is argued that Marx's procedure is logically flawed; "direct prices" and "prices of production" are two separate and unrelated phenomena, leading to a "great contradiction" between Volume I and Volume III of ''Capital''. More recently, essentially the same point has been made by Samuelson [17], in which he attacks the very idea of a transformation procedure: "Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila! You have completed your transformation algorithm".<ref group="EN">P. A. Samuelson [Bibliography Reference 17], p. 400.</ref> As we shall see. this criticism is completely incorrect, it is also somewhat misplaced; if anything, it applies most properly to the neoclassical "transformation procedure" which was the center of the so-called Cambridge Capital Controversies, a procedure in which Samuelson himself was quite prominent.<ref group="FN ">For a discussion of this debate as a neoclassical "transformation problem", see Shaikh [19].</ref>

On the Marxian side, there have been, of course, many "solutions" to the transformation problem, from Bortkiewicz's original transformation procedure and its subsequent variants to Francis Seton's important paper [18]. Unfortunately, as even supporters and sympathetic critics of the labor theory of value admit, these "solutions" all suffer from the same basic defects; they show "the possibility of a consistent derivation of prices from values"<ref group="EN">Meek, "Some Notes on the 'Transformation problem'", in Meek [12], p. 150.</ref> while apparently severing the crucial links between price and value magnitudes which Marx seemed to emphasize in his own procedure. In most discussions of the issue, these links have appeared in the form of the following equalities: of the "sum of prices" and the "sum of values"; of the magnitude of profits and the magnitude of surplus-value; of the profit-wage ratio and the rate of surplus- value; and of the general rate of profit in price terms and the same rate in value terms. As is well-known by now, in any "correct solution" either the first or the second, but not both, can be always made to hold, while in general the other two cannot. What then are we to make of Marx's procedure?

It has been suggested that Marx, having published Volume I in full confidence that the labor theory of value was the correct basis, discovered too late, in writing Volume III, that it was not. But that doesn't work, because we know that Volume I was published well after Volume III had been drafted. Others, perhaps more charitably, have suggested that because the labor theory of value as a theory of relative prices was so much a part of the tradition of classical economics, it was taken over by Marx almost unexamined. A variant of this line of reasoning, which is popular among some Marxists, is that if nowadays we view Marx-as-an-economist as a member of the classical school, it is we who import into Marx's theory of value, which is only nominally similar to that of Smith and Ricardo, the pre-Marxian question of the quantitative relationship between prices and values. In the variant, therefore, the lack of examination is on our part, not that of Marx. Marx was simply not terribly concerned with the quantitative relationship.<ref group="EN">See, for instance, Mandel [5], pp. 64-65. For a non-Marxist with a similar position, see Baumol [2].</ref>

To anyone who has read Marx's voluminous comments and critiques of the classical economists, notably in ''Theory of Surplus-Value'' and in ''Capital'', it becomes impossible to ascribe to Marx an unthinking take-over of a labor theory of value from anyone at all. Marx spends literally hundreds of pages discussing values and their relationship, both qualitative and quantitative, to wages, profits and prices; no aspect, no issue, is ignored in these incredibly detailed discussions. So the main line of that argument does not hold up. As for the variant, insofar as it argues that there is a vast difference between the "value" of Smith and Ricardo and the "value" of Marx, it is undeniably correct; where it goes wrong is in jumping from this important fact to the conclusion that Marx either does, or even could ignore the quantitative aspects which dominated the pre-Marxian "value theory".

Consider for a moment the fact that there is a vast difference between Einstein and Newton too, one which stems from different methodologies, different objects of analysis, etc., and extends all the way to differences in concepts and calculations. There is, in other words, what Thomas Kuhn calls a "paradigm break" between the two modes of analysis.<ref group="EN">Kuhn [4]. The term "paradigm break" is used figuratively here. The notion of a break between the problematic of classical economy and that of Marx, which Althusser [1] discusses, is considerably more precise.</ref>

The notion that Einstein and Newton, for instance, treat what appears to be some autonomously defined subject—"Physics"—is an illusion which is fostered by textbook propagandists whose very aim is to treat science as the glorious and lofty march towards "truth". In reality, however, almost every conception and calculation in Relativity Theory contradicts those of classical physics.

To reduce Einstein to a "tidied up" Newton would therefore be impossible. What is worse, this impossibility would show up in the form of "logical contradictions", "redundancies", and "irrationalities" in Einstein, not in Newton, for the propositions derived from the Theory of Relativity cannot be derived within a Newtonian basis. What can we say, for example, in a Newtonian framework about the fundamental Einsteinian notion that there exists a finite limit, the speed of light, for the velocity of any object? Only that it is clearly wrong, or at best, a notion we (as Newtonians) have no use for in our framework—one which therefore appears "mythical", "metaphysical", "irrelevant".

Insofar as some Marxists have pursued a similar line of argument as to the "reduction" of Marx to Ricardo, they have been making an absolutely crucial point: namely, that by attempting to "reduce" Marx to Ricardo, or to neoclassical economics, the impossibility of this reduction will manifest itself as a series of "contradictions" and "irrationalities" in Marx! What we think we find, on a Ricardian or neoclassical basis, is that Marx is simply incorrect, or at best gets involved in an "unnecessary muddle".<ref group="EN">J. Robinson [15], p. xi, and Ch. III, especially pp. 20-22.</ref> What we have in fact demonstrated is that you cannot derive Marx from Ricardo or Samuelson.

Obviously, none of this implies that Marx is above criticism. The point here is that in order to be able to evaluate Marx's solution to some problem, we must first of all define the problem. We must, in other words, ''locate'' the problem in terms of some general analysis, so that we may see which solutions are adequate and which are not. It has often been said that the hardest part of solving a problem is figuring out the question!

Some Marxists, however, jump from the implications of the difference between Marx and Ricardo to the false conclusion that Marx was, or at least that Marxists could be, unconcerned with the quantitative relationships between prices and values (whether he was and whether Marxist analysis could be are in fact two separate issues, but one leads to the other).

To begin with, the statement that Marx did not in fact consider these matters to be important runs headlong into the contrary evidence of the vast amount of attention Marx's writings give to them; the only way to get around this evidence in turn, is to try and show that the issue itself is irrelevant. In this way the real basis of this line of reasoning turns out to be the argument that Marxist analysis can, and should ignore the quantitative relationship. On the one hand, this argument gets much of its impetus from the persistent, and to some extent, damaging attacks on the "transformation from values to prices"; and on the other, it derives much of its appeal from a reaction against the obvious banality of neoclassical economics, in which relative prices figure so prominently. Nonetheless, the argument is simply untenable, for it is based on an ''unspoken'' conception about scientific analysis which when made explicit is quite unsupportable: namely, that as a science, the Marxist analysis of capitalism can simply choose to ignore the quantitative aspects of any phenomena, once it has understood the qualitative aspects. Marx himself had a higher opinion of his work:<blockquote>Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. (''Capital'',<ref group="FN ">All quotes from ''Capital'' refer to the International Publishers edition, New York, 1967.</ref> Volume III, Part I, Ch. I, p. 25) </blockquote>Unfortunately not many Marxists today seem willing to accompany Marx all the way in his arduous journey; and of those that do, even fewer appear to be interested in pulling together and extending, where necessary, the sometimes incomplete analysis of Volume III. The labyrinths of the turnover of capital in Volume II, the "petty detail" of the endless tables of differential rent in Volume III, and certainly the unending controversy about the "transformation problem" must all seem so very tedious, perhaps even dangerously confusing, to those who remain content to bask in the brilliance of Volume I.<ref group="EN">Marxists who attempt to directly apply the abstract categories of Volume I of ''Capital'' are in a sense reverting to a Ricardian methodology. Marx is careful to point out that a basic flaw in Ricardo's method is that he "jumps" directly from the abstract (value) to the concrete (prices of production, rent, taxes) without tracing the intermediate connections. (Marx, ''Theories of Surplus Value'', Part II, Ch. X, Sect. 4.6., p. 191.) It takes Marx three volumes to make that connection!</ref> But Marx at least did not find in the difficulty of a subject a sufficient reason for avoiding it: <blockquote>That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits. (''Capital'', Volume I, "Preface to the French Edition", p. 21) </blockquote>

== II. Value and Price ==

=== 1. Calculation versus Conception ===
I have, up to now, confined myself to a discussion of the so-called "transformation problem" and of various attitudes toward it. It is, however, a major purpose of this paper to demonstrate that one can, ''precisely in the manner set out by Marx'', calculate the "correct prices of production" from values. The link between the two, one so obvious that until recently it seems to have been completely overlooked,<ref group="FN ">The transformation procedure contained in this paper was first presented in a paper delivered to the Graduate Economics Department of Yale University, February 1973. A similar result was presented by Michio Morishima in "Marx in the Light of Modern Economic Theory: An Inaugural Lecture", London School of Economics, November 1973.</ref> is simply that while Marx's procedure is a perfectly general one, it is only the first step in an iterative transformation from "direct-prices" to "prices of production". But while this extension of Marx's procedure does falsify the so-called "impossibility theorems" on it (most recently voiced by Paul Samuelson), it by no means establishes the need for such a transformation in the first place. As has often been pointed out, "prices of production" can instead be calculated directly from the same "economic data" as "direct-prices". The difference between the two methods of calculation therefore lies not in the end point but in the beginning; that is, it lies not in the magnitude of "prices of production" but in their meaning, in their conception. To reduce the issue of the transformation to one of merely calculation, is simply to reduce Marx to neoclassical economics. And, as I pointed out earlier, the impossibility of such a reduction can only "show up" as a "redundancy" in ''Marx'': after all, if both methods arrive at the same end point, why bother with Marx's needless "detour" through values?

The question may be put more precisely: in what way is Marx's analysis of value different from that of orthodox economics? What sorts of issues, conceptions, and calculations are specific to it alone? What laws does Marx derive from it which cannot be derived from conventional economic analysis? Unless we make an attempt to answer these questions, any discussion of the "transformation" issue is quite irrelevant: without a proper understanding of the concept of value as it appears in Marx, it is pointless to try and analyze the so-called "transformation from values to prices of production". The discussion of the actual transformation algorithm is therefore postponed until Section III. In this section we must establish its ''raison d'etre''.

=== 2. Basic Method ===
<blockquote>Whatever the social form of production, labourers and means of production always remain elements of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another. (''Capital'', Vol. II, Ch. I, Section I, p. 34.)

The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers... which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. (''Capital'', Vol. III, Ch. XLVII, Section II, p. 791.) </blockquote>The preceding quotes present a crucial element of the Marxist approach to history: namely, that the specific manner in which production is organized, and surplus-labor extracted from the direct producers, forms the "hidden basis of the entire social structure". For Marx, it follows from this that the concepts adequate to the analysis of any specific historical epoch, including that of capitalism, must necessarily be based on these aspects of its social practice. The struggle for production is the fundamental social practice in all human society; hence the analysis of production is the beginning point of Marxist analysis. The extraction of surplus-labor is the basis of all class societies; hence its study is the source of the concepts adequate to an analysis of all class societies. ''Capital'' is Marx's application of this approach to the analysis of capitalism.

=== 3. The Production of Commodities ===
One very important aspect of the social process in which laborers and means of production are united in the ''capitalist'' mode of production, as opposed to all others, is that under the capitalist mode the overriding aim of production is not production-for-direct-social-use but production-for-exchange. In the caste system of India, for example, the social regulation of productive activity is made starkly visible by the existence of hereditary castes whose members can, and in fact must, perform only those concrete types of labor which are required of their caste. Production is, in this society, production-for-direct-social-use (whatever we may think of that use); distribution of the products of labor is similarly directly regulated.

But in capitalism, we have commodity production. What turns a product (something which is produced) into a commodity (something which is bought and sold) is a specific set of social structures which organize the productive activities (the labor) of society around production-for-exchange. In commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction. Society is organized in such a way that there is no ''direct'' social regulation of productivity activity: during production people act as individuals, relating only to their products; it is in exchange, therefore, that the true social nature of their existence is forcibly demonstrated to them through the relation of their commodities to those of others. Exchange, so to speak, is a "symptom" of commodity production, and its real limits can only be understood by relating exchange to its "hidden basis"—i.e., to production. It follows, therefore, that in a Marxist analysis the derivation of the categories of exchange, such as money and price, as well as their movements, must necessarily be based on the categories of production. Taken by itself, as an eternal category divorced from any particular type of production, exchange appears to be a smooth, static, inherently equilibrating process: witness the parables of neoclassical economics. Circulation is, to all appearances and purposes, the sphere of freedom, equality and equilibrium. But for Marx, circulation is precisely the sphere in which the contradictions inherent in the production of commodities are "both exposed and resolved";<ref group="EN">K. Marx, ''A Contribution to the Critique of Political Economy'', p. 86.</ref> the manner in which these contradictions in production dominate exchange, both qualitatively and quantitatively, is what Marx means by the law of value: "in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time necessary for their production forcibly asserts itself like an overriding law of Nature".<ref group="EN">Marx, ''Capital'', Vol. I, Ch. 1, p. 75.</ref>

=== 4. Exchange-Value and Value ===
In all production, concrete (i.e., specific) types of labor and concrete inputs result in a concrete product. Moreover, since the produced inputs themselves must be the products of past labor, we may say that in all production, including commodity production, concrete products are the results of concrete labors, in a given natural context.<ref group="EN">''Ibid''., p. 43.</ref> But commodity production (the production of goods-for-exchange) necessarily implies exchange; and in exchange the distinct qualities which give various commodities their "concreteness" are abstracted from. In exchange, what matters is not the physical properties of iron but how much wheat, or cloth, or coffee, etc., we can get for the iron; hence in exchange we treat every commodity not as a concrete bundle of distinctive qualities, but as the equivalent of specific ''quantities'' of all other commodities.

Precisely because exchange is a social process which quantitatively compares and equates different products, it is only in those societies which produce for exchange that the product of human labor acquires the property of "quantitative worth". In addition to being useful, they are now also "valuable": they are commodities.

We have to get a little more exact in our terminology at this point. In conventional usage (and with some classical economists), the term "value" sometimes refers to the notion of a useful object, and at other times to the notion of the "quantitative worth" of an object. In order to avoid confusion, therefore, Marx uses the term ''use-value'' to mean useful object, and the term ''exchange-value'' to mean the quantitative "worth" of an object. In Marx's terminology, therefore, a commodity is both a use-value and an exchange-value.

It is usually not difficult to explain what is meant by a useful object.<ref group="FN ">The apparent simplicity of the term useful object or use-value is misleading. Many Marxists, for instance, confuse it with physical object, i.e., a good as opposed to a service. This is definitely not the sense in which Marx uses the term use-value.</ref> But when we say that a commodity is "worth" something just what is implied? Suppose I say that in barter a bushel of corn is "worth" a ton of iron, and also a yard of silk, and an ounce of gold, and so on. At first glance, what I appear to be saying is that there are many different quantitative expressions for the "worth" of a bushel of corn, depending on which other commodity (iron, silk or gold) I choose to ''measure'' it by.

But there is a deeper problem here. In order for me to measure the "worth" of corn in terms of gold, for instance, gold must also be "worth" something itself. Otherwise I cannot say how much gold is equivalent to a bushel of corn. It is just like my saying that a stone "weighs" ten grams; what I mean is that on a scale it takes ten pieces of iron called gram-weights to equal the weight of the stone. But clearly, in order for me to carry out this operation, both stone and iron must already possess the property of being "heavy", of having "weight"; the gram-weights don't make stones "heavy", they only measure the already existing heaviness of stones.

Exactly the same conclusion applies to "quantitative worth". The factors which cause commodities to have "quantitative worth" in the first place must be carefully distinguished from the measurement of this "worth". Measuring the "worth" of corn in iron will give a different result from measuring it in gold; but neither measure causes corn to have "quantitative worth". Rather, each merely expresses the preexisting "worth" of corn in terms of some particular commodity.

The question of exchange-value ("quantitative worth") is therefore really a twofold one: first, what is the cause of "quantitative worth"; and second, how is this "worth" actually expressed, measured, in exchange?

If we look at society as a regularly reproduced set of social relations, it becomes very clear that the production and reproduction of the masses of useful objects which correspond to various social needs requires a definite, quantitative distribution of social labor. Each different useful product requires a concretely different type of labor; reproduction of the material basis of the society consequently requires the existence and reproduction of appropriate amounts of different concrete labors. That is to say, social labor from the point of view of its capacity to produce different use-values is what Marx calls social labor in its role as ''concrete'' labor.<ref group="EN">''Ibid''., p. 46.</ref>

A commodity, however, is more than a mere use-value; it is at the same time an exchange-value, an object possessing "quantitative worth". It follows from this that the very same social relations which endow use-values with the property of "quantitative worth", endow the labor which produces these use-values with the capacity to create "quantitative worth". From this point of view, all commodity producing labor is qualitatively alike and quantitatively comparable: it is what Marx calls "(commodity producing) social labor in its capacity as ''abstract'' labor".<ref group="EN">The distinction between concrete labor and abstract labor is similar to (though distinct from) the distinction between productive and unproductive labor. In both cases, the properties of Value and surplus-Value lie at the heart of the matter.</ref>

Therefore, to the question on the cause of exchange-value, Marx's answer is: abstract labor, i.e., <s>labor actually engaged in commodity production</s>,<ref group="CN">El trabajo abstracto no es "el trabajo efectivamente empleado en la producción de mercancías". En la producción de mercancías se emplea trabajo, y este a su vez tiene un ''carácter'' doble: abstracto y concreto. En la práctica, estos no pueden separarse puesto que ocurren en simultáneo y se implican mutuamente. </ref> is the cause of exchange-value.<ref group="EN">Marx [10].</ref> Moreover, if we consider the production of a commodity from the point of view of the whole society, it becomes apparent that the commodity's exchange-value represents the total amount of abstract labor-time socially necessary<ref group="EN">Marx uses the term "socially necessary labor-time" in two senses. First, the average quantity of abstract labor-time required to produce a single commodity; this determines the magnitude of its Value (''Capital'', Vol. I, Ch. I, p. 39). Second, the total quantity of labor-time which would be required to produce a given type of commodity in the amount consistent with effective demand; if the actual quantity of labor-time, and hence the actual amount of the product, deviates from the above necessary amount, the market-price of the commodity would deviate from its regulating price. (''Capital'', Vol. III, Ch. xxxvii, p. 635). The first sense of socially necessary relates the commodity to its conditions of production. The second sense relates the mass of commodities to the expressed social need for them.</ref> for its production, both directly (in the process of producing the commodity from its material inputs) and indirectly (in the process of producing the material inputs themselves, and the inputs of the inputs, and so on). Marx consequently refers to this total sum of abstract labor-time as the ''immanent measure'' of a commodity's exchange-value, what he calls its "Value".<ref group="EN">"... he [Adam Smith] confuses—as Ricardo also often does—labour, the intrinsic measure of value, with money, the external measure . .. (Marx, ''Theories of Surplus-Value'', Part II, Ch. xv, Section 2, p. 403).</ref>

The discerning reader will have noticed that I have capitalized the term Value. This is done in order to emphasize the distinctiveness of Marx's use of the term, and especially to avoid confusing it with the term "value" in orthodox economics (where it generally refers to a price of some sort).

It should also be noted here that the Value of a commodity is the ''average'' amount of abstract labor-time required for its production. The total output of a particular commodity represents<ref group="FN ">The term "represents" is used here rather than the more common term "embodied". It is clear in Marx, for instance, that it is not the historical cost of a commodity in labor-time, but rather its current cost of reproduction, which determines the magnitude of a commodity’s Value. (''Capital'', Vol. I, Ch. 1, p. 39). As such, it is not a question of the labor-time "embodied" in a commodity but of the social cost which the current production of the commodity entails.</ref> the expenditure of a certain amount of abstract labor-time which under existing conditions is required for its production. In exchange, however, all commodities of a given type are treated alike; each commodity is merely "an average sample of its class",<ref group="EN">Marx, ''Capital'', Vol. I, p. 39.</ref> and as such represents the average expenditure of abstract labor-time.<ref group="EN">The amount of labor-time socially necessary for the production of a commodity is determined by the average conditions of production of the average commodity. If the average conditions are altered, as in Marx's example of the introduction of power looms in weaving, then though existing cloth may have required more time than this new average, the magnitude of its value is still determined by the current average, precisely because all cloth of a given quality is treated alike in exchange. Similarly, if hand-loom weavers continue to hang on, then even though it may take them twice as long as the average to produce a bolt of cloth, the value of the cloth is nonetheless determined by the average. See Footnote 13 above, also.</ref>

In order to avoid confusion later on, I will distinguish between the ''sum of Values'' (the abstract labor-time required to produce the total social product<ref group="FN ">I refer here only to the total ''commodity'' product. Use-values produced for direct use are not treated here, in spite of their great importance in concrete analyses of actual capitalist societies. Marx himself distinguishes between social capital and social wealth "of which capital is only a part". (Marx, ''Capital'', Vol. I, Ch. X, p. 200).</ref>), the ''total Value'' of a given branch of production (the Value of its total output),<ref group="EN">The total social product is usually defined to include only the commodities newly produced in the given period of time. However, the existence of durable commodities implies that in any given period, commodities and inventories of unsold products may enter exchange as commodities even though they have not been produced in that period. In the treatment of fixed constant capital, for instance, this issue becomes important. Marx himself suggests in the treatment of fixed constant capital that the portion which is not used up in the process of production should be counted as part of the annual product (''Capital'', Vol. I, Ch. IX, p. 213). Properly speaking this treatment of fixed constant capital requires Marx's theory of rent, and for that reason is not developed in this particular paper. It should be noted, however, that a Marxian treatment of this issue will not be identical with the von Neumann-Sraffa "joint product" approach.</ref> and the ''unit Value'' of a single commodity (the average Value in the sense defined above). All terms are defined over a given period of time.

=== 5. Money and Price ===
We turn now to the second aspect of exchange-value: how is "quantitative worth" actually expressed in exchange? To this Marx answers: in exchange, the "quantitative worth" of a commodity ''must'' take the form of money-price. Since exchange is the interchange of two commodities, at first glance it seems obvious that there are as many measures of a commodity's worth as there are other commodities to measure it by. And historically, where exchange is sporadic or irregular, this is in fact true. But as exchange spreads and develops, this variety of different possible measures increasingly becomes a barrier to the smooth functioning of the process; without a point of reference, the direct comparison of every commodity with every other becomes impossibly complex. Consequently it becomes increasingly necessary to socially recognize a given commodity out of those available as the one commodity in which all others are to express their "worth"; this special commodity therefore becomes the universal equivalent, the money-commodity. We will henceforth assume it is gold.<ref group="FN ">It is beyond the scope of this paper to discuss the different forms of money such as token money (metallic and paper tokens of gold and silver) and credit money. In any case, this extension of the analysis cannot be attempted without first resolving it satisfactorily in the simplest case—that of pure gold-money.</ref>

Notice that money does not by itself cause commodities to have "worth", any more than gram-weights cause stones to have weight. On the contrary, it is only because both gold and the other commodities have "quantitative worth" (exchange-value) in the first place that we can express their worth of commodities in terms of gold. The money-price of a commodity is the "golden" reflection, the external measure, of its exchange-value. It is what Marx calls the ''form'' taken by Value during exchange.<ref group="EN">Marx, ''Capital'', Vol. I, pp. 47-48.</ref>

=== 6. Production and Circulation ===
The foregoing analysis has focused on the difference between Value and money-price. Implicit in this distinction, however, is another equally important one: the Marxian distinction between the production of commodities and their circulation.

Production, Marx notes, is the creation or transformation of a use-value.<ref group="EN">Marx, ''Capital'', Vol. I, Ch. VII, Section 1.</ref> Insofar as the product is a commodity, it belongs to some individual; it enters circulation, therefore, as private property.

Consider the case of two commodity producers, a fisherman and a hunter. They bring definite quantities of fish and game, respectively, to the market for the purpose of exchange; commodities with definite Values representing definite quantities of abstract labor-time thus enter the market-place.

Now what happens in exchange? In the exchange process the two commodity producers negotiate terms under which they will ''transfer the titles'' to their respective commodity property.<ref group="EN">Marx, ''Capital'', Vol. II, Ch. VI, Sect. I and Sect. III, p. 149.</ref> But note: the time they spend bargaining over these terms of trade will in no way increase the total amount of fish or game to be had; it will determine only the final pattern of distribution.<ref group="EN">''Ibid''., pp. 129-130.</ref> In fact, insofar as they need to subsist during the actual process of exchange itself, their...<blockquote>...costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third [person to perform] these exchanges, and thus lost no labour time directly, then each of them would have to cede a proportional share of his product to [that third person]...

Circulation costs as such, i.e. consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange..., are therefore a deduction either from the time employed on production, or from the values posited by production. ''They can never increase the value''. They belong among... the inherent costs of production resting on capital. (Marx, ''Grundrisse'', Notebook VI, pp. 632-633. Emphasis added) </blockquote>This is a very important point in Marx's analysis. The circulation process is the process whereby commodities change hands, where their titles of ownership are transferred. As such, no commodities and hence ''no Value is created in the circulation process''.<ref group="EN">''Ibid''., Ch. V, p. 127. Of course, the circulation process adds to the money price of a commodity. As long as Value and price are kept conceptually separate, this presents no problems at all.</ref> If anything, part of the previously produced mass of commodities (and hence the Value previously created in production) may be used up just in the struggle over its distribution.

One immediate implication of this is that the categories of circulation are thereby limited by those of production.<ref group="FN ">Another implication is that not all labor-time, even if it stems from wage labor employed by capitalists, leads to the creation of Value, This has been a perennial topic of discussion in Marxist literature under the heading of productive and unproductive labor. Though we cannot treat it here, it is important to note that it arises from the distinctive character of the Marxian concept of Value.</ref> Value is created in production, materialized in commodities; ''regardless of the actual money prices at which these commodities are sold'', only the same mass of commodities (and hence the same amount of Value) exists after the sales as before. Different price relations will therefore give rise to different distributions of the total commodity-product, and of the total sum of Values, but they cannot by themselves change these totals. It is on this basis that Marx argues: <blockquote>If commodities are sold at their values, then the magnitude of value in the hands of the buyer and seller remains unchanged. Only the form of existence of value is changed. If the commodities are not sold at their values, then the sum of converted values remains unchanged; the plus on one side is a minus on the other. (Marx, ''Capital'', Volume II, Ch. VI, Section 1.1, p. 129) </blockquote>

=== 7. The Importance of Prices ===
In commodity producing societies the object of production is not direct use, but personal gain through exchange. Individuals produce without any apparent social regulation. Nonetheless, they too exist within a social structure. For each individual to be able to specialize in producing for exchange, others must do so too; for exchange to proceed without rupture, the various products must correspond to the various social needs. Since under this form of social organization the correspondence between the various social needs and the distribution of social labor required to satisfy these needs cannot be brought about directly, it must be done indirectly. What in other societies is a direct evaluation of the importance of a particular type of labor in terms of its concrete product, becomes in commodity producing societies the indirect evaluation of this labor—through the "quantitative worth" of its product. It is only in exchange that the true social nature of commodity production is made apparent; and precisely because commodity production is undertaken for personal gain, for the money which is to be made, ''it is the money-prices of commodities that serve as the immediate regulating mechanism of the system''. Far from being a "veil", money constitutes a very important feedback mechanism.

It follows from the above that the laws which determine money magnitudes such as prices, profits, and wages, are of the utmost importance in understanding the laws of motion in capitalism.<ref group="FN ">The problem that Marx set himself in Capital was to "lay bare the economic law of motion of modern society". [EN 23] But why this task? Because he knew only too well that in order to change the world it is necessary to first understand it. In particular, he knew that without an adequate understanding of how the capitalist system operates, of the manner in which its underlying contradictions give rise to the phenomena of regular and violent crises, of increasing wealth alongside increasing misery, of rising productivity which leads to falling profitability, and many others—without an adequate understanding of these laws of capitalism, attempts to change it would be doomed to failure.</ref><ref group="EN">Marx, ''Capital'', Vol. I, "Preface to the First German Edition", p. 10.</ref>

Now of course it was known well before Marx's time that supply and demand were the immediate determinants of actual market phenomena. But even classical political economy was aware that over the course of time the ceaselessly fluctuating interplay of supply and demand was itself regulated by a much more fundamental principle: the Law of Equal Profitability.

For instance, if as a result of market conditions a particular sector's rate of profit rose above the average rate, then the flow of capital would tend to be biased towards that sector, causing it to grow more rapidly than demand, and driving down its market price to a level consistent with average profitability. Conversely, the sectors with low profitability would tend to grow less rapidly than demand, causing their prices and profitability to rise.

The classical economists were thus able to demonstrate that behind the continuously varying constellation of market prices there lay another set of prices, acting as "centers of gravity" of market prices and embodying more or less equal rates of profit. The name given to these regulating prices in classical political economy was natural prices; Marx calls them prices of production. Their discovery was the first great law of prices.

By David Ricardo's time, the problem had moved on to a higher level. What Ricardo sought to do, for instance, was to go one step further and look behind prices of production themselves, to discover ''their'' "centers of gravity". That is, just as the market price of a commodity was shown to be regulated by its price of production, Ricardo sought to show that this regulating price was itself subject to a hidden regulator—the total quantity of labor time required to produce the commodity, both in its direct production and in the production of its means of production. <blockquote>In speaking... of the exchangeable value of commodities, or the power of purchasing possessed by any one commodity, I mean always that power which... is natural price. (D. Ricardo, 1962, p.92)

The great cause of the variation in the relative value of commodities is the increase or diminution in the quantity of labour required to produce them. (''Ibid''., p. 36) </blockquote>There we have it: the ''great'' cause of the variations in the (relative) price of production of a commodity is the variations in the total labor time that goes, directly or indirectly, into its production. The total quantity of labor time was the center of gravity of the commodity's price of production, just as this price of production was itself the center of gravity of its market price. This was Ricardo's attempt to formulate a second great law of prices.

What Ricardo perceived was that there was an intrinsic connection between the "quantitative worth", the exchange-value, of commodities, and the total labor-time required for their production.<ref group="EN">Marx, ''Theories of Surplus-Value'', Part I, pp. 164-167.</ref> This, according to Marx, was Ricardo's great scientific merit.<ref group="EN">''Ibid''., p. 166.</ref> But at the same time Ricardo was trapped by the conceptual framework of bourgeois political economy, which saw all production as being alike. He was consequently unable to distinguish concrete labor, an aspect of all social production, from abstract labor, an aspect which only commodity producing labor takes on. Ricardo therefore misses the difference between Value and the form of Value. Instead of recognizing price as the manner in which the exchange process reflects Value, and developing the various intermediary links between the two, he attempts instead to fuse them together through his law of prices. His failure to adequately distinguish between Value and price is, according to Marx, the first great source of error in his analysis.<ref group="EN">''Ibid''., Ch. X, Section A. See also pp. 106, 164, 174-176.</ref>

In addition to that, however, there is another problem. How can Ricardo attempt to analyze the effects of a uniform rate of profit on prices, asks Marx, when he nowhere discusses what determines the ''level'' of this rate of profit? And this in turn leads to an even more basic question. A uniform rate of profit is simply a way of saying that profits on different capitals are proportional to the size of these capitals: that is, each capital gets a share of total profit in proportion to its own size. But Ricardo nowhere discusses what determines aggregate profit in the first place. How then can he attempt to isolate the factors which regulate the movements of prices of production when he is missing a crucial ingredient—profit?

It is therefore apparent to Marx that even given the relation between Value and money price which he himself derives,<ref group="EN">In ''A Contribution to the Critique of Political Economy'' [7], Marx begins by assuming that commodities exchange at Values, and then poses a series of objections to this assumption as a challenge to his own beginning. Of these, the "last and apparently the decisive objection" has to do with the fact that commodities with no Value can possess exchange-value. This problem, he says, "is solved in the theory of rent". (pp. 61-63)</ref> the specific manner in which Value regulates price cannot be developed without first showing how profit arises. And this, as we shall see next, leads Marx to the concept of surplus-Value.

== III. Surplus-Value and Profit ==

=== 1. The Circulation of Money and the Circulation of Capital ===
We have up to now focused on the relationship of the circulation of commodities to their production; on the basis of this we were able to derive the categories of Value, money, and price, and discuss their mutual interrelationship. But the very existence of the circulation of commodities within a capitalist mode of production immediately implies that, for those who function as capitalists, the process of circulation is itself a means to realizing a profit: where then does the profit of the capitalist class as a ''whole'' come from?

Marx begins by noting that once we consider commodity production within the context of capitalist production, the overall process of circulation is in reality two different processes with different functions and hence different laws. In the first process, the owners of commodities (<math display="inline">CC</math>) exchange them for money (<math display="inline">M</math>) in order to be able to use this money to buy other commodities (<math display="inline">CC</math>) for the purpose of consumption.<ref group="FN ">Marx uses the symbol C to represent commodities (as in M->C->M') and also to represent constant capital (as in C + V). In order to avoid any possible misunderstanding, I will use "CC" for the former and "C" for the latter.</ref> This circuit in the overall circulation process therefore has the form <math display="inline">CC \rightarrow M \rightarrow CC</math>, and is the aggregate of the exchanges of one set of commodities for what is, under the existing conditions of exchange, an equivalent set. In this process money is an intermediary between two sets of commodities; once acquired it is spent, and for the individuals involved in it, the process terminates in consumption. Marx calls this "selling in order to buy";<ref group="EN">Marx, ''Capital'', Vol. I, Ch. IV, p. 147.</ref> in it, money functions as money only.

In the second circuit, however, the owners of money (<math display="inline">M</math>) exchange it for commodities (<math display="inline">CC</math>) in order to get more money (<math display="inline">M' = M + \Delta M</math>), i.e., in order to make a profit <math display="inline">\Delta M</math>. Money here is not spent, it is merely ''advanced'' in order to make more money, through the intervention of commodities. The process of <math display="inline">M \rightarrow CC \rightarrow M'</math>, tends to be self-perpetuating, since it can always lead into <math display="inline">M' \rightarrow CC \rightarrow M''</math>, etc. The initiators of this process function as capitalists: <math>M \rightarrow CC \rightarrow M'</math> "is therefore in reality the general formula of capital as it appears ''prima facie'' within the sphere of circulation".<ref group="EN">''Ibid'', p. 155.</ref> Marx calls this second process "buying in order to sell";<ref group="EN">''Ibid''., p. 147.</ref> in it, money functions as ''capital''. It makes a profit. But how is it possible to make money by merely advancing money?

=== 2. Surplus-Value ===
The first step in the solution to the problem of profit is to recognize that it is not simply a question of money. Money, after all, represents a command over actual commodities, and hence over the actual labor-time materialized in them. If therefore in the circuit <math display="inline">M \rightarrow CC \rightarrow M + \Delta M </math>, the profit of the capitalist class (<math display="inline">\Delta M </math>) is to be something more than a monetary illusion, if it is to represent a potential increment in their real wealth, then ''their money profit <math display="inline">\Delta M </math> must itself be matched by an actual increment in the commodities available, and hence in materialized labor-time''. That is, <math display="inline">\Delta M </math> must be matched by an increment in the total Value of the commodities represented by <math display="inline">CC </math>. This increment in Value necessary for any real profit, Marx calls surplus-Value.

=== 3. Constant Capital ===
Ostensibly, the process of the formation of capital, as represented by <math display="inline">M \rightarrow CC \rightarrow M'</math>, is a process occurring wholly within circulation. But Value is itself a result of production; it cannot be created in circulation, and hence neither can the necessary increment in Value, surplus-Value. Surplus-Value, if it is possible at all, can only arise from production. And indeed, if we examine <math display="inline">M \rightarrow CC \rightarrow M'</math> more carefully, we find that the first stage involves the purchase of human and nonhuman inputs required for production, whereas the final stage involves the sale of the outputs of production. The commodities purchased as inputs and the commodities sold as outputs are in fact not the same, and it is the intervention of ''production'' which distinguishes them. The formation of capital, which appears to exist solely within circulation, in reality encompasses a process of production; properly speaking, it should be represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, with the stage <math display="inline">CC ... P ... CC' </math> representing the effect of production. Not just production or even just commodity production but, as we shall see, capitalist commodity production.

Means of production and laborers combine in all production. But in commodity production, the means of production are themselves commodities, and as such represent, in their total Value, the quantity of abstract labor-time that was socially necessary for their own production. If we examine the process of production over a period of time sufficiently long so that even the most durable means of production are entirely used up, then it becomes clear that the Value of the means of production must become incorporated into the commodities produced over this period. The bodily forms of the means of production either wear out (as with machines) or are physically incorporated into the product (as with raw materials); but precisely because these means of production are socially necessary under existing conditions, the abstract labor-time represented by them is also (indirectly) socially necessary for the production of the commodities. It is a necessary component of the total Value of the product. From the point of view of Value, therefore, the means of production only contribute as much Value as they actually contain. As such they cannot be the source of the increment in Value upon which any nonillusory aggregate profit must be based; Marx therefore calls the capital advanced in the form of the means of production "constant capital".

=== 4. The Value of Labor-Power ===
The formation of capital, the process represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, presupposes not just commodity production but capitalist commodity production. And under capitalist commodity production, not only are the products of labor bought and sold as commodities, but so too is the very capacity-to-labor itself.

This capacity-to-labor, which Marx calls labor-power, is "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description".<ref group="EN">''Ibid''., Ch. VI, p. 167.</ref> In all societies, it is the basis of the productive activities of human beings; but for this fundamental human property to become a thing to be bought and sold, a commodity, it must exist within a specific social context. Not only must the laborer have the legal title to his labor-power, he must also be obliged to sell it and not other commodities. He must be free not only to dispose of his own labor-power as a commodity, but also "free" of the means of production which might enable him to be a producer of other commodities. He must be a wage-laborer.

The Value of the commodity labor-power, like that of every other commodity, is determined by the abstract labor-time socially necessary for its production under existing conditions. Since labor-power is a capacity of living beings, its production implies their continued maintenance and reproduction; hence it implies a given quantity of commodities as means of subsistence, sufficient not only to maintain laborers in their normal state as laborers but also sufficient to support their families so that they may as a class continue to perpetuate themselves.<ref group="FN ">As in the case of every other commodity, the value of labor-power is given by the average labor-time required to produce the average quantity of means of subsistence of the average labor-power, under existing conditions. But for simple, unskilled labor-power, these existing conditions are themselves "the product of historical development, and depend therefore to a great extent on the degree of civilization of a country... In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known". (Marx, ''Capital'', Vol. 1, Ch. VI, p. 171).

The issue of skills requires further treatment which cannot be undertaken here. See instead Shaikh [19], Rowthorn [16].</ref> The Value of the means of subsistence of the total workforce is therefore the abstract labor-time socially necessary for their maintenance and reproduction, and hence is the measure of the Value of their labor-power (<math display="inline">V</math>).

When a capitalist purchases the commodity labor-power, he purchases the capacity-to-labor of workers, and in order to utilize this commodity he must extract as much labor-time from these workers as he can. The concrete functions that workers perform in their productive activities involves the transformation of the means of production into specific commodities; as such, the time spent by workers in these activities is itself a quantity of socially necessary abstract labor-time (<math display="inline">L</math>), which is in effect incorporated into the commodities. From the social perspective of Value, therefore, workers add a quantity of Value (<math display="inline">L</math>) to the Value (<math display="inline">C</math>) contained in the means of production they use up.

=== 5. Surplus Labor-Time ===
Capitalist production begins with the commodities <math display="inline">CC</math>, means of production and labor-power; as commodities they represent a definite quantity of Value, <math display="inline">C+V</math>. In a period of time sufficiently long, the entire Value <math display="inline">C</math> of the means of production will be ''transferred'' to the product. On the other hand, the Value <math display="inline">V</math> of labor-power employed in this period is ''replaced'' with the Value added to <math display="inline">L</math> by workers in the form of the amount of labor-time they actually spend in production. Thus while the Value of the initial commodities is <math display="inline">C + V</math>, the Value of the final product is <math display="inline">C + L</math>. The formation of capital, which we have represented as <math display="inline">M \rightarrow CC ... P ... CC \rightarrow M + \Delta M </math>, can therefore also be represented by <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M + \Delta M</math>. Clearly, ''surplus-Value, the Value increment <math display="inline">S =(C+L)=(C+V)=L-V</math> which is necessary to match the money increment <math display="inline">\Delta M</math> can arise if and only if the labor-time (<math display="inline">L</math>) put in by workers is greater than the labor-time (<math display="inline">V</math>) socially necessary for their reproduction''.

The same result can be derived differently. Imagine for a moment that at any given level of technology, workers in all branches of production work just long enough to produce the commodities necessary for the needs of the working class as a whole and to replace the means of production they use up in this process. Under these circumstances, no matter how "advanced" the technology, there can exist no social surplus, and hence no basis for capitalist profit. If, and only if, workers can and actually do work longer than the time necessary to maintain themselves and the means of production, will there arise a continuing social surplus; the time spent by workers in producing this surplus, their surplus labor-time, is therefore the real basis of capitalist profit. And of course since the necessary labor-time described above is none other than the aggregate value of labor-power <math display="inline">V</math>, the surplus labor-time is none other than aggregate surplus-Value <math display="inline">S</math>.<ref group="EN">If workers work only long enough to produce their means of subsistence and the commodities necessary to replace the means of production used up, then the only final (net) outputs of the system are the means of subsistence. As such the total time put in by workers is the time directly required to produce the means of subsistence, plus the time directly required to replace the means of production used up in producing these means of subsistence. But the latter time is also the time indirectly required to produce the means of subsistence: hence the total time they work is the sum of the direct and indirect labor-time necessary to produce the means of subsistence—which of course is by definition the (labor) Value of these commodities, and hence the (labor) Value of the labor-power which is reproduced through their consumption.

Similarly, any surplus labor-time they work over and above this necessary labor-time is the labor Value of the surplus-product, surplus-Value.</ref> Once again we see that surplus-Value is the "hidden basis" of any real capitalist profit.

None of this, by the way, implies that Marx intended the labor theory of value as a theory of property rights, ''à la'' Locke or even Proudhon. Marx's goal was a scientific analysis of capitalism, not a mere moral critique.<ref group="EN">See Meek's discussion of this (false) issue in [12], pp. 215-225.</ref>

== IV. The Transformation from Direct Prices to Prices of Production ==

=== 1. Exchange at Values: Direct Prices ===
In the Marxist conception of exchange-as-the-circulation-of-commodities, the total labor-time materialized in commodities during their production is the basis for their exchange-value and money-price, while the surplus labor-time materialized in them is the basis of the capitalist profit to be realized from their sale. Without a proper understanding of the quantitative and qualitative relationships between the sphere of production and the sphere of circulation, of the ''limits'' imposed on circulation by production, the laws of circulation must remain a mystery. Neoclassical economics is a testament to this.

For Marx, it was absolutely critical that the dominance of production over circulation be properly understood. It is in production that capitalist wealth is created and expanded, and Value and surplus-Value are materialized in commodities. Circulation, as we have seen, is the process whereby the previously created use-values are transferred from one hand to another, by means of money-prices.

Two things follow from this. First of all, it is in circulation that the Value magnitudes take their money-forms: Value takes the form of money-price, surplus-Value the form of money-profit; and secondly, neither Value nor surplus-Value are created in circulation, precisely because in this process commodities are merely exchanged, not created. This means that regardless of the actual money-prices involved, there can be no ''real'' increase in capitalist wealth through circulation.

It is obvious that the most direct way to explore the production and expansion of capitalist wealth is to assume that exchange takes place in proportion to the Values of commodities, so that the money-price of every commodity is equal to its Value relative to the Value of the unit of money (say one ounce of gold). I will henceforth call prices so determined "''direct prices''".

When indeed the analysis is begun this way, as Marx does in Volumes I and II of ''Capital'', it becomes clear that none of the basic categories of capitalist circulation, the categories of capital and labor, money and price, and wages and profits, owe their existence to any ''deviations'' of relative prices from relative Values. <blockquote>The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents... the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not be interfered with by disturbing circumstances that have nothing to do with the process in question. (''Capital'', Vol. I, Ch. V, p. 166, text and footnote 1.)</blockquote>

=== 2. The Conceptual Basis for Prices of Production ===
There is yet another reason for beginning with direct prices (exchange at values): the major ''systematic'' deviation of relative prices from relative Values arises when commodities exchange at "prices of production". But prices of production are prices which reflect a general rate of profit; and a general rate of profit in turn presupposes the existence of profits. Prior to any question about the formation of a general rate, therefore, is the question about the source of profit.<ref group="EN">Marx, ''Capital'', Vol. III, Ch. IX, p. 157.</ref> This question leads Marx to surplus labor-time and hence to surplus-Value, and once again the analysis comes to Value.

The path from Value back to price of production involves two major steps. First, one must examine and understand prices and profits in general; this was done through the analysis of the relationship of production to circulation, and of the relationship of Value to money. Second, since prices of production must reflect a general rate of profit, one is led to an analysis of the formation of this general rate out of the individual rates of profit in each sector of production. We turn to this now.

Let us recall that the general process for the formation of capital could be written as <math display="inline">M \rightarrow C+ V ... P ... C+L \rightarrow M'</math>, where M is the money price of commodity inputs into production: the means of production having the Value <math display="inline">C</math> and labor-power having the Value <math display="inline">V</math>. <math display="inline">M'</math>, on the other hand, is the money price of the commodity outputs of production; their total Value is <math display="inline">C + L</math>. By definition, <math display="inline">S=L-V</math>.

In money terms, the general money rate of profit is <math display="inline">r = (M' - M)/M</math>, the aggregate profit <math display="inline">M'- M</math> divided by the capital advanced <math display="inline">M </math>. In terms of Value, the general ''Value'' rate of profit is <math display="inline">\rho = S/(C+V)</math>, the aggregate surplus-Value <math display="inline">S </math> divided by <math display="inline">C+V</math>, the Value of the inputs. Obviously, if prices are proportional to Values, then the general money rate of profit must equal the general Value rate of profit: <math display="inline">r = \rho </math>.

We now consider two individual circuits of capital involving sectors of production I and J, as represented by <math>M_i \rightarrow (C_i+ V_i) ... P ... C_i + L_i \rightarrow M'_i </math>; and <math display="inline">M_j \rightarrow (C_j+ V_j) ... P ... C_j + L_j \rightarrow M'_j </math>, respectively. If prices are proportional to Values, then in each sector the sectoral Value and money rates of profit are the same. We need therefore deal only with the Value rates <math>\rho_i = S_i/(C_i+V_i)</math> and <math display="inline">\rho_j = S_j/(C_j+V_j)</math>.

The first question we must then ask is: are these two Value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> generally equal? For ''if'' they were, then at prices proportional to Values each sector would have the same money and value rates of profit, and no movement of prices would be necessary to equalize the individual rates of profit. To facilitate the answer, Marx rewrites each expression for the value rate of profit by dividing both the numerator and denominator of each fraction by the Value of labor-power V:

<math display="block">\rho_i = \frac{S_i}{V_i} \bigg| \frac{C_i+V_i}{V_i} \qquad \text{and} \qquad \rho_j = \frac{S_j}{V_j} \bigg| \frac{C_j+V_j}{V_j}</math>

Each Value rate of profit is therefore itself the ratio of two component ratios: <math display="inline">S/V</math>, which Marx calls the rate of surplus-Value, and <math display="inline">(C + V)/V</math>, which he calls the organic composition of capital. We will deal with each in turn.

==== ''A. The Equality of Rates of Surplus-Value'' ====
For society as a whole in any given period, the productive activities of workers may be viewed as a certain aggregate quantity of labor-time <math display="inline">L</math>. But the very fact that the concrete labor-times of different workers can be added together requires that they have already in some way been made qualitatively equal, that they have been reduced to quantities of some ''general'' social labor-time, what Marx calls "abstract" labor-time. This reduction of concrete labor-times to abstract labor-time is of course a consequence of generalized commodity production, as discussed in the section on Value (II.4); for our purposes, what is important in this is that it implies that the labor-time of each worker represents a definite quantity of abstract labor-time.<ref group="EN">The product of each concrete labor-time has a definite quantity of Value—abstract or general labor-time—which is measured by the average quantity of labor-time required for the production of the average product of this type. As such, the actual quantity of labor time put in by a given worker, such as the hand-loom weaver of Footnote 13, counts only as the quantity of average value-added in the production of the average commodity.</ref>

Of the aggregate labor-time <math display="inline">L</math>, a certain portion <math display="inline">V</math> represents the time socially necessary for the production of the means of subsistence of the working class, and the remainder <math display="inline">S</math>, the aggregate surplus labor-time, constitutes the surplus-Value materialized in commodities during their production. If the working day is the same in all branches of production, then each worker adds the same amount of Value to the product, in a given time period (like a day). If the wage rate for a given type of work is the same in all branches, then each worker can purchase the same share of the aggregate means of subsistence; a uniform wage thus represents a given quantity of (abstract) labor-time (say 4 hours a day) which each worker must put in to reproduce the Value of his or her labor-power. Clearly, if the length of the working day (say 10 hours) is indeed the same in all branches, each worker will work the same amount of surplus labor-time (6 hours a day). That is, in each sector, the rates of surplus-Value will necessarily be equal. These rates, therefore, cannot be the source of any differences between the Value rates of profit <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math>.

==== ''B. The Inequality of Organic Compositions of Capital'' ====
The above results imply that in any one sector, say sector J, <math display="inline">V</math> is an index of the total quantity of labor-time <math display="inline">L</math> worked in that sector, since any one hour of abstract labor-time requires the fraction <math display="inline">v</math> for its reproduction: <math display="inline">V = vL</math>. The quantity <math display="inline">C</math>, the value of the means of production in this sector, is, on the other hand, an index of the specific types and quantities of commodities which enter into this process of production as means of production. In general, therefore, unless each sector employs the same types of commodities and labor-powers in the same proportions as every other sector, the ratios <math display="inline">C_i/L_i</math>; and <math display="inline">C_j/L_j</math> will differ. Since <math display="inline">V_i</math>; and <math display="inline">V_j</math> are indexes of <math display="inline">L_i</math> and <math>L_j</math>, in general the organic compositions <math display="inline">(C_i +V_i)/V_i</math>; and <math display="inline">(C_j + V_j)/V_j </math> will differ.

To reiterate Marx's conclusion: in general, the sectoral rates of surplus-value will be equal, but the organic compositions of capital will not. Hence in general the value rates of profit will differ from sector to sector.

==== ''C. The Deviation of Prices of Production from Direct Prices'' ====
Let us now return to the two circuits of capital <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math display="inline">M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>. We began earlier by noting that ''if'' prices were proportional to Values, the money rates of profit <math display="inline">r_i = (M'_i - M_i) / M_i </math> and <math display="inline">r_j = (M'_j - M_j) / M_j </math> would be equal to the corresponding Value rates of profit <math display="inline">\rho_i = S_i/(C_i + V_i)</math> and <math display="inline">\rho_j = S_j/(C_j + V_j)</math>. If in addition the Value rates of profit were themselves equal to each other, then at direct prices, capital in each circuit would realize the same ''money'' rate of profit and no movement of prices would be necessary to bring these money rates into line with the general rate.

We have just seen, however, that in general the sectoral rates will differ; if for instance <math display="inline">\rho_i</math> was greater than <math display="inline">\rho_j</math>, the capital invested in sector <math display="inline">I</math> would, with prices proportional to Values, earn a higher money rate of profit than would capital invested in industry <math display="inline">J </math> (<math display="inline">r_i = \rho_i > r_j = \rho_j </math>). ''To equalize these money rates, therefore, relative prices would have to deviate from relative values'' in such a way as to lower <math display="inline">M'_i</math> relative to <math display="inline">M_i</math> and to raise <math display="inline">M'_j</math> relative to <math display="inline">M_j</math>, for only in this way would the higher money rate of profit <math display="inline">r_i</math> be reduced and the lower money rate <math display="inline">r_j</math> be raised.

In any sector <math display="inline">K</math>, <math display="inline">M'_k</math>, represents the money price of the commodities produced, what I called earlier the sector's total price; <math display="inline">M_k</math>, on the other hand, is the money price of the sector's commodity inputs (means of production and labor-power), what Marx calls its (money) cost-price. Since both the total price <math display="inline">M'_k</math> and the cost-price <math display="inline">M_k</math>, are in essence determined by the prices of commodities, any movements of relative prices, including the ones under consideration here, will in general change both <math display="inline">M'_k</math>, and <math display="inline">M_k</math>: the overall price movements necessary for the formation of a general rate can therefore be quite complicated, as Sraffa has so elegantly demonstrated.<ref group="EN">Sraffa's initial point of reference is a set of prices which obtain when the rate of profit is zero. As is well known, in the simplest case relative prices are then proportional to relative Values. The subsequent movements of relative prices at alternate positive rates of profit which he then analyzes may be therefore viewed as the analysis of relative price-Value deviations at alternative levels of the rate of surplus-Value.</ref>

Nonetheless, beginning from prices proportional to Values, for any sector <math display="inline">I</math> whose Value rate of profit <math display="inline">\rho_i</math> is higher than the average Value rate <math display="inline">\rho</math>, its total price <math display="inline">M'_i</math> must fall relative to its cost-price <math display="inline">M_i</math>, in order to bring its money rate of profit <math display="inline">r_i</math> into line with the general money rate <math display="inline">r </math>. The opposite movement must take place for a Sector <math display="inline">J</math> whose Value rate of profit <math display="inline">\rho_j</math> is lower than the average Value rate <math display="inline">\rho</math>.

Since the differences in the value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> upon which these price movements are predicated are themselves a consequence of the differences between sectoral organic compositions of capital, one may equally well say that, beginning from prices proportional to Values, a sector's total price must fall (or rise) relative to its money cost-price according to whether its organic composition of capital is lower (or higher) than the social average, if its particular money rate of profit is to conform to the general rate.

It does not follow from the above, however, that the general ''money'' rate of profit will continue to equal the general ''Value'' rate of profit, once prices deviate from a strict proportionality with Values. To see why, let us recall that <math display="inline">M'</math>, the aggregate price of commodities, is the total price of the commodities which form the social product. On the other hand, the aggregate cost-price <math display="inline">M</math> is the total price of the commodities, the means of production and the labor-power, which form the inputs into the aggregate process of production. Since the price of labor-power is determined by the price of its means of subsistence the aggregate cost-price <math display="inline">M</math> is in effect the total price of the means of production and the means of subsistence.

Suppose the social product was 100 bushels corn and 100 tons iron. <math display="inline">M'</math> would be its total price. In general, the aggregate means of production and means of subsistence will also consist of quantities of one or both of these commodities, say 80 bushels corn and 60 tons iron. <math display="inline">M</math> would then be their total price. Because these two aggregate "bundles" of commodities will generally differ in their proportions of corn to iron, as is true of the case illustrated above, any movement in the price of corn relative to iron will affect them unequally. Hence ''any'' movement of relative prices will in general change the ratio <math display="inline">M'/M</math> or equivalently, the general rate of profit <math display="inline">r = [(M'-M)/M] = [(M'/M)-1] </math>.

The quantity <math display="inline">M'</math> is of course the sum of prices, while the quantity <math display="inline">\Delta M = M' - M </math> is aggregate money profit. The above result may therefore be stated in an equivalent form: in general, ''any deviations of relative prices from relative Values, including but not only'' those which arise from the formation of a general money rate of profit, ''will make it impossible for both the sum of money prices <math display="inline">M'</math> and the sum of money profits <math display="inline">\Delta M</math> to remain strictly proportional to the sum of Values'' <math display="inline">C + L</math> ''and the sum of surplus-Values'' <math display="inline">S</math>'', respectively''. This result is well known in the debate about the so-called transformation problem; but as it is stated above, it arises in a broader context. In any case, in order to discern its real content, we must examine matters a bit more carefully.

=== 3. Some General Effects of Price-Value Disproportionality ===
In much of the literature on the "transformation problem", there is a great confusion between Values, prices proportional to Values (what I call direct prices), and prices of production. In particular, since direct prices are so simply related to Values, the general issue of the differences between price and Value, and profit and surplus-Value, tends to be taken up only when we turn to prices of production. All of a sudden, we are confronted with the impossibility of a simple proportionality between Value magnitudes and their money-forms, and it begins to seem as if the analysis of Value is something quite separate from the analysis of price.<ref group="EN">A. Emmanuel [3] provides a modern example of a neo-Smithian theory of price, in which the "labor theory" of price is valid when there is only one class of recipients of the net product (laborers), and the theory of prices of production is valid when there are two classes of recipients: capitalists and workers (see Emmanuel, ''op. cit.'', Ch. 1, and Appendix V). This rejection of "labor" as a determinant of price has its roots in the confusion and difficulty surrounding the "transformation problem".</ref>

For this reason, I have attempted throughout this paper to carefully distinguish between Value, which stems from production, and money-price, which is the form taken by Value in circulation. With this distinction in hand, it is possible to see that money-magnitudes are ''always'' different, both qualitatively and quantitatively, from Value magnitudes. Marx notes, for instance, that precisely because the form of Value is not the same thing as Value, the determination of money-price is a ''complex combination'' of its Value elements.

Consider the simplest case, that of direct prices. Suppose the Value of a gold coin weighing 1/4 ounce (which we call a "£")<ref group="FN ">Originally a "£" represented a pound of silver. Hence the name. Over time, however, while the money-name "£" was retained, the silver or gold content decreased steadily. By Marx's time, a "£" represented roughly 1/3 of a pound of silver, or about 1/4 of an ounce of gold (Marx, ''Contribution to a Critique''..., Ch. II, Sec. 1, p. 72).</ref> is 1/2 worker-hour, while that of a bushel of wheat is 100 worker-hours. The direct price of wheat will then be £200. Even right here, Value (100 hours) and price (£200) are both qualitatively and quantitatively different (though related) magnitudes, with different units.

Now suppose the Value of wheat falls by half, to 50 worker-hours. How will this be reflected in its direct price? Well, says Marx, that depends; if the Value of gold also fell by a half, the money-price of wheat would remain constant at £200; if the Value of gold fell by more than a half, the money-price of wheat would rise even though its Value fell!<ref group="EN">See Marx, ''Capital'', Vol. I, Ch.3, Section 2b, pp. 53-54.</ref> Even in this simple case, therefore, the laws which determine the money-form of Value are more complex than those which determine Value itself. But this is hardly an analytical defect; on the contrary, it is the whole point of theoretical analysis to be able to derive more complex categories from basic ones.

If indeed price and Value are always distinct, what exactly is the "transformation" issue about? Clearly, it is about a ''transformation in the form-of-Value''; it is a transformation from the direct expression of Value (direct prices) o a more complex expression (prices of production). What we have to do, therefore, is to see what is altered by this change in form, and what is not.

We begin by noting that what we are considering here is a ''pure'' change of form. For instance, in the traditional formulation of the transformation we analyze a capitalist society in a simple or extended reproduction, first when exchange is ruled by direct prices, and then when it is ruled by prices of production.<ref group="FN ">See section IV.4 of this paper, which discusses the calculation of prices of production.</ref> In both cases, the composition and distribution of the use-values is the same: the same mass of commodities is circulated in either case, with the same physical composition of means of subsistence and surplus-product. Thus the same total commodity Value, the same aggregate Value of labor-power, and the same aggregate surplus-Value, is circulated by the two different price-forms. From the point of view of the system as a whole, the transformation leads to no real change; all that changes is the manner in which given production relations are manifested in circulation.

From the point of view of individual capitals, however, the situation is indeed different. With direct prices, each capitalist realizes an amount of money profit proportional to the surplus-Value contained in the commodities he sells. With prices of production, each sector's money profit is no longer proportional to its surplus-Value; since the sum of Values (and hence the total surplus-Value) circulated is still the same as before, the above change of form has the effect of redistributing surplus-Value from one sphere of production to another. <blockquote>The fact that prices diverge from [proportionality with] values cannot, however, exert any influence on the movements of social capital. On the whole, there is the same exchange of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by everyone of them. (Marx, ''Capital'', Volume II, Ch. XX, Section 1, p. 393)

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (Marx, ''Capital'', Volume II, Ch. II, p. 43) </blockquote>What has been said above in fact applies to any set of prices which differ from direct prices, not just to prices of production. What it shows is that there are limits to the effects of different forms of Value, and that these limits arise precisely in the Value magnitudes whose distribution is brought about through these money-forms.

It does not follow from this, however, that the determination of money-prices is of no consequence. Different forms of Value have different ''real'' effects on individual capitals, and these in turn have different implications for the dynamic process of accumulation and reproduction. It is through the actual movements of money-prices that the system is regulated; as such, the analysis of prices of production (which act as centers of gravity of market prices), and of their relation to Values, is of the utmost importance to concrete analysis. The first step (which in most discussions of the "transformation problem" is the ''only'' step) along this path is the derivation of prices of production from direct prices.

=== 4. The Calculation of Prices of Production ===
In general, we may characterize any two circuits of capital as <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math>M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>.

When exchange is at Values, the money rate of profit in each circuit will equal the Value rate of profit in that circuit. Since Value rates will in general differ from sector to sector, owing to differences in their organic compositions of capital, exchange at Values will imply unequal rates of profit in different sectors, and hence in different circuits of capital.

It follows from the above that the formation of a general rate of profit out of the various individual rates of profit will require that for a sector with a Value rate of profit higher than the social average, the money price of its product <math display="inline">M'_i </math> must fall relative to its money cost-price <math display="inline">M_i </math>, since only this movement will lower its money rate of profit <math display="inline">r_i </math>. As we saw earlier in section III.2.C, this ''must'' hold regardless of how complicated the effects of the formation of a general rate of profit on the overall pattern of prices. And as we shall see immediately, ''it is precisely this movement which is captured by Marx's own transformation procedure''.

==== ''A. Marx's Transformation Procedure'' ====
The example below illustrates the three basic circuits of capital in Marx's analysis: Circuit I represents the production of the means of production themselves, Circuit II the production of the means of subsistence of the working class, and Circuit III the production of the means of consumption of the capitalist class. The example itself, though from Bortkiewicz, not Marx, is used because it is the standard illustration of the so-called transformation "problem" and appears in most discussions of the issue.<ref group="CN">Esto ha sido una gran fuente de confusión...</ref>

Because we have throughout distinguished between Value and money-price and because the issue at hand centers on differences in their magnitudes, we must be careful with notation. As defined earlier, <math display="inline">C_i</math> will represent the value of the means of production of the <math display="inline">i </math>th department, <math display="inline">V_i</math> the value of the labor-power employed there, and <math display="inline">S_i=L_i-V_i </math> the surplus-value produced there; the total value <math display="inline">C_i + L_i</math> produced will be designated by <math display="inline">W_i </math>. In contrast, <math display="inline">MC_i </math> will represent constant capital, the money price of the means of production used in the department, and <math display="inline">M V_i </math> variable capital, the money price of the labor-power used there; as before, <math display="inline">M_i </math> will be the total cost-price and <math display="inline">M'_i </math> the total price of the product. All Value quantities will be in units of (abstract) labor-time, worker-hours, and all money quantities in £'s (1/4 ounce gold coins). It is also assumed that each £-coin has a Value of 1/2 worker-hour.

When exchange is at Values, we get the results shown in Table 1. It should be noted that the table has been designed to correspond to the whole circuit of capital, <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M'</math>, so that the phases of circulation are clearly distinguished from those of production.
{| class="wikitable"
|+Table 1 / Exchange at Values
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
! colspan="2" |<math display="inline">... (C+L) </math>
! colspan="2" |<math display="inline">\rightarrow M' </math>
|-
|
!Constant Capital (MCi)
!Variable Capital (MVi)
!Cost-price (Mi)
!Value of Means of Prod. (Ci)
!Value of Labor-Power (Vi)
!Surplus Value (Si)
!Total Value (Wi)
!Value Rate of Profit % (Pi)
!Total Price (M'i)
!Total Profit (ΔMi)
|-
|(Means of Production)
|450
|180
|630
|225
|90
|60
|375
|19.05
|750
|120
|-
|(Means of Subsistence)
|200
|240
|440
|100
|120
|80
|300
|36.36
|600
|160
|-
|(Capitalist Consumption)
|100
|180
|280
|50
|90
|60
|200
|42.85
|400
|120
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|
|£1750
|£400
|}
Marx's transformation procedure is simple: noting that in Table 1 the total cost-price <math display="inline">M </math> = £1350 (column 3) and the total money profit <math display="inline">\Delta M </math> = £400 (column 10), we get an average rate of profit on social capital of <math display="inline">r= 400/1350 = 29.63 \% </math>.

At existing prices, however, the capital in circuit I, invested in department I, would realize only a 19.05% rate of profit. Thus, in order to raise its money rate of profit to the average level, it must raise its money price. Since its money cost-price is £630, the "normal" profit that it would earn at the average rate of profit is 29.63% of £630, which is £186.67: the level to which it must raise its price therefore is given by M' = £630 + £186.67 = £816.67. Similarly, department II must lower its money-price to M' = £570.37, and department III must lower its to M'= £362.96 (see Table 2).
{| class="wikitable"
|+Table 2 / Max's Transformation
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
!<math display="inline">... (C+L) </math>
!<math display="inline">\rightarrow M' </math>
!
!
|-
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi'
!ΔMi
!ri
|-
|I
|450
|180
|630
|225
|90
|60
|375
|816.67
|186.67
|29.63
|-
|II
|200
|240
|440
|100
|120
|80
|300
|570.37
|130.37
|29.63
|-
|III
|100
|180
|280
|50
|90
|60
|200
|362.96
|82.96
|29.63
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|}
Table 2 illustrates Marx's transformation procedure. In it, the transformation ''per se'' refers to the movements of money-prices, ''not'' to changes in the Value flows. ''Moreover, the direction of movement of money prices'' <math display="inline">M'_i </math> ''to their corresponding cost-prices'' <math display="inline">M_i </math> ''is the correct one'': <math display="inline">M'_1 </math> rises relative to its cost-price, and <math display="inline">M'_2 </math> and <math display="inline">M'_3 </math> fall relative to theirs.

==== ''B. The "Correct" Prices of Production'' ====
From Bohm-Bawerk onwards, critics have argued that Marx's procedure was simply incorrect. They pointed out, for instance, that his transformation leaves the money prices of inputs (MC;, MV;) unchanged, whereas a thoroughgoing transformation would change these too. Marxists have countered these charges by claiming that, in any case, one can show the formal possibility of deriving prices of production from direct prices; in the Bortkiewicz method, for example, one can solve for a series of price multipliers which would enable one to transform the exchange-at-Values scheme of Table 1 to the "correct" exchange-at- prices-of-production scheme.<ref group="EN">Sweezy [21], Ch. V.</ref> Then, depending on whether one prefers the sum of prices or the sum of profits as constant, one can always "normalize" the multipliers derived from the Bortkiewicz method to make one or the other hold, for in general both cannot.

Even if the controversy about the appropriate "normalization", much of which arises from a confusion between Value and money-price, is satisfactorily resolved, the real problem with all of these foregoing transformation procedures remains: they effectively sever the link between Values and money-prices, or at least bury it in algebra, and are forced to reject Marx's own procedure as completely erroneous. Thus for instance in this example, the appropriate algebraic procedure would "jump" us from Table 1, representing exchange at Values, to Table 3 below, which portrays the "correct" price of production scheme under an (algebraically) arbitrary "normalization" which keeps the sum of money-prices (£1750) invariant to the transformation. In all of this, Marx's own trans- formation, as represented in Table 2, plays no role at all.
{| class="wikitable"
|+Table 3 / The "Correct" Prices of Production
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi
!Delta Mi
!ri
|-
|I
|504
|168
|672
|225
|90
|60
|375
|840
|168
|25%
|-
|II
|224
|224
|448
|100
|120
|80
|300
|560
|112
|25%
|-
|III
|112
|168
|280
|50
|90
|60
|200
|350
|70
|25%
|-
!Total
|£840
|£560
|£1400
|375
|300
|200
|875
|£1750
|£350
|
|}

==== ''C. Marx's Transformation Procedure Extended'' ====
Marx himself never goes beyond the transformation procedure he illustrates in Volume III of ''Capital''. And yet in several instances, he indicates clearly his awareness of the issue:<ref group="EN">In addition to the transformation discussion in Volume III of ''Capital'', see: ''Theories of Surplus Value'', Part III, Ch. XX, p. 82 and pp. 167-168.</ref> <blockquote>Aside from the fact that the price of a particular product... differs from its value... the same circumstance applies also to those commodities which form the constant part of (its) capital, and indirectly also its variable part, as the labourer's necessities of life... Under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations. (''Capital'', Vol. III, Ch. IX, p. 161.)

The foregoing statements have at any rate modified the original assumptions concerning the determination of the cost-price of commodities... Since the price of production may differ from the value of a commodity, it follows that the cost-price of a commodity containing this price of production of another commodity may also stand above or below that portion of its total value derived from the value of the means of production consumed by it. It is necessary to remember this modified significance of the cost-price, and to bear in mind that there is always the possibility of error if the cost-price of a commodity in any particular sphere is identified with the value of the means of production consumed by it. Our present analysis does not necessitate a closer examination of this point. (''Ibid.'', pp. 164-65.) </blockquote>To his critics, especially to those for whom only the ''calculation'' of prices of production has any significance, Marx's postponement of the "feedback" effects of the price-Value disproportionalities is an admission of failure—hence the so-called "great contradiction" between Volumes I and III.

But there is in fact a simple alternative: Let us extend Marx's procedure by progressively "feeding back" the effects of the initial price-Value disproportionalities and see what happens. Table 4 illustrates this extended procedure. In order to emphasize the fact that the transformation and its extension affect only money flows M and M', and not the Value flows (C + V) ... P... (C+L), I have included both. This is somewhat tedious but it does make it clear that Value and surplus-Value are distinct from price and profit, a distinction which arises precisely from the difference between the spheres of production and circulation. But before we turn to this, we must first understand the logic involved.

We begin with exchange at Values (as was previously illustrated in Table 1). Let us now consider for a moment the real content of Marx's transformation procedure. If prices were actually proportional to Values, then rates of profit in each sector would differ from the social average. All other things being equal, either the competition of capitals or the threat of this competition would force the various sectors to adjust the prices of their products in such a way as to realize only the average rate of profit. In Department's II and III, for instance, which would have higher than average profit rates, either the threat of competition or else the actual inflow of capital would lower prices till only the average profit was obtained; in Department I, the reverse would take place.

In any real situation similar to the above, the actual adjustment process would involve changes in both the unit prices and the quantities sold; any actual inflow of capital would lower price through an expansion of supply; conversely, any lowering of price in response to the threat of competition would increase the amount sold.

But what we are interested in here is the pure change of form involved in the equalization of profit rates. And this, for a given mass of commodities, is an adjustment process ''which leaves the total sum of money prices unchanged'': since the cost-prices have already been incurred by the individual capitalist, the immediate burden of adjustment must fall upon current product prices, and their response in the face of capitalist competition is precisely to rise or fall till the individual rates of profit all equal the existing average rate. This simply means that the unit price of average commodity output is under no immediate compulsion to change, because in this case the rate of profit is the average rate. The average commodity, however, is only a microcosm of the total mass of commodities: the constancy of its price is therefore equivalent to the constancy of the total sum of prices.

Marx's transformation procedure is merely an application of the logic of this adjustment process. In Table 4, the initial situation under consideration in Step 1A is exchange at Values: the sum of prices is £1750, and the sum of profits is £400. Step 1B then illustrates Marx's own transformation, in which the immediate process of adjustment redistributes the given mass of surplus-Value (whose magnitude cannot of course be changed in circulation) by raising prices in Department I and lowering them in II and III. The sum of money prices remains unchanged at £1750, and in this instance the sum of money profits also remains at its previous level of £400.

Expressed in proportion to its previous price, which was its direct price, the change in the money-price of Department I is Yy = 816.67/750 = 1.089. Similarly, ¥, = 0.951 and ¥ = 0.907.
{| class="wikitable"
|+
!
!
!
!
|-
|
|
|
|
|-
|
|
|
|
|-
|
|
|
|
|}
It is only in the next step, Step 2A, that we see the effect of the above deviations from direct prices on the cost-prices in each amount of capital. Since Department I produces the means of production for all departments, its price multiplier {/; = 1.089 will imply higher money prices (MC;) for all means of production. Similarly, since Department II produces the means of subsistence, its price multiplier ¥/, = 0.951 implies a lowering of the money costs of labor- power (MV;) in each amount. Y3, on the other hand, will not affect either component of cost-prices, since Department III produces only commodities for the consumption of capitalists.

Capitalists in each department will now have incurred new cost-prices differing from those in Step 1B. If they were to continue to sell their products at the prices of Step 1B their rates of profit would no longer be equal. This is the case illustrated in Step 2A. The overall effect of the preceding "feedbacks" is to raise the aggregate cost-price from £1350 to £1387.04. Since the sum of prices is unchanged, this results in a decrease of total money profit from £400 to £362.96.

Once again, therefore, capitalists in each sector would be compelled to adjust their individual money rates of profit to conform with the average rate, through the movements of their respective commodity-prices; once again, the average commodity, and hence the total mass of commodities, would be under no such compulsion, so that the total sum of prices would remain constant at £1750.

The resulting situation is depicted in Step 2B. Department I's price, compared to its previous level in Step 1B (and 2A), has risen again, this time by Yy = 834.12/816.67 .021, while those of II and III have fallen from their previous levels by Y, = 0.986 and Y3 = 0.973. The pattern of transfer of surplus-Value has therefore been altered once again; moreover, in this case the money form of the mass of surplus-Value (i.e., total money profit) has been altered in magnitude. In the same way, the money rate of profit (26.17%) is no longer simply equal in magnitude to the value rate of profit (29.63%).

In each succeeding step, the procedure may be repeated until the changes from one step to another are negligibly small—and we find ourselves with the "correct" prices of production first illustrated in Table 3! This is not, as is usually the case, on the basis of an alternative to Marx's procedure of transformation, but rather on the basis of its successive application.

The procedure illustrated in Table 4 is quite general. The proof is left to Section VI of the mathematical appendix to this paper.

== V. Some further considerations ==
In the preceding discussion, four important points have emerged in connection with the so-called "transformation problem".

First of all, it is not a case of transforming ‘"Values into prices". Rather, it is a case of transforming one form-of-Value, direct prices, into another form, prices of production.

Secondly, the issue under consideration involves a pure change of form. As such, the transformation from direct prices to prices of production does not involve any ''real'' change for the system as a whole. The total mass of commodities, and the various portions of it going to each class, remain the same as before. By the same token, so do the sum of Values and sum of surplus-Values. What the transformation brings about is a different division of the total pool of surplus-Value among individual capitalists.

Third, the transformation procedure set out by Marx reflects the inherent nature of the process of the equalization of profit rates. This is a continuously occurring process, and in its pure form it acts by changing prices of individual commodities while leaving the sum of prices of a given mass of commodities intact. In addition, Marx's procedure can be extended in a simple way to derive the "correct" prices of production.

Lastly, in the case of the "correct" prices of production, the money rate of profit will deviate from the Value rate of profit. Like the deviations of prices of production from direct prices, however, the money and Value profit rate deviation is systematic and determinate. Though we do not prove it here, it can be shown that (under any given conditions of production), the money rate of profit will vary with the Value rate.<ref group="EN">It has been proved in various places that, under given conditions of production, arise in the rate of surplus-Value will increase the ''money'' rate of profit. Since it will also have the same effect on the ''Value'' rate of profit, it follows that the two move together (see, for instance, Medio [11], pp. 339-340; or Morishima (141, Ch. 6).</ref>

These connections by no means exhaust the possibilities. The relation between the mass of surplus-Value and its transformed money-form (total money profits under prices of production) still needs to be better specified.<ref group="CN">Mediante su procedimiento, Shaikh no logra mantener la invarianza "Masa de plusvalía = Masa de ganancia monetaria"; aunque si mantiene "Masa de valores = Masa de precios de producción" puesto que estos agregados no cambian durante su transformación</ref> So too does the relationship between individual prices of production and the corresponding Values.<ref group="CN">?</ref>

Perhaps the most important point to keep in mind is that the laws that Marx derives on the basis of this theory of Value cannot be derived from a theory which ''begins'' with prices of production. For instance, Marx's distinction between Value and money-price goes hand in hand with a corresponding differentiation between production and circulation. It consequently becomes necessary to distinguish between activities which produce commodities and those which circulate them, and eventually this difference develops in the more complex and powerful distinction between surplus-Value ''producing'' labor (what Marx calls "productive" labor) and all other types (which Marx relegates to the category of "unproductive" labor). Among other things, an increase in the proportion of unproductive labor (say advertising) to productive labor, for given level of total employment, would imply a smaller mass of surplus-Value to be shared out, and hence a smaller rate of profit. Such a conclusion has no parallel in orthodox theories of price.

Marx's analysis abounds with similar examples. His theory of money, for instance, is the direct opposite of the Quantity Theory.<ref group="EN">See Marx, ''Capital'', Vol. I, Ch. 3; or ''Contribution to the Critique of Political Economy'', Chapter 2.</ref> Similarly, his theory of the falling tendency of the rate of profit, and the theory of accumulation and crises which stems from it, receive their characteristic form from the distinction between constant and variable capital—precisely a distinction which makes no sense without the notion of Value.

All of this means that if Marx's economic analysis is to be developed, it must first be understood. Or else it must be abandoned altogether. The latter path is no doubt simpler, and certainly more consistent with orthodox economics. If the task is to understand the world in order to change it, then the adequacy of analysis, not its "acceptability", is all that matters. And on that basis, it seems to me that Marx's analysis is the most appropriate starting point.

== VI. Conclusions ==
It is the function of all scientific analysis to get beneath the surface of phenomena, to reduce their apparent movement to the real: "...all science would be superfluous if the outward appearance and the essence of things directly coincided".<ref group="EN">Marx, ''Capital'', Vol. III, Part III, Ch. XLVIII, p. 813.</ref>

The outward appearance of the sphere of circulation is one of freedom, equality, and choice: it is a world whose real inhabitants are inherently-equal-things, commodities, a world into which human beings enter only as representatives of these "natural" democrats: "It is an enchanted, perverted, topsy-turvy world, in which Monsieur le Capital and Madame la Terre do their ghost-walking as social characters and at the same time directly as mere things".<ref group="EN">''Ibid.'', p. 830.</ref>

To Marx, the great merit of classical economy was that it saw through, albeit incompletely, this "false appearance and illusion, this mutual independence and ossification of the various ''social'' elements of wealth, this personification of things and the conversion of production relations into entities, this religion of everyday life. It did so by reducing interest to a portion of profit and rent to the surplus above average profit, so that both of them converge in surplus-value; and by representing the process of circulation as a mere metamorphosis of forms, and finally reducing value and surplus-value of commodities to labour in the direct production process".<ref group="EN">''Ibid.'', p. 830. Emphasis added.</ref> In this way the classical economists were able to get beyond the simple conceptions generated by the outward appearance of capitalism, penetrating the disguise of circulation and seeing behind it the process of production. But they themselves were trapped by their inability to properly distinguish capitalist production from other historically determinate forms; by taking as given and eternal the concepts generated by the outward appearance of capitalist production, they remained "more or less in the grip of the world of illusion which their criticism had dissolved".<ref group="EN">''Ibid.'', p. 830.</ref>

The "world of illusion" Marx refers to represents the conceptions common to bourgeois thinkers; it covers not only the actual analysis of classical economists and of their targets, the vulgar economists, but also the conceptual framework within which they clash. Contained in their agreements and disagreements is an implicit philosophy, an implicit theory of history, an implicit anthropology, and so on.<ref group="EN">See Althusser’s discussion of this in [1], Ch. 2-4.</ref> Thus for Marx the critique of classical economy is at the same time a critique of its philosophy, its history, its anthropology. His analysis in ''Capital'' is necessarily predicated on all of these critiques; the vast distance between Marx and the classical economists, and hence between "value" in Marx and "value" in classical economy, can only be understood if one recognizes that in solving the problems of the classical economists Marx also breaks with the (often implicit) bases on which they had formulated their questions.

Insofar as the problems to be dealt with center largely on the magnitude of Value, as is often the case in this paper, the real difference between Marx and Ricardo, the difference in their methods, tends to be hidden. Marx's superior ability to solve Ricardo's problems, is, as he himself insists, due to his ability to transcend "the world of illusion" in whose grip Ricardo remains. This superior ability is therefore only a symptom of the real difference between Marx and the classicals. But to those who either explicitly or implicitly reduce Marx to Ricardo, this symptom becomes the real difference itself. Marx becomes a clever, if somewhat mystical, post-Ricardian.

The very same process of reduction often operates even further in the comparison of Marx to neoclassical analysis. Not only are Marx and Ricardo lumped together, but both are reduced to the one-dimensional world of neo-classical analysis. Here, the very conception of the problem to be analyzed is usually neoclassical; even those who reject the flatness of its theory are very often forced to fight their battles on its terms, and hence ''within'' its general framework.

The so-called transformation problem is a classic example of all this. As it is usually presented, the central issue is one of the ''calculation'' of static prices of production, and the major point of contention is the presence or absence of a relationship between Marx's transformation procedure and the "correct" one.

I have, as much as possible, attempted to avoid this trap. Certainly the issue of calculation is relevant; but the ''conception'' of that-which-is-to-be-calculated comes first, for in that conception lies the superiority of Marx's method. The early part of this paper therefore attempts to provide the basis of Marx's conception of prices in general, and prices of production in particular. In this way we are able to resolve many of the confusions surrounding the so-called "transformation problem", as well as being able to demonstrate that the "correct" prices of production can be calculated from values ''in the manner suggested by Marx's own transformation procedure''.

== Mathematical Appendix ==
Lack of space makes it impossible to include the mathematical appendix to this reading. However, [https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ a copy of the appendix] is available on request from the author of this reading.

== References ==

# L. Althusser and E. Balibar, ''Reading Capital'', translated from the French by Ben Brewster, Pantheon Books, (New York: Random House), 1970.
# W. Baumol, "The Transformation of Values: What Marx ‘Really' Meant (An Interpretation), ''Journal of Economic Literature'', March 1974, Vol. XII, No. 1.
# A. Emmanuel, ''Unequal Exchange: A Study of the Imperialism of Trade'' (New York: Monthly Review Press), 1972.
# T. Kuhn, ''The Structure of Scientific Revolutions'' (Chicago: University of Chicago Press), 1970.
# E.Mandel, "Value, Surplus Value, Profit, Prices of Production and Surplus Capital—A Reply to Geoff Hodgson", ''International Socialist Review'', Vol. 2, No. 1, Spring 1973.
# K. Lancaster, ''Mathematical Economics'' (New York: The Macmillan Company), 1968.
# Karl Marx, ''A Contribution to the Critique of Political Economy'', with an Introduction by Maurice Dobb (New York: International Publishers), 1970.
# —, ''Theory of Surplus Value: Volume IV of Capital'' (Moscow: Progress Publishers), Part I, 1969; Part II, 1968; Part III, 1971.
# —, ''Capital'', Volumes I-III (New York: International Publishers), 1967.
# —, "Comments on Adolph Wagner's ‘Lehrbuch der politischen Okonomie', 1879/80", published as ''Karl Marx on Value'', British and Irish Communist Organization, Belfast, 1971.
# A. Medio, "Profits and Surplus-Value: Appearance and Reality in Capitalist Production", published in ''A Critique of Economic Theory'', edited by E. K. Hunt and Jesse G. Schwartz (London: Penguin Books), 1972.
# R. Meek, ''Economics and Ideology and Other Essays'' (London: Chapman and Hall), 1967.
# M. Morishima and F. Seton, "Aggregation in Leontief Matrices and the Labour Theory of Value", ''Econometrica'', Vol. 29, 2 (April 1961), pp. 203-220.
# M. Morishima, ''Marx's Economics'' (Cambridge: Cambridge University Press), 1973
# J. Robinson, ''An Essay on Marxian Economics'', Second Edition (London: Macmillan; New York: St. Martin's Press), 1969.
# B. Rowthorn, "Skilled Labour in the Marxist System", ''Bulletin of the Conference of Socialist Economists'', Spring 1974, pp. 25-45.
# P. A. Samuelson, "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, Vol. IX, No. 2, pp- 399-431.
# F. Seton, "The ‘Transformation Problem'", ''Review of Economic Studies'', June 1957, 25, pp. 149-160.
# A. Shaikh, ''Theories of Value and Theories of Distribution'', Columbia University Ph.D., 1973 (unpublished).
# P. Sraffa, ''Production of Commodities by Means of Commodities'' (Cambridge: Cambridge University Press), 1960.
# P. M. Sweezy, ''The Theory of Capitalist Development'' (New York: Monthly Review Press), 1964.

== Endnotes [EN] ==
<references group="EN" />

== Footnotes [FN] ==
<references group="FN " />

== Critical Notes [CN] ==
By [[Comrade:Ismael|Comrade Ismael]]<references group="CN" />
[[Category:Works by Anwar Shaikh]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T07:39:32Z

Ismael:

{{Library work|title=Marx's Theory of Value and the "Transformation Problem"|author=Anwar Shaikh|published_date=1977|pdf=https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ}}

== I. Introduction ==
It is curious that in the almost eighty years since the publication of Volume III of Marx's ''Capital'', a major theoretical problem, the infamous "transformation problem," has never been satisfactorily resolved. Throughout Volume I, written by Marx ''after'' he had already completed the first draft of Volume III, the analysis is based on the assumption that exchanges of commodities take place at prices proportional to their labor values. I will call these prices the "direct prices" of commodities. In Volume III, which was compiled by Engels from the incomplete first draft, after Marx's death, Marx extends his analysis to take into account "prices of production," demonstrating how one can derive these prices from the "direct prices" of Volume I. This derivation, from then on the center of an intense controversy, was the original "transformation procedure."

Opponents of the labor theory of value immediately seized on the apparent incompleteness of Marx's procedure. Bohm-Bawerk, for instance, questioned the tenability of Marx's statement that the sum of prices after the transformation would remain equal to the sum of values; others have pointed out that Marx's procedure contains an "error," because while he transforms the prices of outputs from "direct prices" to "prices of production," he leaves the inputs untransformed. Since commodities appearing as outputs of a productive system are often also inputs into the system, it is argued that Marx's procedure is logically flawed; "direct prices" and "prices of production" are two separate and unrelated phenomena, leading to a "great contradiction" between Volume I and Volume III of ''Capital'', More recently, essentially the same point has been made by Samuelson [17], in which he attacks the very idea of a transformation procedure: "Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila! You have completed your transformation algorithm."1 As we shall see. this criticism is completely incorrect, it is also somewhat misplaced; if anything, it applies most properly to the neoclassical "transformation procedure" which was the center of the so-called Cambridge Capital Controversies, a procedure in which Samuelson himself was quite prominent.*

On the Marxian side, there have been, of course, many "solutions" to the transformation problem, from Bortkiewicz’s original transformation procedure and its subsequent variants to Francis Seton’s important paper [18]. Unfortunately, as even supporters and sympathetic critics of the labor theory of value admit, these "solutions" all suffer from the same basic defects; they show "the possibility of a consistent derivation of prices from values"2 while apparently severing the crucial links between price and value magnitudes which Marx seemed to emphasize in his own procedure. In most discussions of the issue, these links have appeared in the form of the following equalities: of the "sum of prices" and the "sum of values"; of the magnitude of profits and the magnitude of surplus-value; of the profit-wage ratio and the rate of surplus- value; and of the general rate of profit in price terms and the same rate in value terms. As is well-known by now, in any "correct solution" either the first or the second, but not both, can be always made to hold, while in general the other two cannot. What then are we to make of Marx’s procedure?

It has been suggested that Marx, having published Volume I in full confidence that the labor theory of value was the correct basis, discovered too late, in writing Volume III, that it was not. But that doesn’t work, because we know that Volume I was published well after Volume III had been drafted. Others, perhaps more charitably, have suggested that because the labor theory of value as a theory of relative prices was so much a part of the tradition of classical economics, it was taken over by Marx almost unexamined. A variant of this line of reasoning, which is popular among some Marxists, is that if nowadays we view Marx-as-an- economist as a member of the classical school, it is we who import into Marx’s theory of value, which is only nominally similar to that of Smith and Ricardo, the pre-Marxian question of the quantitative relationship between prices and values. In the variant, therefore, the lack of examination is on our part, not that of Marx. Marx was simply not terribly concerned with the quantitative relationship.3

To anyone who has read Marx’s voluminous comments and critiques of the classical economists, notably in ''Theory of Surplus-Value'' and in ''Capital'', it becomes impossible to ascribe to Marx an unthinking take-over of a labor theory of value from anyone at all. Marx spends literally hundreds of pages discussing values and their relationship, both qualitative and quantitative, to wages, profits and prices; no aspect, no issue, is ignored in these incredibly detailed discussions. So the main line of that argument does not hold up. As for the variant, insofar as it argues that there is a vast difference between the "value" of Smith and Ricardo and the "value" of Marx, it is undeniably correct; where it goes wrong is in jumping from this important fact to the conclusion that Marx either does, or even could ignore the quantitative aspects which dominated the pre-Marxian "value theory."

Consider for a moment the fact that there is a vast difference between Einstein and Newton too, one which stems from different methodologies, different objects of analysis, etc., and extends all the way to differences in concepts and calculations. There is, in other words, what Thomas Kuhn calls a "paradigm break" between the two modes of analysis.4

The notion that Einstein and Newton, for instance, treat what appears to be some autonomously defined subject—"Physics"—is an illusion which is fostered by textbook propagandists whose very aim is to treat science as the glorious and lofty march towards "truth." In reality, however, almost every conception and calculation in Relativity Theory contradicts those of classical physics.

To reduce Einstein to a "tidied up" Newton would therefore be impossible. What is worse, this impossibility would show up in the form of "logical contradictions," "redundancies," and "irrationalities" in Einstein, not in Newton, for the propositions derived from the Theory of Relativity cannot be derived within a Newtonian basis. What can we say, for example, in a Newtonian framework about the fundamental Einsteinian notion that there exists a finite limit, the speed of light, for the velocity of any object? Only that it is clearly wrong, or at best, a notion we (as Newtonians) have no use for in our framework—one which therefore appears "mythical," "metaphysical," "irrelevant."

Insofar as some Marxists have pursued a similar line of argument as to the "reduction’" of Marx to Ricardo, they have been making an absolutely crucial point: namely, that by attempting to "reduce" Marx to Ricardo, or to neoclassical economics, the impossibility of this reduction will manifest itself as a series of "contradictions" and "irrationalities" in Marx! What we think we find, on a Ricardian or neoclassical basis, is that Marx is simply incorrect, or at best gets involved in an "unnecessary muddle."5 What we have in fact demonstrated is that you cannot derive Marx from Ricardo or Samuelson.

Obviously, none of this implies that Marx is above criticism. The point here is that in order to be able to evaluate Marx’s solution to some problem, we must first of all define the problem. We must, in other words, ''locate'' the problem in terms of some general analysis, so that we may see which solutions are adequate and which are not. It has often been said that the hardest part of solving a problem is figuring out the question!

Some Marxists, however, jump from the implications of the difference between Marx and Ricardo to the false conclusion that Marx was, or at least that Marxists could be, unconcerned with the quantitative relationships between prices and values (whether he was and whether Marxist analysis could be are in fact two separate issues, but one leads to the other).

To begin with, the statement that Marx did not in fact consider these matters to be important runs headlong into the contrary evidence of the vast amount of attention Marx’s writings give to them; the only way to get around this evidence in turn, is to try and show that the issue itself is irrelevant. In this way the real basis of this line of reasoning turns out to be the argument that Marxist analysis can, and should ignore the quantitative relationship. On the one hand, this argument gets much of its impetus from the persistent, and to some extent, damaging attacks on the "transformation from values to prices"; and on the other, it derives much of its appeal from a reaction against the obvious banality of neoclassical economics, in which relative prices figure so prominently. Nonetheless, the argument is simply untenable, for it is based on an ''unspoken'' conception about scientific analysis which when made explicit is quite unsupportable: namely, that as a science, the Marxist analysis of capitalism can simply choose to ignore the quantitative aspects of any phenomena, once it has understood the qualitative aspects. Marx himself had a higher opinion of his work:<blockquote>Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. (''Capital'',* Volume III, Part I, Ch. I, p. 25) </blockquote>Unfortunately not many Marxists today seem willing to accompany Marx all the way in his arduous journey; and of those that do, even fewer appear to be interested in pulling together and extending, where necessary, the sometimes incomplete analysis of Volume III. The labyrinths of the turnover of capital in Volume II, the "petty detail" of the endless tables of differential rent in Volume III, and certainly the unending controversy about the "transformation problem" must all seem so very tedious, perhaps even dangerously confusing, to those who remain content to bask in the brilliance of Volume I.6 But Marx at least did not find in the difficulty of a subject a sufficient reason for avoiding it:

That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits. (''Capital'', Volume I, "Preface to the French Edition," p. 21)

== II. Value and Price ==

=== 1. Calculation versus Conception ===
I have, up to now, confined myself to a discussion of the so-called "transformation problem" and of various attitudes toward it. It is, however, a major purpose of this paper to demonstrate that one can, ''precisely in the manner set out by Marx'', calculate the "correct prices of production" from values. The link between the two, one so obvious that until recently it seems to have been completely overlooked, ** is simply that while Marx’s procedure is a perfectly general one, it is only the first step in an iterative transformation from "direct-prices" to "prices of production." But while this extension of Marx’s procedure does falsify the so-called "impossibility theorems" on it (most recently voiced by Paul Samuelson), it by no means establishes the need for such a transformation in the first place. As has often been pointed out, "prices of production" can instead be calculated directly from the same "‘economic data" as "direct-prices." The difference between the two methods of calculation therefore lies not in the end point but in the beginning; that is, it lies not in the magnitude of "prices of production" but in their meaning, in their conception. To reduce the issue of the transformation to one of merely calculation, is simply to reduce Marx to neoclassical economics. And, as I pointed out earlier, the impossibility of such a reduction can only "show up" as a "redundancy" in ''Marx'': after all, if both methods arrive at the same end point, why bother with Marx’s needless "detour" through values?

The question may be put more precisely: in what way is Marx’s analysis of value different from that of orthodox economics? What sorts of issues, conceptions, and calculations are specific to it alone? What laws does Marx derive from it which cannot be derived from conventional economic analysis? Unless we make an attempt to answer these questions, any discussion of the "transformation" issue is quite irrelevant: without a proper understanding of the concept of value as it appears in Marx, it is pointless to try and analyze the so-called "transformation from values to prices of production." The discussion of the actual transformation algorithm is therefore postponed until Section III. In this section we must establish its ''raison d’etre''.

=== 2. Basic Method ===
<blockquote>Whatever the social form of production, labourers and means of production always remain elements of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another. (''Capital'', Vol. II, Ch. I, Section I, p. 34.)

The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers... which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. (''Capital'', Vol. III, Ch. XLVII, Section II, p. 791.) </blockquote>The preceding quotes present a crucial element of the Marxist approach to history: namely, that the specific manner in which production is organized, and surplus-labor extracted from the direct producers, forms the "hidden basis of the entire social structure." For Marx, it follows from this that the concepts adequate to the analysis of any specific historical epoch, including that of capitalism, must necessarily be based on these aspects of its social practice. The struggle for production is the fundamental social practice in all human society; hence the analysis of production is the beginning point of Marxist analysis. The extraction of surplus-labor is the basis of all class societies; hence its study is the source of the concepts adequate to an analysis of all class societies. ''Capital'' is Marx’s application of this approach to the analysis of capitalism.

=== 3. The Production of Commodities ===
One very important aspect of the social process in which laborers and means of production are united in the ''capitalist'' mode of production, as opposed to all others, is that under the capitalist mode the overriding aim of production is not production-for-direct-social-use but production-for-exchange. In the caste system of India, for example, the social regulation of productive activity is made starkly visible by the existence of hereditary castes whose members can, and in fact must, perform only those concrete types of labor which are required of their caste. Production is, in this society, production-for-direct-social-use (whatever we may think of that use); distribution of the products of labor is similarly directly regulated.

But in capitalism, we have commodity production. What turns a product (something which is produced) into a commodity (something which is bought and sold) is a specific set of social structures which organize the productive activities (the labor) of society around production-for-exchange. In commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction. Society is organized in such a way that there is no ''direct'' social regulation of productivity activity: during production people act as individuals, relating only to their products; it is in exchange, therefore, that the true social nature of their existence is forcibly demonstrated to them through the relation of their commodities to those of others. Exchange, so to speak, is a "symptom" of commodity production, and its real limits can only be understood by relating exchange to its "hidden basis"—i.e., to production. It follows, therefore, that in a Marxist analysis the derivation of the categories of exchange, such as money and price, as well as their movements, must necessarily be based on the categories of production. Taken by itself, as an eternal category divorced from any particular type of production, exchange appears to be a smooth, static, inherently equilibrating process: witness the parables of neoclassical economics. Circulation is, to all appearances and purposes, the sphere of freedom, equality and equilibrium. But for Marx, circulation is precisely the sphere in which the contradictions inherent in the production of commodities are "both exposed and resolved";7 the manner in which these contradictions in production dominate exchange, both qualitatively and quantitatively, is what Marx means by the law of value: "in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time necessary for their production forcibly asserts itself like an overriding law of Nature."8

=== 4. Exchange-Value and Value ===
In all production, concrete (i.e., specific) types of labor and concrete inputs result in a concrete product. Moreover, since the produced inputs themselves must be the products of past labor, we may say that in all production, including commodity production, concrete products are the results of concrete labors, in a given natural context.9 But commodity production (the production of goods-for-exchange) necessarily implies exchange; and in exchange the distinct qualities which give various commodities their "concreteness" are abstracted from. In exchange, what matters is not the physical properties of iron but how much wheat, or cloth, or coffee, etc., we can get for the iron; hence in exchange we treat every commodity not as a concrete bundle of distinctive qualities, but as the equivalent of specific ''quantities'' of all other commodities.

Precisely because exchange is a social process which quantitatively compares and equates different products, it is only in those societies which produce for exchange that the product of human labor acquires the property of "quantitative worth." In addition to being useful, they are now also "valuable": they are commodities.

We have to get a little more exact in our terminology at this point. In conventional usage (and with some classical economists), the term "value" sometimes refers to the notion of a useful object, and at other times to the notion of the "quantitative worth" of an object. In order to avoid confusion, therefore, Marx uses the term ''use-value'' to mean useful object, and the term ''exchange-value'' to mean the quantitative "worth" of an object. In Marx's terminology, therefore, a commodity is both a use-value and an exchange-value.

It is usually not difficult to explain what is meant by a useful object.* But when we say that a commodity is "worth" something just what is implied? Suppose I say that in barter a bushel of corn is "worth" a ton of iron, and also a yard of silk, and an ounce of gold, and so on. At first glance, what I appear to be saying is that there are many different quantitative expressions for the "worth" of a bushel of corn, depending on which other commodity (iron, silk or gold) I choose to ''measure'' it by.

But there is a deeper problem here. In order for me to measure the "worth" of corn in terms of gold, for instance, gold must also be "worth" something itself. Otherwise I cannot say how much gold is equivalent to a bushel of corn. It is just like my saying that a stone "weighs" ten grams; what I mean is that on a scale it takes ten pieces of iron called gram-weights to equal the weight of the stone. But clearly, in order for me to carry out this operation, both stone and iron must already possess the property of being "heavy," of having "weight"; the gram-weights don’t make stones ‘"heavy," they only measure the already existing heaviness of stones.

Exactly the same conclusion applies to "quantitative worth." The factors which cause commodities to have "quantitative worth" in the first place must be carefully distinguished from the measurement of this "worth." Measuring the "worth" of corn in iron will give a different result from measuring it in gold; but neither measure causes corn to have "quantitative worth." Rather, each merely expresses the preexisting "worth" of corn in terms of some particular commodity.

The question of exchange-value ("quantitative worth") is therefore really a twofold one: first, what is the cause of "quantitative worth"; and second, how is this "worth" actually expressed, measured, in exchange?

If we look at society as a regularly reproduced set of social relations, it becomes very clear that the production and reproduction of the masses of useful objects which correspond to various social needs requires a definite, quantitative distribution of social labor. Each different useful product requires a concretely different type of labor; reproduction of the material basis of the society consequently requires the existence and reproduction of appropriate amounts of different concrete labors. That is to say, social labor from the point of view of its capacity to produce different use-values is what Marx calls social labor in its role as ''concrete'' labor.10

A commodity, however, is more than a mere use-value; it is at the same time an exchange-value, an object possessing "quantitative worth." It follows from this that the very same social relations which endow use-values with the property of "quantitative worth," endow the labor which produces these use-values with the capacity to create "quantitative worth." From this point of view, all commodity producing labor is qualitatively alike and quantitatively comparable: it is what Marx calls "(commodity producing) social labor in its capacity as ''abstract'' labor." 11

Therefore, to the question on the cause of exchange-value, Marx’s answer is: abstract labor, i.e., <s>labor actually engaged in commodity production</s>, is the cause of exchange-value.12 Moreover, if we consider the production of a commodity from the point of view of the whole society, it becomes apparent that the commodity’s exchange-value represents the total amount of abstract labor-time socially necessary13 for its production, both directly (in the process of producing the commodity from its material inputs) and indirectly (in the process of producing the material inputs themselves, and the inputs of the inputs, and so on). Marx consequently refers to this total sum of abstract labor-time as the ''immanent measure'' of a commodity’s exchange-value, what he calls its "Value."14

The discerning reader will have noticed that I have capitalized the term Value. This is done in order to emphasize the distinctiveness of Marx’s use of the term, and especially to avoid confusing it with the term "value" in orthodox economics (where it generally refers to a price of some sort).

It should also be noted here that the Value of a commodity is the ''average'' amount of abstract labor-time required for its production. The total output of a particular commodity represents* the expenditure of a certain amount of abstract labor-time which under existing conditions is required for its production. In exchange, however, all commodities of a given type are treated alike; each commodity is merely "an average sample of its class,"15 and as such represents the average expenditure of abstract labor-time.16

In order to avoid confusion later on, I will distinguish between the ''sum of Values'' (the abstract labor-time required to produce the total social product**), the ''total Value'' of a given branch of production (the Value of its total output),’" and the ''unit Value'' of a single commodity (the average Value in the sense defined above). All terms are defined over a given period of time.

=== 5. Money and Price ===
We turn now to the second aspect of exchange-value: how is "quantitative worth" actually expressed in exchange? To this Marx answers: in exchange, the "quantitative worth" of a commodity ''must'' take the form of money-price. Since exchange is the interchange of two commodities, at first glance it seems obvious that there are as many measures of a commodity’s worth as there are other commodities to measure it by. And historically, where exchange is sporadic or irregular, this is in fact true. But as exchange spreads and develops, this variety of different possible measures increasingly becomes a barrier to the smooth functioning of the process; without a point of reference, the direct comparison of every commodity with every other becomes impossibly complex. Consequently it becomes increasingly necessary to socially recognize a given commodity out of those available as the one commodity in which all others are to express their "worth"; this special commodity therefore becomes the universal equivalent, the money-commodity. We will henceforth assume it is gold.*

Notice that money does not by itself cause commodities to have "worth," any more than gram-weights cause stones to have weight. On the contrary, it is only because both gold and the other commodities have "quantitative worth" (exchange-value) in the first place that we can express their worth of commodities in terms of gold. The money-price of a commodity is the "golden" reflection, the external measure, of its exchange-value. It is what Marx calls the ''form'' taken by Value during exchange.18

=== 6. Production and Circulation ===
The foregoing analysis has focused on the difference between Value and money-price. Implicit in this distinction, however, is another equally important one: the Marxian distinction between the production of commodities and their circulation.

Production, Marx notes, is the creation or transformation of a use-value.19 Insofar as the product is a commodity, it belongs to some individual; it enters circulation, therefore, as private property.

Consider the case of two commodity producers, a fisherman and a hunter. They bring definite quantities of fish and game, respectively, to the market for the purpose of exchange; commodities with definite Values representing definite quantities of abstract labor-time thus enter the market-place.

Now what happens in exchange? In the exchange process the two commodity producers negotiate terms under which they will ''transfer the titles'' to their respective commodity property.20 But note: the time they spend bargaining over these terms of trade will in no way increase the total amount of fish or game to be had; it will determine only the final pattern of distribution.21 In fact, insofar as they need to subsist during the actual process of exchange itself, their<blockquote>costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third [person to perform] these exchanges, and thus lost no labour time directly, then each of them would have to cede a proportional share of his product to [that third person]...

Circulation costs as such, i.e. consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange..., are therefore a deduction either from the time employed on production, or from the values posited by production. ''They can never increase the value''. They belong among... the inherent costs of production resting on capital. (Marx, ''Grundrisse'', Notebook VI, pp. 632-633. Emphasis added) </blockquote>This is a very important point in Marx’s analysis. The circulation process is the process whereby commodities change hands, where their titles of ownership are transferred. As such, no commodities and hence ''no Value is created in the circulation process''.22 If anything, part of the previously produced mass of commodities (and hence the Value previously created in production) may be used up just in the struggle over its distribution.

One immediate implication of this is that the categories of circulation are thereby limited by those of production.* Value is created in production, materialized in commodities; ''regardless of the actual money prices at which these commodities are sold'', only the same mass of commodities (and hence the same amount of Value) exists after the sales as before. Different price relations will therefore give rise to different distributions of the total commodity-product, and of the total sum of Values, but they cannot by themselves change these totals. It is on this basis that Marx argues: <blockquote>If commodities are sold at their values, then the magnitude of value in the hands of the buyer and seller remains unchanged. Only the form of existence of value is changed. If the commodities are not sold at their values, then the sum of converted values remains unchanged; the plus on one side is a minus on the other. (Marx, ''Capital'', Volume II, Ch. VI, Section 1.1, p. 129) </blockquote>

=== 7. The Importance of Prices ===
In commodity producing societies the object of production is not direct use, but personal gain through exchange. Individuals produce without any apparent social regulation. Nonetheless, they too exist within a social structure. For each individual to be able to specialize in producing for exchange, others must do so too; for exchange to proceed without rupture, the various products must correspond to the various social needs. Since under this form of social organization the correspondence between the various social needs and the distribution of social labor required to satisfy these needs cannot be brought about directly, it must be done indirectly. What in other societies is a direct evaluation of the importance of a particular type of labor in terms of its concrete product, becomes in commodity producing societies the indirect evaluation of this labor—through the "quantitative worth" of its product. It is only in exchange that the true social nature of commodity production is made apparent; and precisely because commodity production is undertaken for personal gain, for the money which is to be made, ''it is the money-prices of commodities that serve as the immediate regulating mechanism of the system''. Far from being a "veil," money constitutes a very important feedback mechanism.

It follows from the above that the laws which determine money magnitudes such as prices, profits, and wages, are of the utmost importance in understanding the laws of motion in capitalism.*

Now of course it was known well before Marx’s time that supply and demand were the immediate determinants of actual market phenomena. But even classical political economy was aware that over the course of time the ceaselessly fluctuating interplay of supply and demand was itself regulated by a much more fundamental principle: the Law of Equal Profitability.

For instance, if as a result of market conditions a particular sector’s rate of profit rose above the average rate, then the flow of capital would tend to be biased towards that sector, causing it to grow more rapidly than demand, and driving down its market price to a level consistent with average profitability. Conversely, the sectors with low profitability would tend to grow less rapidly than demand, causing their prices and profitability to rise.

The classical economists were thus able to demonstrate that behind the continuously varying constellation of market prices there lay another set of prices, acting as "centers of gravity" of market prices and embodying more or less equal rates of profit. The name given to these regulating prices in classical political economy was natural prices; Marx calls them prices of production. Their discovery was the first great law of prices.

By David Ricardo's time, the problem had moved on to a higher level. What Ricardo sought to do, for instance, was to go one step further and look behind prices of production themselves, to discover ''their'' "centers of gravity." That is, just as the market price of a commodity was shown to be regulated by its price of production, Ricardo sought to show that this regulating price was itself subject to a hidden regulator—the total quantity of labor time required to produce the commodity, both in its direct production and in the production of its means of production. <blockquote>In speaking... of the exchangeable value of commodities, or the power of purchasing possessed by any one commodity, I mean always that power which... is natural price. (D. Ricardo, 1962, p.92)

The great cause of the variation in the relative value of commodities is the increase or diminution in the quantity of labour required to produce them. (''Ibid''., p. 36) </blockquote>There we have it: the ''great'' cause of the variations in the (relative) price of production of a commodity is the variations in the total labor time that goes, directly or indirectly, into its production. The total quantity of labor time was the center of gravity of the commodity’s price of production, just as this price of production was itself the center of gravity of its market price. This was Ricardo’s attempt to formulate a second great law of prices.

What Ricardo perceived was that there was an intrinsic connection between the "quantitative worth," the exchange-value, of commodities, and the total labor-time required for their production.24 This, according to Marx, was Ricardo’s great scientific merit.25 But at the same time Ricardo was trapped by the conceptual framework of bourgeois political economy, which saw all production as being alike. He was consequently unable to distinguish concrete labor, an aspect of all social production, from abstract labor, an aspect which only commodity producing labor takes on. Ricardo therefore misses the difference between Value and the form of Value. Instead of recognizing price as the manner in which the exchange process reflects Value, and developing the various intermediary links between the two, he attempts instead to fuse them together through his law of prices. His failure to adequately distinguish between Value and price is, according to Marx, the first great source of error in his analysis.26

In addition to that, however, there is another problem. How can Ricardo attempt to analyze the effects of a uniform rate of profit on prices, asks Marx, when he nowhere discusses what determines the ''level'' of this rate of profit? And this in turn leads to an even more basic question. A uniform rate of profit is simply a way of saying that profits on different capitals are proportional to the size of these capitals: that is, each capital gets a share of total profit in proportion to its own size. But Ricardo nowhere discusses what determines aggregate profit in the first place. How then can he attempt to isolate the factors which regulate the movements of prices of production when he is missing a crucial ingredient—profit?

It is therefore apparent to Marx that even given the relation between Value and money price which he himself derives,27 the specific manner in which Value regulates price cannot be developed without first showing how profit arises. And this, as we shall see next, leads Marx to the concept of surplus-Value.

== III. Surplus-Value and Profit ==

=== 1. The Circulation of Money and the Circulation of Capital ===
We have up to now focused on the relationship of the circulation of commodities to their production; on the basis of this we were able to derive the categories of Value, money, and price, and discuss their mutual interrelationship. But the very existence of the circulation of commodities within a capitalist mode of production immediately implies that, for those who function as capitalists, the process of circulation is itself a means to realizing a profit: where then does the profit of the capitalist class as a ''whole'' come from?

Marx begins by noting that once we consider commodity production within the context of capitalist production, the overall process of circulation is in reality two different processes with different functions and hence different laws. In the first process, the owners of commodities (<math display="inline">CC</math>) exchange them for money (<math display="inline">M</math>) in order to be able to use this money to buy other commodities (<math display="inline">CC</math>) for the purpose of consumption.* This circuit in the overall circulation process therefore has the form <math display="inline">CC \rightarrow M \rightarrow CC</math>, and is the aggregate of the exchanges of one set of commodities for what is, under the existing conditions of exchange, an equivalent set. In this process money is an intermediary between two sets of commodities; once acquired it is spent, and for the individuals involved in it, the process terminates in consumption. Marx calls this "selling in order to buy";28 in it, money functions as money only.

In the second circuit, however, the owners of money (<math display="inline">M</math>) exchange it for commodities (<math display="inline">CC</math>) in order to get more money (<math display="inline">M' = M + \Delta M</math>), i.e., in order to make a profit <math display="inline">\Delta M</math>. Money here is not spent, it is merely ''advanced'' in order to make more money, through the intervention of commodities. The process of <math display="inline">M \rightarrow CC \rightarrow M'</math>, tends to be self-perpetuating, since it can always lead into <math display="inline">M' \rightarrow CC \rightarrow M''</math>, etc. The initiators of this process function as capitalists: <math>M \rightarrow CC \rightarrow M'</math> "is therefore in reality the general formula of capital as it appears ''prima facie'' within the sphere of circulation."29 Marx calls this second process "buying in order to sell";30 in it, money functions as ''capital''. It makes a profit. But how is it possible to make money by merely advancing money?

=== 2. Surplus-Value ===
The first step in the solution to the problem of profit is to recognize that it is not simply a question of money. Money, after all, represents a command over actual commodities, and hence over the actual labor-time materialized in them. If therefore in the circuit <math display="inline">M \rightarrow CC \rightarrow M + \Delta M </math>, the profit of the capitalist class (<math display="inline">\Delta M </math>) is to be something more than a monetary illusion, if it is to represent a potential increment in their real wealth, then ''their money profit <math display="inline">\Delta M </math> must itself be matched by an actual increment in the commodities available, and hence in materialized labor-time''. That is, <math display="inline">\Delta M </math> must be matched by an increment in the total Value of the commodities represented by <math display="inline">CC </math>. This increment in Value necessary for any real profit, Marx calls surplus-Value.

=== 3. Constant Capital ===
Ostensibly, the process of the formation of capital, as represented by <math display="inline">M \rightarrow CC \rightarrow M'</math>, is a process occurring wholly within circulation. But Value is itself a result of production; it cannot be created in circulation, and hence neither can the necessary increment in Value, surplus-Value. Surplus-Value, if it is possible at all, can only arise from production. And indeed, if we examine <math display="inline">M \rightarrow CC \rightarrow M'</math> more carefully, we find that the first stage involves the purchase of human and nonhuman inputs required for production, whereas the final stage involves the sale of the outputs of production. The commodities purchased as inputs and the commodities sold as outputs are in fact not the same, and it is the intervention of ''production'' which distinguishes them. The formation of capital, which appears to exist solely within circulation, in reality encompasses a process of production; properly speaking, it should be represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, with the stage <math display="inline">CC ... P ... CC' </math> representing the effect of production. Not just production or even just commodity production but, as we shall see, capitalist commodity production.

Means of production and laborers combine in all production. But in commodity production, the means of production are themselves commodities, and as such represent, in their total Value, the quantity of abstract labor-time that was socially necessary for their own production. If we examine the process of production over a period of time sufficiently long so that even the most durable means of production are entirely used up, then it becomes clear that the Value of the means of production must become incorporated into the commodities produced over this period. The bodily forms of the means of production either wear out (as with machines) or are physically incorporated into the product (as with raw materials); but precisely because these means of production are socially necessary under existing conditions, the abstract labor-time represented by them is also (indirectly) socially necessary for the production of the commodities. It is a necessary component of the total Value of the product. From the point of view of Value, therefore, the means of production only contribute as much Value as they actually contain. As such they cannot be the source of the increment in Value upon which any nonillusory aggregate profit must be based; Marx therefore calls the capital advanced in the form of the means of production "constant capital."

=== 4. The Value of Labor-Power ===
The formation of capital, the process represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, presupposes not just commodity production but capitalist commodity production. And under capitalist commodity production, not only are the products of labor bought and sold as commodities, but so too is the very capacity-to-labor itself.

This capacity-to-labor, which Marx calls labor-power, is "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description."31 In all societies, it is the basis of the productive activities of human beings; but for this fundamental human property to become a thing to be bought and sold, a commodity, it must exist within a specific social context. Not only must the laborer have the legal title to his labor-power, he must also be obliged to sell it and not other commodities. He must be free not only to dispose of his own labor-power as a commodity, but also "free" of the means of production which might enable him to be a producer of other commodities. He must be a wage-laborer.

The Value of the commodity labor-power, like that of every other commodity, is determined by the abstract labor-time socially necessary for its production under existing conditions. Since labor-power is a capacity of living beings, its production implies their continued maintenance and reproduction; hence it implies a given quantity of commodities as means of subsistence, sufficient not only to maintain laborers in their normal state as laborers but also sufficient to support their families so that they may as a class continue to perpetuate themselves.* The Value of the means of subsistence of the total workforce is therefore the abstract labor-time socially necessary for their maintenance and reproduction, and hence is the measure of the Value of their labor-power (<math display="inline">V</math>).

When a capitalist purchases the commodity labor-power, he purchases the capacity-to-labor of workers, and in order to utilize this commodity he must extract as much labor-time from these workers as he can. The concrete functions that workers perform in their productive activities involves the transformation of the means of production into specific commodities; as such, the time spent by workers in these activities is itself a quantity of socially necessary abstract labor-time (<math display="inline">L</math>), which is in effect incorporated into the commodities. From the social perspective of Value, therefore, workers add a quantity of Value (<math display="inline">L</math>) to the Value (<math display="inline">C</math>) contained in the means of production they use up.

=== 5. Surplus Labor-Time ===
Capitalist production begins with the commodities <math display="inline">CC</math>, means of production and labor-power; as commodities they represent a definite quantity of Value, <math display="inline">C+V</math>. In a period of time sufficiently long, the entire Value <math display="inline">C</math> of the means of production will be ''transferred'' to the product. On the other hand, the Value <math display="inline">V</math> of labor-power employed in this period is ''replaced'' with the Value added to <math display="inline">L</math> by workers in the form of the amount of labor-time they actually spend in production. Thus while the Value of the initial commodities is <math display="inline">C + V</math>, the Value of the final product is <math display="inline">C + L</math>. The formation of capital, which we have represented as <math display="inline">M \rightarrow CC ... P ... CC \rightarrow M + \Delta M </math>, can therefore also be represented by <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M + \Delta M</math>. Clearly, ''surplus-Value, the Value increment <math display="inline">S =(C+L)=(C+V)=L-V</math> which is necessary to match the money increment <math display="inline">\Delta M</math> can arise if and only if the labor-time (<math display="inline">L</math>) put in by workers is greater than the labor-time (<math display="inline">V</math>) socially necessary for their reproduction''.

The same result can be derived differently. Imagine for a moment that at any given level of technology, workers in all branches of production work just long enough to produce the commodities necessary for the needs of the working class as a whole and to replace the means of production they use up in this process. Under these circumstances, no matter how "advanced" the technology, there can exist no social surplus, and hence no basis for capitalist profit. If, and only if, workers can and actually do work longer than the time necessary to maintain themselves and the means of production, will there arise a continuing social surplus; the time spent by workers in producing this surplus, their surplus labor-time, is therefore the real basis of capitalist profit. And of course since the necessary labor-time described above is none other than the aggregate value of labor-power <math display="inline">V</math>, the surplus labor-time is none other than aggregate surplus-Value <math display="inline">S</math>.32 Once again we see that surplus-Value is the "hidden basis" of any real capitalist profit.

None of this, by the way, implies that Marx intended the labor theory of value as a theory of property rights, ''à la'' Locke or even Proudhon. Marx’s goal was a scientific analysis of capitalism, not a mere moral critique.33

== IV. The Transformation from Direct Prices to Prices of Production ==

=== 1. Exchange at Values: Direct Prices ===
In the Marxist conception of exchange-as-the-circulation-of-commodities, the total labor-time materialized in commodities during their production is the basis for their exchange-value and money-price, while the surplus labor-time materialized in them is the basis of the capitalist profit to be realized from their sale. Without a proper understanding of the quantitative and qualitative relationships between the sphere of production and the sphere of circulation, of the ''limits'' imposed on circulation by production, the laws of circulation must remain a mystery. Neoclassical economics is a testament to this.

For Marx, it was absolutely critical that the dominance of production over circulation be properly understood. It is in production that capitalist wealth is created and expanded, and Value and surplus-Value are materialized in commodities. Circulation, as we have seen, is the process whereby the previously created use-values are transferred from one hand to another, by means of money-prices.

Two things follow from this. First of all, it is in circulation that the Value magnitudes take their money-forms: Value takes the form of money-price, surplus-Value the form of money-profit; and secondly, neither Value nor surplus-Value are created in circulation, precisely because in this process commodities are merely exchanged, not created. This means that regardless of the actual money-prices involved, there can be no ''real'' increase in capitalist wealth through circulation.

It is obvious that the most direct way to explore the production and expansion of capitalist wealth is to assume that exchange takes place in proportion to the Values of commodities, so that the money-price of every commodity is equal to its Value relative to the Value of the unit of money (say one ounce of gold). I will henceforth call prices so determined "''direct prices''."

When indeed the analysis is begun this way, as Marx does in Volumes I and II of ''Capital'', it becomes clear that none of the basic categories of capitalist circulation, the categories of capital and labor, money and price, and wages and profits, owe their existence to any ''deviations'' of relative prices from relative Values. <blockquote>The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents... the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not be interfered with by disturbing circumstances that have nothing to do with the process in question. (''Capital'', Vol. I, Ch. V, p. 166, text and footnote 1.)</blockquote>

=== 2. The Conceptual Basis for Prices of Production ===
There is yet another reason for beginning with direct prices (exchange at values): the major ''systematic'' deviation of relative prices from relative Values arises when commodities exchange at "prices of production." But prices of production are prices which reflect a general rate of profit; and a general rate of profit in turn presupposes the existence of profits. Prior to any question about the formation of a general rate, therefore, is the question about the source of profit.34 This question leads Marx to surplus labor-time and hence to surplus-Value, and once again the analysis comes to Value.

The path from Value back to price of production involves two major steps. First, one must examine and understand prices and profits in general; this was done through the analysis of the relationship of production to circulation, and of the relationship of Value to money. Second, since prices of production must reflect a general rate of profit, one is led to an analysis of the formation of this general rate out of the individual rates of profit in each sector of production. We turn to this now.

Let us recall that the general process for the formation of capital could be written as <math display="inline">M \rightarrow C+ V ... P ... C+L \rightarrow M'</math>, where M is the money price of commodity inputs into production: the means of production having the Value <math display="inline">C</math> and labor-power having the Value <math display="inline">V</math>. <math display="inline">M'</math>, on the other hand, is the money price of the commodity outputs of production; their total Value is <math display="inline">C + L</math>. By definition, <math display="inline">S=L-V</math>.

In money terms, the general money rate of profit is <math display="inline">r = (M' - M)/M</math>, the aggregate profit <math display="inline">M'- M</math> divided by the capital advanced <math display="inline">M </math>. In terms of Value, the general ''Value'' rate of profit is <math display="inline">\rho = S/(C+V)</math>, the aggregate surplus-Value <math display="inline">S </math> divided by <math display="inline">C+V</math>, the Value of the inputs. Obviously, if prices are proportional to Values, then the general money rate of profit must equal the general Value rate of profit: <math display="inline">r = \rho </math>.

We now consider two individual circuits of capital involving sectors of production I and J, as represented by <math>M_i \rightarrow (C_i+ V_i) ... P ... C_i + L_i \rightarrow M'_i </math>; and <math display="inline">M_j \rightarrow (C_j+ V_j) ... P ... C_j + L_j \rightarrow M'_j </math>, respectively. If prices are proportional to Values, then in each sector the sectoral Value and money rates of profit are the same. We need therefore deal only with the Value rates <math>\rho_i = S_i/(C_i+V_i)</math> and <math display="inline">\rho_j = S_j/(C_j+V_j)</math>.

The first question we must then ask is: are these two Value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> generally equal? For ''if'' they were, then at prices proportional to Values each sector would have the same money and value rates of profit, and no movement of prices would be necessary to equalize the individual rates of profit. To facilitate the answer, Marx rewrites each expression for the value rate of profit by dividing both the numerator and denominator of each fraction by the Value of labor-power V:

<math display="block">\rho_i = \frac{S_i}{V_i} \bigg| \frac{C_i+V_i}{V_i} \qquad \text{and} \qquad \rho_j = \frac{S_j}{V_j} \bigg| \frac{C_j+V_j}{V_j}</math>

Each Value rate of profit is therefore itself the ratio of two component ratios: <math display="inline">S/V</math>, which Marx calls the rate of surplus-Value, and <math display="inline">(C + V)/V</math>, which he calls the organic composition of capital. We will deal with each in turn.

==== ''A. The Equality of Rates of Surplus-Value'' ====
For society as a whole in any given period, the productive activities of workers may be viewed as a certain aggregate quantity of labor-time <math display="inline">L</math>. But the very fact that the concrete labor-times of different workers can be added together requires that they have already in some way been made qualitatively equal, that they have been reduced to quantities of some ''general'' social labor-time, what Marx calls "abstract" labor-time. This reduction of concrete labor-times to abstract labor-time is of course a consequence of generalized commodity production, as discussed in the section on Value (II.4); for our purposes, what is important in this is that it implies that the labor-time of each worker represents a definite quantity of abstract labor-time.35

Of the aggregate labor-time <math display="inline">L</math>, a certain portion <math display="inline">V</math> represents the time socially necessary for the production of the means of subsistence of the working class, and the remainder <math display="inline">S</math>, the aggregate surplus labor-time, constitutes the surplus-Value materialized in commodities during their production. If the working day is the same in all branches of production, then each worker adds the same amount of Value to the product, in a given time period (like a day). If the wage rate for a given type of work is the same in all branches, then each worker can purchase the same share of the aggregate means of subsistence; a uniform wage thus represents a given quantity of (abstract) labor-time (say 4 hours a day) which each worker must put in to reproduce the Value of his or her labor-power. Clearly, if the length of the working day (say 10 hours) is indeed the same in all branches, each worker will work the same amount of surplus labor-time (6 hours a day). That is, in each sector, the rates of surplus-Value will necessarily be equal. These rates, therefore, cannot be the source of any differences between the Value rates of profit <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math>.

==== ''B. The Inequality of Organic Compositions of Capital'' ====
The above results imply that in any one sector, say sector J, <math display="inline">V</math> is an index of the total quantity of labor-time <math display="inline">L</math> worked in that sector, since any one hour of abstract labor-time requires the fraction <math display="inline">v</math> for its reproduction: <math display="inline">V = vL</math>. The quantity <math display="inline">C</math>, the value of the means of production in this sector, is, on the other hand, an index of the specific types and quantities of commodities which enter into this process of production as means of production. In general, therefore, unless each sector employs the same types of commodities and labor-powers in the same proportions as every other sector, the ratios <math display="inline">C_i/L_i</math>; and <math display="inline">C_j/L_j</math> will differ. Since <math display="inline">V_i</math>; and <math display="inline">V_j</math> are indexes of <math display="inline">L_i</math> and <math>L_j</math>, in general the organic compositions <math display="inline">(C_i +V_i)/V_i</math>; and <math display="inline">(C_j + V_j)/V_j </math> will differ.

To reiterate Marx’s conclusion: in general, the sectoral rates of surplus-value will be equal, but the organic compositions of capital will not. Hence in general the value rates of profit will differ from sector to sector.

==== ''C. The Deviation of Prices of Production from Direct Prices'' ====
Let us now return to the two circuits of capital <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math display="inline">M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>. We began earlier by noting that ''if'' prices were proportional to Values, the money rates of profit <math display="inline">r_i = (M'_i - M_i) / M_i </math> and <math display="inline">r_j = (M'_j - M_j) / M_j </math> would be equal to the corresponding Value rates of profit <math display="inline">\rho_i = S_i/(C_i + V_i)</math> and <math display="inline">\rho_j = S_j/(C_j + V_j)</math>. If in addition the Value rates of profit were themselves equal to each other, then at direct prices, capital in each circuit would realize the same ''money'' rate of profit and no movement of prices would be necessary to bring these money rates into line with the general rate.

We have just seen, however, that in general the sectoral rates will differ; if for instance <math display="inline">\rho_i</math> was greater than <math display="inline">\rho_j</math>, the capital invested in sector <math display="inline">I</math> would, with prices proportional to Values, earn a higher money rate of profit than would capital invested in industry <math display="inline">J </math> (<math display="inline">r_i = \rho_i > r_j = \rho_j </math>). ''To equalize these money rates, therefore, relative prices would have to deviate from relative values'' in such a way as to lower <math display="inline">M'_i</math> relative to <math display="inline">M_i</math> and to raise <math display="inline">M'_j</math> relative to <math display="inline">M_j</math>, for only in this way would the higher money rate of profit <math display="inline">r_i</math> be reduced and the lower money rate <math display="inline">r_j</math> be raised.

In any sector <math display="inline">K</math>, <math display="inline">M'_k</math>, represents the money price of the commodities produced, what I called earlier the sector’s total price; <math display="inline">M_k</math>, on the other hand, is the money price of the sector’s commodity inputs (means of production and labor-power), what Marx calls its (money) cost-price. Since both the total price <math display="inline">M'_k</math> and the cost-price <math display="inline">M_k</math>, are in essence determined by the prices of commodities, any movements of relative prices, including the ones under consideration here, will in general change both <math display="inline">M'_k</math>, and <math display="inline">M_k</math>: the overall price movements necessary for the formation of a general rate can therefore be quite complicated, as Sraffa has so elegantly demonstrated.36

Nonetheless, beginning from prices proportional to Values, for any sector <math display="inline">I</math> whose Value rate of profit <math display="inline">\rho_i</math> is higher than the average Value rate <math display="inline">\rho</math>, its total price <math display="inline">M'_i</math> must fall relative to its cost-price <math display="inline">M_i</math>, in order to bring its money rate of profit <math display="inline">r_i</math> into line with the general money rate <math display="inline">r </math>. The opposite movement must take place for a Sector <math display="inline">J</math> whose Value rate of profit <math display="inline">\rho_j</math> is lower than the average Value rate <math display="inline">\rho</math>.

Since the differences in the value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> upon which these price movements are predicated are themselves a consequence of the differences between sectoral organic compositions of capital, one may equally well say that, beginning from prices proportional to Values, a sector’s total price must fall (or rise) relative to its money cost-price according to whether its organic composition of capital is lower (or higher) than the social average, if its particular money rate of profit is to conform to the general rate.

It does not follow from the above, however, that the general ''money'' rate of profit will continue to equal the general ''Value'' rate of profit, once prices deviate from a strict proportionality with Values. To see why, let us recall that <math display="inline">M'</math>, the aggregate price of commodities, is the total price of the commodities which form the social product. On the other hand, the aggregate cost-price <math display="inline">M</math> is the total price of the commodities, the means of production and the labor-power, which form the inputs into the aggregate process of production. Since the price of labor-power is determined by the price of its means of subsistence the aggregate cost-price <math display="inline">M</math> is in effect the total price of the means of production and the means of subsistence.

Suppose the social product was 100 bushels corn and 100 tons iron. <math display="inline">M'</math> would be its total price. In general, the aggregate means of production and means of subsistence will also consist of quantities of one or both of these commodities, say 80 bushels corn and 60 tons iron. <math display="inline">M</math> would then be their total price. Because these two aggregate "bundles" of commodities will generally differ in their proportions of corn to iron, as is true of the case illustrated above, any movement in the price of corn relative to iron will affect them unequally. Hence ''any'' movement of relative prices will in general change the ratio <math display="inline">M'/M</math> or equivalently, the general rate of profit <math display="inline">r = [(M'-M)/M] = [(M'/M)-1] </math>.

The quantity <math display="inline">M'</math> is of course the sum of prices, while the quantity <math display="inline">\Delta M = M' - M </math> is aggregate money profit. The above result may therefore be stated in an equivalent form: in general, ''any deviations of relative prices from relative Values, including but not only'' those which arise from the formation of a general money rate of profit, ''will make it impossible for both the sum of money prices <math display="inline">M'</math> and the sum of money profits <math display="inline">\Delta M</math> to remain strictly proportional to the sum of Values'' <math display="inline">C + L</math> ''and the sum of surplus-Values'' <math display="inline">S</math>'', respectively''. This result is well known in the debate about the so-called transformation problem; but as it is stated above, it arises in a broader context. In any case, in order to discern its real content, we must examine matters a bit more carefully.

=== 3. Some General Effects of Price-Value Disproportionality ===
In much of the literature on the "transformation problem," there is a great confusion between Values, prices proportional to Values (what I call direct prices), and prices of production. In particular, since direct prices are so simply related to Values, the general issue of the differences between price and Value, and profit and surplus-Value, tends to be taken up only when we turn to prices of production. All of a sudden, we are confronted with the impossibility of a simple proportionality between Value magnitudes and their money-forms, and it begins to seem as if the analysis of Value is something quite separate from the analysis of price. 37

For this reason, I have attempted throughout this paper to carefully distinguish between Value, which stems from production, and money-price, which is the form taken by Value in circulation. With this distinction in hand, it is possible to see that money-magnitudes are ''always'' different, both qualitatively and quantitatively, from Value magnitudes. Marx notes, for instance, that precisely because the form of Value is not the same thing as Value, the determination of money-price is a ''complex combination'' of its Value elements.

Consider the simplest case, that of direct prices. Suppose the Value of a gold coin weighing 1/4 ounce (which we call a "£")* is 1/2 worker-hour, while that of a bushel of wheat is 100 worker-hours. The direct price of wheat will then be £200. Even right here, Value (100 hours) and price (£200) are both qualitatively and quantitatively different (though related) magnitudes, with different units.

Now suppose the Value of wheat falls by half, to 50 worker-hours. How will this be reflected in its direct price? Well, says Marx, that depends; if the Value of gold also fell by a half, the money-price of wheat would remain constant at £200; if the Value of gold fell by more than a half, the money-price of wheat would rise even though its Value fell!38 Even in this simple case, therefore, the laws which determine the money-form of Value are more complex than those which determine Value itself. But this is hardly an analytical defect; on the contrary, it is the whole point of theoretical analysis to be able to derive more complex categories from basic ones.

If indeed price and Value are always distinct, what exactly is the "transformation" issue about? Clearly, it is about a ''transformation in the form-of-Value''; it is a transformation from the direct expression of Value (direct prices) o a more complex expression (prices of production). What we have to do, therefore, is to see what is altered by this change in form, and what is not.

We begin by noting that what we are considering here is a ''pure'' change of form. For instance, in the traditional formulation of the transformation we analyze a capitalist society in a simple or extended reproduction, first when exchange is ruled by direct prices, and then when it is ruled by prices of production.** In both cases, the composition and distribution of the use-values is the same: the same mass of commodities is circulated in either case, with the same physical composition of means of subsistence and surplus-product. Thus the same total commodity Value, the same aggregate Value of labor-power, and the same aggregate surplus-Value, is circulated by the two different price-forms. From the point of view of the system as a whole, the transformation leads to no real change; all that changes is the manner in which given production relations are manifested in circulation.

From the point of view of individual capitals, however, the situation is indeed different. With direct prices, each capitalist realizes an amount of money profit proportional to the surplus-Value contained in the commodities he sells. With prices of production, each sector’s money profit is no longer proportional to its surplus-Value; since the sum of Values (and hence the total surplus-Value) circulated is still the same as before, the above change of form has the effect of redistributing surplus-Value from one sphere of production to another. <blockquote>The fact that prices diverge from [proportionality with] values cannot, however, exert any influence on the movements of social capital. On the whole, there is the same exchange of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by everyone of them. (Marx, ''Capital'', Volume II, Ch. XX, Section 1, p. 393)

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (Marx, ''Capital'', Volume II, Ch. II, p. 43) </blockquote>What has been said above in fact applies to any set of prices which differ from direct prices, not just to prices of production. What it shows is that there are limits to the effects of different forms of Value, and that these limits arise precisely in the Value magnitudes whose distribution is brought about through these money-forms.

It does not follow from this, however, that the determination of money-prices is of no consequence. Different forms of Value have different ''real'' effects on individual capitals, and these in turn have different implications for the dynamic process of accumulation and reproduction. It is through the actual movements of money-prices that the system is regulated; as such, the analysis of prices of production (which act as centers of gravity of market prices), and of their relation to Values, is of the utmost importance to concrete analysis. The first step (which in most discussions of the "transformation problem" is the ''only'' step) along this path is the derivation of prices of production from direct prices.

=== 4. The Calculation of Prices of Production ===
In general, we may characterize any two circuits of capital as <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math>M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>.

When exchange is at Values, the money rate of profit in each circuit will equal the Value rate of profit in that circuit. Since Value rates will in general differ from sector to sector, owing to differences in their organic compositions of capital, exchange at Values will imply unequal rates of profit in different sectors, and hence in different circuits of capital.

It follows from the above that the formation of a general rate of profit out of the various individual rates of profit will require that for a sector with a Value rate of profit higher than the social average, the money price of its product <math display="inline">M'_i </math> must fall relative to its money cost-price <math display="inline">M_i </math>, since only this movement will lower its money rate of profit <math display="inline">r_i </math>. As we saw earlier in section III.2.C, this ''must'' hold regardless of how complicated the effects of the formation of a general rate of profit on the overall pattern of prices. And as we shall see immediately, ''it is precisely this movement which is captured by Marx’s own transformation procedure''.

==== ''A. Marx's Transformation Procedure'' ====
The example below illustrates the three basic circuits of capital in Marx’s analysis: Circuit I represents the production of the means of production themselves, Circuit II the production of the means of subsistence of the working class, and Circuit III the production of the means of consumption of the capitalist class. The example itself, though from Bortkiewicz, not Marx, is used because it is the standard illustration of the so-called transformation "problem" and appears in most discussions of the issue.

Because we have throughout distinguished between Value and money-price and because the issue at hand centers on differences in their magnitudes, we must be careful with notation. As defined earlier, <math display="inline">C_i</math> will represent the value of the means of production of the <math display="inline">i </math>th department, <math display="inline">V_i</math> the value of the labor-power employed there, and <math display="inline">S_i=L_i-V_i </math> the surplus-value produced there; the total value <math display="inline">C_i + L_i</math> produced will be designated by <math display="inline">W_i </math>. In contrast, <math display="inline">MC_i </math> will represent constant capital, the money price of the means of production used in the department, and <math display="inline">M V_i </math> variable capital, the money price of the labor-power used there; as before, <math display="inline">M_i </math> will be the total cost-price and <math display="inline">M'_i </math> the total price of the product. All Value quantities will be in units of (abstract) labor-time, worker-hours, and all money quantities in £'s (1/4 ounce gold coins). It is also assumed that each £-coin has a Value of 1/2 worker-hour.

When exchange is at Values, we get the results shown in Table 1. It should be noted that the table has been designed to correspond to the whole circuit of capital, <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M'</math>, so that the phases of circulation are clearly distinguished from those of production.
{| class="wikitable"
|+Table 1 / Exchange at Values
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
! colspan="2" |<math display="inline">... (C+L) </math>
! colspan="2" |<math display="inline">\rightarrow M' </math>
|-
|
!Constant Capital (MCi)
!Variable Capital (MVi)
!Cost-price (Mi)
!Value of Means of Prod. (Ci)
!Value of Labor-Power (Vi)
!Surplus Value (Si)
!Total Value (Wi)
!Value Rate of Profit % (Pi)
!Total Price (M'i)
!Total Profit (ΔMi)
|-
|(Means of Production)
|450
|180
|630
|225
|90
|60
|375
|19.05
|750
|120
|-
|(Means of Subsistence)
|200
|240
|440
|100
|120
|80
|300
|36.36
|600
|160
|-
|(Capitalist Consumption)
|100
|180
|280
|50
|90
|60
|200
|42.85
|400
|120
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|
|£1750
|£400
|}
Marx’s transformation procedure is simple: noting that in Table 1 the total cost-price <math display="inline">M </math> = £1350 (column 3) and the total money profit <math display="inline">\Delta M </math> = £400 (column 10), we get an average rate of profit on social capital of <math display="inline">r= 400/1350 = 29.63 \% </math>.

At existing prices, however, the capital in circuit I, invested in department I, would realize only a 19.05% rate of profit. Thus, in order to raise its money rate of profit to the average level, it must raise its money price. Since its money cost-price is £630, the "normal" profit that it would earn at the average rate of profit is 29.63% of £630, which is £186.67: the level to which it must raise its price therefore is given by M' = £630 + £186.67 = £816.67. Similarly, department II must lower its money-price to M' = £570.37, and department III must lower its to M'= £362.96 (see Table 2).
{| class="wikitable"
|+Table 2 / Max's Transformation
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
!<math display="inline">... (C+L) </math>
!<math display="inline">\rightarrow M' </math>
!
!
|-
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi'
!ΔMi
!ri
|-
|I
|450
|180
|630
|225
|90
|60
|375
|816.67
|186.67
|29.63
|-
|II
|200
|240
|440
|100
|120
|80
|300
|570.37
|130.37
|29.63
|-
|III
|100
|180
|280
|50
|90
|60
|200
|362.96
|82.96
|29.63
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|}
Table 2 illustrates Marx's transformation procedure. In it, the transformation ''per se'' refers to the movements of money-prices, ''not'' to changes in the Value flows. ''Moreover, the direction of movement of money prices'' <math display="inline">M'_i </math> ''to their corresponding cost-prices'' <math display="inline">M_i </math> ''is the correct one'': <math display="inline">M'_1 </math> rises relative to its cost-price, and <math display="inline">M'_2 </math> and <math display="inline">M'_3 </math> fall relative to theirs.

==== ''B. The "Correct" Prices of Production'' ====
From Bohm-Bawerk onwards, critics have argued that Marx’s procedure was simply incorrect. They pointed out, for instance, that his transformation leaves the money prices of inputs (MC;, MV;) unchanged, whereas a thoroughgoing transformation would change these too. Marxists have countered these charges by claiming that, in any case, one can show the formal possibility of deriving prices of production from direct prices; in the Bortkiewicz method, for example, one can solve for a series of price multipliers which would enable one to transform the exchange-at-Values scheme of Table 1 to the "correct" exchange-at- prices-of-production scheme.39 Then, depending on whether one prefers the sum of prices or the sum of profits as constant, one can always "normalize" the multipliers derived from the Bortkiewicz method to make one or the other hold, for in general both cannot.

Even if the controversy about the appropriate "normalization," much of which arises from a confusion between Value and money-price, is satisfactorily resolved, the real problem with all of these foregoing transformation procedures remains: they effectively sever the link between Values and money-prices, or at least bury it in algebra, and are forced to reject Marx’s own procedure as completely erroneous. Thus for instance in this example, the appropriate algebraic procedure would "jump" us from Table 1, representing exchange at Values, to Table 3 below, which portrays the "correct" price of production scheme under an (algebraically) arbitrary "normalization" which keeps the sum of money-prices (£1750) invariant to the transformation. In all of this, Marx’s own trans- formation, as represented in Table 2, plays no role at all.
{| class="wikitable"
|+Table 3 / The "Correct" Prices of Production
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi
!Delta Mi
!ri
|-
|I
|504
|168
|672
|225
|90
|60
|375
|840
|168
|25%
|-
|II
|224
|224
|448
|100
|120
|80
|300
|560
|112
|25%
|-
|III
|112
|168
|280
|50
|90
|60
|200
|350
|70
|25%
|-
!Total
|£840
|£560
|£1400
|375
|300
|200
|875
|£1750
|£350
|
|}

==== ''C. Marx's Transformation Procedure Extended'' ====
Marx himself never goes beyond the transformation procedure he illustrates in Volume III of ''Capital''. And yet in several instances, he indicates clearly his awareness of the issue:40 <blockquote>Aside from the fact that the price of a particular product... differs from its value... the same circumstance applies also to those commodities which form the constant part of (its) capital, and indirectly also its variable part, as the labourer’s necessities of life... Under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations. (''Capital'', Vol. III, Ch. IX, p. 161.)

The foregoing statements have at any rate modified the original assumptions concerning the determination of the cost-price of commodities... Since the price of production may differ from the value of a commodity, it follows that the cost-price of a commodity containing this price of production of another commodity may also stand above or below that portion of its total value derived from the value of the means of production consumed by it. It is necessary to remember this modified significance of the cost-price, and to bear in mind that there is always the possibility of error if the cost-price of a commodity in any particular sphere is identified with the value of the means of production consumed by it. Our present analysis does not necessitate a closer examination of this point. (''Ibid.'', pp. 164-65.) </blockquote>To his critics, especially to those for whom only the ''calculation'' of prices of production has any significance, Marx’s postponement of the "feedback" effects of the price-Value disproportionalities is an admission of failure—hence the so-called "great contradiction" between Volumes I and III.

But there is in fact a simple alternative: Let us extend Marx’s procedure by progressively "feeding back" the effects of the initial price-Value disproportionalities and see what happens. Table 4 illustrates this extended procedure. In order to emphasize the fact that the transformation and its extension affect only money flows M and M', and not the Value flows (C + V) ... P... (C+L), I have included both. This is somewhat tedious but it does make it clear that Value and surplus-Value are distinct from price and profit, a distinction which arises precisely from the difference between the spheres of production and circulation. But before we turn to this, we must first understand the logic involved.

We begin with exchange at Values (as was previously illustrated in Table 1). Let us now consider for a moment the real content of Marx’s transformation procedure. If prices were actually proportional to Values, then rates of profit in each sector would differ from the social average. All other things being equal, either the competition of capitals or the threat of this competition would force the various sectors to adjust the prices of their products in such a way as to realize only the average rate of profit. In Department’s II and III, for instance, which would have higher than average profit rates, either the threat of competition or else the actual inflow of capital would lower prices till only the average profit was obtained; in Department I, the reverse would take place.

In any real situation similar to the above, the actual adjustment process would involve changes in both the unit prices and the quantities sold; any actual inflow of capital would lower price through an expansion of supply; conversely, any lowering of price in response to the threat of competition would increase the amount sold.

But what we are interested in here is the pure change of form involved in the equalization of profit rates. And this, for a given mass of commodities, is an adjustment process ''which leaves the total sum of money prices unchanged'': since the cost-prices have already been incurred by the individual capitalist, the immediate burden of adjustment must fall upon current product prices, and their response in the face of capitalist competition is precisely to rise or fall till the individual rates of profit all equal the existing average rate. This simply means that the unit price of average commodity output is under no immediate compulsion to change, because in this case the rate of profit is the average rate. The average commodity, however, is only a microcosm of the total mass of commodities: the constancy of its price is therefore equivalent to the constancy of the total sum of prices.

Marx’s transformation procedure is merely an application of the logic of this adjustment process. In Table 4, the initial situation under consideration in Step 1A is exchange at Values: the sum of prices is £1750, and the sum of profits is £400. Step 1B then illustrates Marx's own transformation, in which the immediate process of adjustment redistributes the given mass of surplus-Value (whose magnitude cannot of course be changed in circulation) by raising prices in Department I and lowering them in II and III. The sum of money prices remains unchanged at £1750, and in this instance the sum of money profits also remains at its previous level of £400.

Expressed in proportion to its previous price, which was its direct price, the change in the money-price of Department I is Yy = 816.67/750 = 1.089. Similarly, ¥, = 0.951 and ¥ = 0.907.
{| class="wikitable"
|+
!
!
!
!
|-
|
|
|
|
|-
|
|
|
|
|-
|
|
|
|
|}
It is only in the next step, Step 2A, that we see the effect of the above deviations from direct prices on the cost-prices in each amount of capital. Since Department I produces the means of production for all departments, its price multiplier {/; = 1.089 will imply higher money prices (MC;) for all means of production. Similarly, since Department II produces the means of subsistence, its price multiplier ¥/, = 0.951 implies a lowering of the money costs of labor- power (MV;) in each amount. Y3, on the other hand, will not affect either component of cost-prices, since Department III produces only commodities for the consumption of capitalists.

Capitalists in each department will now have incurred new cost-prices differing from those in Step 1B. If they were to continue to sell their products at the prices of Step 1B their rates of profit would no longer be equal. This is the case illustrated in Step 2A. The overall effect of the preceding "feedbacks" is to raise the aggregate cost-price from £1350 to £1387.04. Since the sum of prices is unchanged, this results in a decrease of total money profit from £400 to £362.96.

Once again, therefore, capitalists in each sector would be compelled to adjust their individual money rates of profit to conform with the average rate, through the movements of their respective commodity-prices; once again, the average commodity, and hence the total mass of commodities, would be under no such compulsion, so that the total sum of prices would remain constant at £1750.

The resulting situation is depicted in Step 2B. Department I's price, compared to its previous level in Step 1B (and 2A), has risen again, this time by Yy = 834.12/816.67 .021, while those of II and III have fallen from their previous levels by Y, = 0.986 and Y3 = 0.973. The pattern of transfer of surplus-Value has therefore been altered once again; moreover, in this case the money form of the mass of surplus-Value (i.e., total money profit) has been altered in magnitude. In the same way, the money rate of profit (26.17%) is no longer simply equal in magnitude to the value rate of profit (29.63%).

In each succeeding step, the procedure may be repeated until the changes from one step to another are negligibly small—and we find ourselves with the "correct" prices of production first illustrated in Table 3! This is not, as is usually the case, on the basis of an alternative to Marx’s procedure of transformation, but rather on the basis of its successive application.

The procedure illustrated in Table 4 is quite general. The proof is left to Section VI of the mathematical appendix to this paper.

== V. Some further considerations ==
In the preceding discussion, four important points have emerged in connection with the so-called "transformation problem."

First of all, it is not a case of transforming ‘"Values into prices." Rather, it is a case of transforming one form-of-Value, direct prices, into another form, prices of production.

Secondly, the issue under consideration involves a pure change of form. As such, the transformation from direct prices to prices of production does not involve any ''real'' change for the system as a whole. The total mass of commodities, and the various portions of it going to each class, remain the same as before. By the same token, so do the sum of Values and sum of surplus-Values. What the transformation brings about is a different division of the total pool of surplus-Value among individual capitalists.

Third, the transformation procedure set out by Marx reflects the inherent nature of the process of the equalization of profit rates. This is a continuously occurring process, and in its pure form it acts by changing prices of individual commodities while leaving the sum of prices of a given mass of commodities intact. In addition, Marx’s procedure can be extended in a simple way to derive the "correct" prices of production.

Lastly, in the case of the "correct" prices of production, the money rate of profit will deviate from the Value rate of profit. Like the deviations of prices of production from direct prices, however, the money and Value profit rate deviation is systematic and determinate. Though we do not prove it here, it can be shown that (under any given conditions of production), the money rate of profit will vary with the Value rate.41

These connections by no means exhaust the possibilities. The relation between the mass of surplus-Value and its transformed money-form (total money profits under prices of production) still needs to be better specified.<ref group="CN">Mediante su procedimiento, Shaikh no logra mantener la invarianza "Masa de plusvalía = Masa de ganancia monetaria"; aunque si mantiene "Masa de valores = Masa de precios de producción" puesto que estos agregados no cambian durante su transformación</ref> So too does the relationship between individual prices of production and the corresponding Values.<ref group="CN">?</ref>

Perhaps the most important point to keep in mind is that the laws that Marx derives on the basis of this theory of Value cannot be derived from a theory which ''begins'' with prices of production. For instance, Marx’s distinction between Value and money-price goes hand in hand with a corresponding differentiation between production and circulation. It consequently becomes necessary to distinguish between activities which produce commodities and those which circulate them, and eventually this difference develops in the more complex and powerful distinction between surplus-Value ''producing'' labor (what Marx calls "productive" labor) and all other types (which Marx relegates to the category of "unproductive" labor). Among other things, an increase in the proportion of unproductive labor (say advertising) to productive labor, for given level of total employment, would imply a smaller mass of surplus-Value to be shared out, and hence a smaller rate of profit. Such a conclusion has no parallel in orthodox theories of price.

Marx’s analysis abounds with similar examples. His theory of money, for instance, is the direct opposite of the Quantity Theory.42 Similarly, his theory of the falling tendency of the rate of profit, and the theory of accumulation and crises which stems from it, receive their characteristic form from the distinction between constant and variable capital—precisely a distinction which makes no sense without the notion of Value.

All of this means that if Marx’s economic analysis is to be developed, it must first be understood. Or else it must be abandoned altogether. The latter path is no doubt simpler, and certainly more consistent with orthodox economics. If the task is to understand the world in order to change it, then the adequacy of analysis, not its "acceptability," is all that matters. And on that basis, it seems to me that Marx’s analysis is the most appropriate starting point.

== VI. Conclusions ==
It is the function of all scientific analysis to get beneath the surface of phenomena, to reduce their apparent movement to the real: "...all science would be superfluous if the outward appearance and the essence of things directly coincided."43

The outward appearance of the sphere of circulation is one of freedom, equality, and choice: it is a world whose real inhabitants are inherently-equal-things, commodities, a world into which human beings enter only as representatives of these "natural" democrats: "It is an enchanted, perverted, topsy-turvy world, in which Monsieur le Capital and Madame la Terre do their ghost-walking as social characters and at the same time directly as mere things."44

To Marx, the great merit of classical economy was that it saw through, albeit incompletely, this "false appearance and illusion, this mutual independence and ossification of the various social elements of wealth, this personification of things and the conversion of production relations into entities, this religion of everyday life. It did so by reducing interest to a portion of profit and rent to the surplus above average profit, so that both of them converge in surplus-value; and by representing the process of circulation as a mere metamorphosis of forms, and finally reducing value and surplus-value of commodities to labour in the direct production process."45 In this way the classical economists were able to get beyond the simple conceptions generated by the outward appearance of capitalism, penetrating the disguise of circulation and seeing behind it the process of production. But they themselves were trapped by their inability to properly distinguish capitalist production from other historically determinate forms; by taking as given and eternal the concepts generated by the outward appearance of capitalist production, they remained "more or less in the grip of the world of illusion which their criticism had dissolved."46

The "world of illusion" Marx refers to represents the conceptions common to bourgeois thinkers; it covers not only the actual analysis of classical economists and of their targets, the vulgar economists, but also the conceptual framework within which they clash. Contained in their agreements and disagreements is an implicit philosophy, an implicit theory of history, an implicit anthropology, and so on.47 Thus for Marx the critique of classical economy is at the same time a critique of its philosophy, its history, its anthropology. His analysis in ''Capital'' is necessarily predicated on all of these critiques; the vast distance between Marx and the classical economists, and hence between "value" in Marx and "value" in classical economy, can only be understood if one recognizes that in solving the problems of the classical economists Marx also breaks with the (often implicit) bases on which they had formulated their questions.

Insofar as the problems to be dealt with center largely on the magnitude of Value, as is often the case in this paper, the real difference between Marx and Ricardo, the difference in their methods, tends to be hidden. Marx’s superior ability to solve Ricardo’s problems, is, as he himself insists, due to his ability to transcend "the world of illusion" in whose grip Ricardo remains. This superior ability is therefore only a symptom of the real difference between Marx and the classicals. But to those who either explicitly or implicitly reduce Marx to Ricardo, this symptom becomes the real difference itself. Marx becomes a clever, if somewhat mystical, post-Ricardian.

The very same process of reduction often operates even further in the comparison of Marx to neoclassical analysis. Not only are Marx and Ricardo lumped together, but both are reduced to the one-dimensional world of neo-classical analysis. Here, the very conception of the problem to be analyzed is usually neoclassical; even those who reject the flatness of its theory are very often forced to fight their battles on its terms, and hence ''within'' its general framework.

The so-called transformation problem is a classic example of all this. As it is usually presented, the central issue is one of the ''calculation'' of static prices of production, and the major point of contention is the presence or absence of a relationship between Marx’s transformation procedure and the "correct" one.

I have, as much as possible, attempted to avoid this trap. Certainly the issue of calculation is relevant; but the ''conception'' of that-which-is-to-be-calculated comes first, for in that conception lies the superiority of Marx’s method. The early part of this paper therefore attempts to provide the basis of Marx’s conception of prices in general, and prices of production in particular. In this way we are able to resolve many of the confusions surrounding the so-called "transformation problem," as well as being able to demonstrate that the "correct" prices of production can be calculated from values ''in the manner suggested by Marx’s own transformation procedure''.

== Mathematical Appendix ==
Lack of space makes it impossible to include the mathematical appendix to this reading. However, [https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ a copy of the appendix] is available on request from the author of this reading.

== References ==

# L. Althusser and E. Balibar, ''Reading Capital'', translated from the French by Ben Brewster, Pantheon Books, (New York: Random House), 1970.
# W. Baumol, "The Transformation of Values: What Marx ‘Really’ Meant (An Interpretation), ''Journal of Economic Literature'', March 1974, Vol. XII, No. 1.
# A. Emmanuel, ''Unequal Exchange: A Study of the Imperialism of Trade'' (New York: Monthly Review Press), 1972.
# T. Kuhn, ''The Structure of Scientific Revolutions'' (Chicago: University of Chicago Press), 1970.
# E.Mandel, "Value, Surplus Value, Profit, Prices of Production and Surplus Capital—A Reply to Geoff Hodgson," ''International Socialist Review'', Vol. 2, No. 1, Spring 1973.
# K. Lancaster, ''Mathematical Economics'' (New York: The Macmillan Company), 1968.
# Karl Marx, ''A Contribution to the Critique of Political Economy'', with an Introduction by Maurice Dobb (New York: International Publishers), 1970.
# —, ''Theory of Surplus Value: Volume IV of Capital'' (Moscow: Progress Publishers), Part I, 1969; Part II, 1968; Part III, 1971.
# —, ''Capital'', Volumes I-III (New York: International Publishers), 1967.
# —, "Comments on Adolph Wagner’s ‘Lehrbuch der politischen Okonomie’, 1879/80," published as ''Karl Marx on Value'', British and Irish Communist Organization, Belfast, 1971.
# A. Medio, "Profits and Surplus-Value: Appearance and Reality in Capitalist Production," published in ''A Critique of Economic Theory'', edited by E. K. Hunt and Jesse G. Schwartz (London: Penguin Books), 1972.
# R. Meek, ''Economics and Ideology and Other Essays'' (London: Chapman and Hall), 1967.
# M. Morishima and F. Seton, "Aggregation in Leontief Matrices and the Labour Theory of Value," ''Econometrica'', Vol. 29, 2 (April 1961), pp. 203-220.
# M. Morishima, ''Marx's Economics'' (Cambridge: Cambridge University Press), 1973
# J. Robinson, ''An Essay on Marxian Economics'', Second Edition (London: Macmillan; New York: St. Martin’s Press), 1969.
# B. Rowthorn, "Skilled Labour in the Marxist System," ''Bulletin of the Conference of Socialist Economists'', Spring 1974, pp. 25-45.
# P. A. Samuelson, "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, Vol. IX, No. 2, pp- 399-431.
# F. Seton, "The ‘Transformation Problem’," ''Review of Economic Studies'', June 1957, 25, pp. 149-160.
# A. Shaikh, ''Theories of Value and Theories of Distribution'', Columbia University Ph.D., 1973 (unpublished).
# P. Sraffa, ''Production of Commodities by Means of Commodities'' (Cambridge: Cambridge University Press), 1960.
# P. M. Sweezy, ''The Theory of Capitalist Development'' (New York: Monthly Review Press), 1964.

== Endnotes ==

== Footnotes ==

== Critical Notes ==
<references group="CN" />
[[Category:Works by Anwar Shaikh]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T06:44:22Z

Ismael:

{{Library work|title=Marx's Theory of Value and the "Transformation Problem"|author=Anwar Shaikh|published_date=1977|pdf=https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ}}

== I. Introduction ==
It is curious that in the almost eighty years since the publication of Volume III of Marx's ''Capital'', a major theoretical problem, the infamous "transformation problem," has never been satisfactorily resolved. Throughout Volume I, written by Marx ''after'' he had already completed the first draft of Volume III, the analysis is based on the assumption that exchanges of commodities take place at prices proportional to their labor values. I will call these prices the "direct prices" of commodities. In Volume III, which was compiled by Engels from the incomplete first draft, after Marx's death, Marx extends his analysis to take into account "prices of production," demonstrating how one can derive these prices from the "direct prices" of Volume I. This derivation, from then on the center of an intense controversy, was the original "transformation procedure."

Opponents of the labor theory of value immediately seized on the apparent incompleteness of Marx's procedure. Bohm-Bawerk, for instance, questioned the tenability of Marx's statement that the sum of prices after the transformation would remain equal to the sum of values; others have pointed out that Marx's procedure contains an "error," because while he transforms the prices of outputs from "direct prices" to "prices of production," he leaves the inputs untransformed. Since commodities appearing as outputs of a productive system are often also inputs into the system, it is argued that Marx's procedure is logically flawed; "direct prices" and "prices of production" are two separate and unrelated phenomena, leading to a "great contradiction" between Volume I and Volume III of ''Capital'', More recently, essentially the same point has been made by Samuelson [17], in which he attacks the very idea of a transformation procedure: "Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila! You have completed your transformation algorithm."1 As we shall see. this criticism is completely incorrect, it is also somewhat misplaced; if anything, it applies most properly to the neoclassical "transformation procedure" which was the center of the so-called Cambridge Capital Controversies, a procedure in which Samuelson himself was quite prominent.*

On the Marxian side, there have been, of course, many "solutions" to the transformation problem, from Bortkiewicz’s original transformation procedure and its subsequent variants to Francis Seton’s important paper [18]. Unfortunately, as even supporters and sympathetic critics of the labor theory of value admit, these "solutions" all suffer from the same basic defects; they show "the possibility of a consistent derivation of prices from values"2 while apparently severing the crucial links between price and value magnitudes which Marx seemed to emphasize in his own procedure. In most discussions of the issue, these links have appeared in the form of the following equalities: of the "sum of prices" and the "sum of values"; of the magnitude of profits and the magnitude of surplus-value; of the profit-wage ratio and the rate of surplus- value; and of the general rate of profit in price terms and the same rate in value terms. As is well-known by now, in any "correct solution" either the first or the second, but not both, can be always made to hold, while in general the other two cannot. What then are we to make of Marx’s procedure?

It has been suggested that Marx, having published Volume I in full confidence that the labor theory of value was the correct basis, discovered too late, in writing Volume III, that it was not. But that doesn’t work, because we know that Volume I was published well after Volume III had been drafted. Others, perhaps more charitably, have suggested that because the labor theory of value as a theory of relative prices was so much a part of the tradition of classical economics, it was taken over by Marx almost unexamined. A variant of this line of reasoning, which is popular among some Marxists, is that if nowadays we view Marx-as-an- economist as a member of the classical school, it is we who import into Marx’s theory of value, which is only nominally similar to that of Smith and Ricardo, the pre-Marxian question of the quantitative relationship between prices and values. In the variant, therefore, the lack of examination is on our part, not that of Marx. Marx was simply not terribly concerned with the quantitative relationship.3

To anyone who has read Marx’s voluminous comments and critiques of the classical economists, notably in ''Theory of Surplus-Value'' and in ''Capital'', it becomes impossible to ascribe to Marx an unthinking take-over of a labor theory of value from anyone at all. Marx spends literally hundreds of pages discussing values and their relationship, both qualitative and quantitative, to wages, profits and prices; no aspect, no issue, is ignored in these incredibly detailed discussions. So the main line of that argument does not hold up. As for the variant, insofar as it argues that there is a vast difference between the "value" of Smith and Ricardo and the "value" of Marx, it is undeniably correct; where it goes wrong is in jumping from this important fact to the conclusion that Marx either does, or even could ignore the quantitative aspects which dominated the pre-Marxian "value theory."

Consider for a moment the fact that there is a vast difference between Einstein and Newton too, one which stems from different methodologies, different objects of analysis, etc., and extends all the way to differences in concepts and calculations. There is, in other words, what Thomas Kuhn calls a "paradigm break" between the two modes of analysis.4

The notion that Einstein and Newton, for instance, treat what appears to be some autonomously defined subject—"Physics"—is an illusion which is fostered by textbook propagandists whose very aim is to treat science as the glorious and lofty march towards "truth." In reality, however, almost every conception and calculation in Relativity Theory contradicts those of classical physics.

To reduce Einstein to a "tidied up" Newton would therefore be impossible. What is worse, this impossibility would show up in the form of "logical contradictions," "redundancies," and "irrationalities" in Einstein, not in Newton, for the propositions derived from the Theory of Relativity cannot be derived within a Newtonian basis. What can we say, for example, in a Newtonian framework about the fundamental Einsteinian notion that there exists a finite limit, the speed of light, for the velocity of any object? Only that it is clearly wrong, or at best, a notion we (as Newtonians) have no use for in our framework—one which therefore appears "mythical," "metaphysical," "irrelevant."

Insofar as some Marxists have pursued a similar line of argument as to the "reduction’" of Marx to Ricardo, they have been making an absolutely crucial point: namely, that by attempting to "reduce" Marx to Ricardo, or to neoclassical economics, the impossibility of this reduction will manifest itself as a series of "contradictions" and "irrationalities" in Marx! What we think we find, on a Ricardian or neoclassical basis, is that Marx is simply incorrect, or at best gets involved in an "unnecessary muddle."5 What we have in fact demonstrated is that you cannot derive Marx from Ricardo or Samuelson.

Obviously, none of this implies that Marx is above criticism. The point here is that in order to be able to evaluate Marx’s solution to some problem, we must first of all define the problem. We must, in other words, ''locate'' the problem in terms of some general analysis, so that we may see which solutions are adequate and which are not. It has often been said that the hardest part of solving a problem is figuring out the question!

Some Marxists, however, jump from the implications of the difference between Marx and Ricardo to the false conclusion that Marx was, or at least that Marxists could be, unconcerned with the quantitative relationships between prices and values (whether he was and whether Marxist analysis could be are in fact two separate issues, but one leads to the other).

To begin with, the statement that Marx did not in fact consider these matters to be important runs headlong into the contrary evidence of the vast amount of attention Marx’s writings give to them; the only way to get around this evidence in turn, is to try and show that the issue itself is irrelevant. In this way the real basis of this line of reasoning turns out to be the argument that Marxist analysis can, and should ignore the quantitative relationship. On the one hand, this argument gets much of its impetus from the persistent, and to some extent, damaging attacks on the "transformation from values to prices"; and on the other, it derives much of its appeal from a reaction against the obvious banality of neoclassical economics, in which relative prices figure so prominently. Nonetheless, the argument is simply untenable, for it is based on an ''unspoken'' conception about scientific analysis which when made explicit is quite unsupportable: namely, that as a science, the Marxist analysis of capitalism can simply choose to ignore the quantitative aspects of any phenomena, once it has understood the qualitative aspects. Marx himself had a higher opinion of his work:<blockquote>Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. (''Capital'',* Volume III, Part I, Ch. I, p. 25) </blockquote>Unfortunately not many Marxists today seem willing to accompany Marx all the way in his arduous journey; and of those that do, even fewer appear to be interested in pulling together and extending, where necessary, the sometimes incomplete analysis of Volume III. The labyrinths of the turnover of capital in Volume II, the "petty detail" of the endless tables of differential rent in Volume III, and certainly the unending controversy about the "transformation problem" must all seem so very tedious, perhaps even dangerously confusing, to those who remain content to bask in the brilliance of Volume I.6 But Marx at least did not find in the difficulty of a subject a sufficient reason for avoiding it:

That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits. (''Capital'', Volume I, "Preface to the French Edition," p. 21)

== II. Value and Price ==

=== 1. Calculation versus Conception ===
I have, up to now, confined myself to a discussion of the so-called "transformation problem" and of various attitudes toward it. It is, however, a major purpose of this paper to demonstrate that one can, ''precisely in the manner set out by Marx'', calculate the "correct prices of production" from values. The link between the two, one so obvious that until recently it seems to have been completely overlooked, ** is simply that while Marx’s procedure is a perfectly general one, it is only the first step in an iterative transformation from "direct-prices" to "prices of production." But while this extension of Marx’s procedure does falsify the so-called "impossibility theorems" on it (most recently voiced by Paul Samuelson), it by no means establishes the need for such a transformation in the first place. As has often been pointed out, "prices of production" can instead be calculated directly from the same "‘economic data" as "direct-prices." The difference between the two methods of calculation therefore lies not in the end point but in the beginning; that is, it lies not in the magnitude of "prices of production" but in their meaning, in their conception. To reduce the issue of the transformation to one of merely calculation, is simply to reduce Marx to neoclassical economics. And, as I pointed out earlier, the impossibility of such a reduction can only "show up" as a "redundancy" in ''Marx'': after all, if both methods arrive at the same end point, why bother with Marx’s needless "detour" through values?

The question may be put more precisely: in what way is Marx’s analysis of value different from that of orthodox economics? What sorts of issues, conceptions, and calculations are specific to it alone? What laws does Marx derive from it which cannot be derived from conventional economic analysis? Unless we make an attempt to answer these questions, any discussion of the "transformation" issue is quite irrelevant: without a proper understanding of the concept of value as it appears in Marx, it is pointless to try and analyze the so-called "transformation from values to prices of production." The discussion of the actual transformation algorithm is therefore postponed until Section III. In this section we must establish its ''raison d’etre''.

=== 2. Basic Method ===
<blockquote>Whatever the social form of production, labourers and means of production always remain elements of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another. (''Capital'', Vol. II, Ch. I, Section I, p. 34.)

The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers... which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. (''Capital'', Vol. III, Ch. XLVII, Section II, p. 791.) </blockquote>The preceding quotes present a crucial element of the Marxist approach to history: namely, that the specific manner in which production is organized, and surplus-labor extracted from the direct producers, forms the "hidden basis of the entire social structure." For Marx, it follows from this that the concepts adequate to the analysis of any specific historical epoch, including that of capitalism, must necessarily be based on these aspects of its social practice. The struggle for production is the fundamental social practice in all human society; hence the analysis of production is the beginning point of Marxist analysis. The extraction of surplus-labor is the basis of all class societies; hence its study is the source of the concepts adequate to an analysis of all class societies. ''Capital'' is Marx’s application of this approach to the analysis of capitalism.

=== 3. The Production of Commodities ===
One very important aspect of the social process in which laborers and means of production are united in the ''capitalist'' mode of production, as opposed to all others, is that under the capitalist mode the overriding aim of production is not production-for-direct-social-use but production-for-exchange. In the caste system of India, for example, the social regulation of productive activity is made starkly visible by the existence of hereditary castes whose members can, and in fact must, perform only those concrete types of labor which are required of their caste. Production is, in this society, production-for-direct-social-use (whatever we may think of that use); distribution of the products of labor is similarly directly regulated.

But in capitalism, we have commodity production. What turns a product (something which is produced) into a commodity (something which is bought and sold) is a specific set of social structures which organize the productive activities (the labor) of society around production-for-exchange. In commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction. Society is organized in such a way that there is no ''direct'' social regulation of productivity activity: during production people act as individuals, relating only to their products; it is in exchange, therefore, that the true social nature of their existence is forcibly demonstrated to them through the relation of their commodities to those of others. Exchange, so to speak, is a "symptom" of commodity production, and its real limits can only be understood by relating exchange to its "hidden basis"—i.e., to production. It follows, therefore, that in a Marxist analysis the derivation of the categories of exchange, such as money and price, as well as their movements, must necessarily be based on the categories of production. Taken by itself, as an eternal category divorced from any particular type of production, exchange appears to be a smooth, static, inherently equilibrating process: witness the parables of neoclassical economics. Circulation is, to all appearances and purposes, the sphere of freedom, equality and equilibrium. But for Marx, circulation is precisely the sphere in which the contradictions inherent in the production of commodities are "both exposed and resolved";7 the manner in which these contradictions in production dominate exchange, both qualitatively and quantitatively, is what Marx means by the law of value: "in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time necessary for their production forcibly asserts itself like an overriding law of Nature."8

=== 4. Exchange-Value and Value ===
In all production, concrete (i.e., specific) types of labor and concrete inputs result in a concrete product. Moreover, since the produced inputs themselves must be the products of past labor, we may say that in all production, including commodity production, concrete products are the results of concrete labors, in a given natural context.9 But commodity production (the production of goods-for-exchange) necessarily implies exchange; and in exchange the distinct qualities which give various commodities their "concreteness" are abstracted from. In exchange, what matters is not the physical properties of iron but how much wheat, or cloth, or coffee, etc., we can get for the iron; hence in exchange we treat every commodity not as a concrete bundle of distinctive qualities, but as the equivalent of specific ''quantities'' of all other commodities.

Precisely because exchange is a social process which quantitatively compares and equates different products, it is only in those societies which produce for exchange that the product of human labor acquires the property of "quantitative worth." In addition to being useful, they are now also "valuable": they are commodities.

We have to get a little more exact in our terminology at this point. In conventional usage (and with some classical economists), the term "value" sometimes refers to the notion of a useful object, and at other times to the notion of the "quantitative worth" of an object. In order to avoid confusion, therefore, Marx uses the term ''use-value'' to mean useful object, and the term ''exchange-value'' to mean the quantitative "worth" of an object. In Marx's terminology, therefore, a commodity is both a use-value and an exchange-value.

It is usually not difficult to explain what is meant by a useful object.* But when we say that a commodity is "worth" something just what is implied? Suppose I say that in barter a bushel of corn is "worth" a ton of iron, and also a yard of silk, and an ounce of gold, and so on. At first glance, what I appear to be saying is that there are many different quantitative expressions for the "worth" of a bushel of corn, depending on which other commodity (iron, silk or gold) I choose to ''measure'' it by.

But there is a deeper problem here. In order for me to measure the "worth" of corn in terms of gold, for instance, gold must also be "worth" something itself. Otherwise I cannot say how much gold is equivalent to a bushel of corn. It is just like my saying that a stone "weighs" ten grams; what I mean is that on a scale it takes ten pieces of iron called gram-weights to equal the weight of the stone. But clearly, in order for me to carry out this operation, both stone and iron must already possess the property of being "heavy," of having "weight"; the gram-weights don’t make stones ‘"heavy," they only measure the already existing heaviness of stones.

Exactly the same conclusion applies to "quantitative worth." The factors which cause commodities to have "quantitative worth" in the first place must be carefully distinguished from the measurement of this "worth." Measuring the "worth" of corn in iron will give a different result from measuring it in gold; but neither measure causes corn to have "quantitative worth." Rather, each merely expresses the preexisting "worth" of corn in terms of some particular commodity.

The question of exchange-value ("quantitative worth") is therefore really a twofold one: first, what is the cause of "quantitative worth"; and second, how is this "worth" actually expressed, measured, in exchange?

If we look at society as a regularly reproduced set of social relations, it becomes very clear that the production and reproduction of the masses of useful objects which correspond to various social needs requires a definite, quantitative distribution of social labor. Each different useful product requires a concretely different type of labor; reproduction of the material basis of the society consequently requires the existence and reproduction of appropriate amounts of different concrete labors. That is to say, social labor from the point of view of its capacity to produce different use-values is what Marx calls social labor in its role as ''concrete'' labor.10

A commodity, however, is more than a mere use-value; it is at the same time an exchange-value, an object possessing "quantitative worth." It follows from this that the very same social relations which endow use-values with the property of "quantitative worth," endow the labor which produces these use-values with the capacity to create "quantitative worth." From this point of view, all commodity producing labor is qualitatively alike and quantitatively comparable: it is what Marx calls "(commodity producing) social labor in its capacity as ''abstract'' labor." 11

Therefore, to the question on the cause of exchange-value, Marx’s answer is: abstract labor, i.e., <s>labor actually engaged in commodity production</s>, is the cause of exchange-value.12 Moreover, if we consider the production of a commodity from the point of view of the whole society, it becomes apparent that the commodity’s exchange-value represents the total amount of abstract labor-time socially necessary13 for its production, both directly (in the process of producing the commodity from its material inputs) and indirectly (in the process of producing the material inputs themselves, and the inputs of the inputs, and so on). Marx consequently refers to this total sum of abstract labor-time as the ''immanent measure'' of a commodity’s exchange-value, what he calls its "Value."14

The discerning reader will have noticed that I have capitalized the term Value. This is done in order to emphasize the distinctiveness of Marx’s use of the term, and especially to avoid confusing it with the term "value" in orthodox economics (where it generally refers to a price of some sort).

It should also be noted here that the Value of a commodity is the ''average'' amount of abstract labor-time required for its production. The total output of a particular commodity represents* the expenditure of a certain amount of abstract labor-time which under existing conditions is required for its production. In exchange, however, all commodities of a given type are treated alike; each commodity is merely "an average sample of its class,"15 and as such represents the average expenditure of abstract labor-time.16

In order to avoid confusion later on, I will distinguish between the ''sum of Values'' (the abstract labor-time required to produce the total social product**), the ''total Value'' of a given branch of production (the Value of its total output),’" and the ''unit Value'' of a single commodity (the average Value in the sense defined above). All terms are defined over a given period of time.

=== 5. Money and Price ===
We turn now to the second aspect of exchange-value: how is "quantitative worth" actually expressed in exchange? To this Marx answers: in exchange, the "quantitative worth" of a commodity ''must'' take the form of money-price. Since exchange is the interchange of two commodities, at first glance it seems obvious that there are as many measures of a commodity’s worth as there are other commodities to measure it by. And historically, where exchange is sporadic or irregular, this is in fact true. But as exchange spreads and develops, this variety of different possible measures increasingly becomes a barrier to the smooth functioning of the process; without a point of reference, the direct comparison of every commodity with every other becomes impossibly complex. Consequently it becomes increasingly necessary to socially recognize a given commodity out of those available as the one commodity in which all others are to express their "worth"; this special commodity therefore becomes the universal equivalent, the money-commodity. We will henceforth assume it is gold.*

Notice that money does not by itself cause commodities to have "worth," any more than gram-weights cause stones to have weight. On the contrary, it is only because both gold and the other commodities have "quantitative worth" (exchange-value) in the first place that we can express their worth of commodities in terms of gold. The money-price of a commodity is the "golden" reflection, the external measure, of its exchange-value. It is what Marx calls the ''form'' taken by Value during exchange.18

=== 6. Production and Circulation ===
The foregoing analysis has focused on the difference between Value and money-price. Implicit in this distinction, however, is another equally important one: the Marxian distinction between the production of commodities and their circulation.

Production, Marx notes, is the creation or transformation of a use-value.19 Insofar as the product is a commodity, it belongs to some individual; it enters circulation, therefore, as private property.

Consider the case of two commodity producers, a fisherman and a hunter. They bring definite quantities of fish and game, respectively, to the market for the purpose of exchange; commodities with definite Values representing definite quantities of abstract labor-time thus enter the market-place.

Now what happens in exchange? In the exchange process the two commodity producers negotiate terms under which they will ''transfer the titles'' to their respective commodity property.20 But note: the time they spend bargaining over these terms of trade will in no way increase the total amount of fish or game to be had; it will determine only the final pattern of distribution.21 In fact, insofar as they need to subsist during the actual process of exchange itself, their<blockquote>costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third [person to perform] these exchanges, and thus lost no labour time directly, then each of them would have to cede a proportional share of his product to [that third person]...

Circulation costs as such, i.e. consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange..., are therefore a deduction either from the time employed on production, or from the values posited by production. ''They can never increase the value''. They belong among... the inherent costs of production resting on capital. (Marx, ''Grundrisse'', Notebook VI, pp. 632-633. Emphasis added) </blockquote>This is a very important point in Marx’s analysis. The circulation process is the process whereby commodities change hands, where their titles of ownership are transferred. As such, no commodities and hence ''no Value is created in the circulation process''.22 If anything, part of the previously produced mass of commodities (and hence the Value previously created in production) may be used up just in the struggle over its distribution.

One immediate implication of this is that the categories of circulation are thereby limited by those of production.* Value is created in production, materialized in commodities; ''regardless of the actual money prices at which these commodities are sold'', only the same mass of commodities (and hence the same amount of Value) exists after the sales as before. Different price relations will therefore give rise to different distributions of the total commodity-product, and of the total sum of Values, but they cannot by themselves change these totals. It is on this basis that Marx argues: <blockquote>If commodities are sold at their values, then the magnitude of value in the hands of the buyer and seller remains unchanged. Only the form of existence of value is changed. If the commodities are not sold at their values, then the sum of converted values remains unchanged; the plus on one side is a minus on the other. (Marx, ''Capital'', Volume II, Ch. VI, Section 1.1, p. 129) </blockquote>

=== 7. The Importance of Prices ===
In commodity producing societies the object of production is not direct use, but personal gain through exchange. Individuals produce without any apparent social regulation. Nonetheless, they too exist within a social structure. For each individual to be able to specialize in producing for exchange, others must do so too; for exchange to proceed without rupture, the various products must correspond to the various social needs. Since under this form of social organization the correspondence between the various social needs and the distribution of social labor required to satisfy these needs cannot be brought about directly, it must be done indirectly. What in other societies is a direct evaluation of the importance of a particular type of labor in terms of its concrete product, becomes in commodity producing societies the indirect evaluation of this labor—through the "quantitative worth" of its product. It is only in exchange that the true social nature of commodity production is made apparent; and precisely because commodity production is undertaken for personal gain, for the money which is to be made, ''it is the money-prices of commodities that serve as the immediate regulating mechanism of the system''. Far from being a "veil," money constitutes a very important feedback mechanism.

It follows from the above that the laws which determine money magnitudes such as prices, profits, and wages, are of the utmost importance in understanding the laws of motion in capitalism.*

Now of course it was known well before Marx’s time that supply and demand were the immediate determinants of actual market phenomena. But even classical political economy was aware that over the course of time the ceaselessly fluctuating interplay of supply and demand was itself regulated by a much more fundamental principle: the Law of Equal Profitability.

For instance, if as a result of market conditions a particular sector’s rate of profit rose above the average rate, then the flow of capital would tend to be biased towards that sector, causing it to grow more rapidly than demand, and driving down its market price to a level consistent with average profitability. Conversely, the sectors with low profitability would tend to grow less rapidly than demand, causing their prices and profitability to rise.

The classical economists were thus able to demonstrate that behind the continuously varying constellation of market prices there lay another set of prices, acting as "centers of gravity" of market prices and embodying more or less equal rates of profit. The name given to these regulating prices in classical political economy was natural prices; Marx calls them prices of production. Their discovery was the first great law of prices.

By David Ricardo's time, the problem had moved on to a higher level. What Ricardo sought to do, for instance, was to go one step further and look behind prices of production themselves, to discover ''their'' "centers of gravity." That is, just as the market price of a commodity was shown to be regulated by its price of production, Ricardo sought to show that this regulating price was itself subject to a hidden regulator—the total quantity of labor time required to produce the commodity, both in its direct production and in the production of its means of production. <blockquote>In speaking... of the exchangeable value of commodities, or the power of purchasing possessed by any one commodity, I mean always that power which... is natural price. (D. Ricardo, 1962, p.92)

The great cause of the variation in the relative value of commodities is the increase or diminution in the quantity of labour required to produce them. (''Ibid''., p. 36) </blockquote>There we have it: the ''great'' cause of the variations in the (relative) price of production of a commodity is the variations in the total labor time that goes, directly or indirectly, into its production. The total quantity of labor time was the center of gravity of the commodity’s price of production, just as this price of production was itself the center of gravity of its market price. This was Ricardo’s attempt to formulate a second great law of prices.

What Ricardo perceived was that there was an intrinsic connection between the "quantitative worth," the exchange-value, of commodities, and the total labor-time required for their production.24 This, according to Marx, was Ricardo’s great scientific merit.25 But at the same time Ricardo was trapped by the conceptual framework of bourgeois political economy, which saw all production as being alike. He was consequently unable to distinguish concrete labor, an aspect of all social production, from abstract labor, an aspect which only commodity producing labor takes on. Ricardo therefore misses the difference between Value and the form of Value. Instead of recognizing price as the manner in which the exchange process reflects Value, and developing the various intermediary links between the two, he attempts instead to fuse them together through his law of prices. His failure to adequately distinguish between Value and price is, according to Marx, the first great source of error in his analysis.26

In addition to that, however, there is another problem. How can Ricardo attempt to analyze the effects of a uniform rate of profit on prices, asks Marx, when he nowhere discusses what determines the ''level'' of this rate of profit? And this in turn leads to an even more basic question. A uniform rate of profit is simply a way of saying that profits on different capitals are proportional to the size of these capitals: that is, each capital gets a share of total profit in proportion to its own size. But Ricardo nowhere discusses what determines aggregate profit in the first place. How then can he attempt to isolate the factors which regulate the movements of prices of production when he is missing a crucial ingredient—profit?

It is therefore apparent to Marx that even given the relation between Value and money price which he himself derives,27 the specific manner in which Value regulates price cannot be developed without first showing how profit arises. And this, as we shall see next, leads Marx to the concept of surplus-Value.

== III. Surplus-Value and Profit ==

=== 1. The Circulation of Money and the Circulation of Capital ===
We have up to now focused on the relationship of the circulation of commodities to their production; on the basis of this we were able to derive the categories of Value, money, and price, and discuss their mutual interrelationship. But the very existence of the circulation of commodities within a capitalist mode of production immediately implies that, for those who function as capitalists, the process of circulation is itself a means to realizing a profit: where then does the profit of the capitalist class as a ''whole'' come from?

Marx begins by noting that once we consider commodity production within the context of capitalist production, the overall process of circulation is in reality two different processes with different functions and hence different laws. In the first process, the owners of commodities (<math display="inline">CC</math>) exchange them for money (<math display="inline">M</math>) in order to be able to use this money to buy other commodities (<math display="inline">CC</math>) for the purpose of consumption.* This circuit in the overall circulation process therefore has the form <math display="inline">CC \rightarrow M \rightarrow CC</math>, and is the aggregate of the exchanges of one set of commodities for what is, under the existing conditions of exchange, an equivalent set. In this process money is an intermediary between two sets of commodities; once acquired it is spent, and for the individuals involved in it, the process terminates in consumption. Marx calls this "selling in order to buy";28 in it, money functions as money only.

In the second circuit, however, the owners of money (<math display="inline">M</math>) exchange it for commodities (<math display="inline">CC</math>) in order to get more money (<math display="inline">M' = M + \Delta M</math>), i.e., in order to make a profit <math display="inline">\Delta M</math>. Money here is not spent, it is merely ''advanced'' in order to make more money, through the intervention of commodities. The process of <math display="inline">M \rightarrow CC \rightarrow M'</math>, tends to be self-perpetuating, since it can always lead into <math display="inline">M' \rightarrow CC \rightarrow M''</math>, etc. The initiators of this process function as capitalists: <math>M \rightarrow CC \rightarrow M'</math> "is therefore in reality the general formula of capital as it appears ''prima facie'' within the sphere of circulation."29 Marx calls this second process "buying in order to sell";30 in it, money functions as ''capital''. It makes a profit. But how is it possible to make money by merely advancing money?

=== 2. Surplus-Value ===
The first step in the solution to the problem of profit is to recognize that it is not simply a question of money. Money, after all, represents a command over actual commodities, and hence over the actual labor-time materialized in them. If therefore in the circuit <math display="inline">M \rightarrow CC \rightarrow M + \Delta M </math>, the profit of the capitalist class (<math display="inline">\Delta M </math>) is to be something more than a monetary illusion, if it is to represent a potential increment in their real wealth, then ''their money profit <math display="inline">\Delta M </math> must itself be matched by an actual increment in the commodities available, and hence in materialized labor-time''. That is, <math display="inline">\Delta M </math> must be matched by an increment in the total Value of the commodities represented by <math display="inline">CC </math>. This increment in Value necessary for any real profit, Marx calls surplus-Value.

=== 3. Constant Capital ===
Ostensibly, the process of the formation of capital, as represented by <math display="inline">M \rightarrow CC \rightarrow M'</math>, is a process occurring wholly within circulation. But Value is itself a result of production; it cannot be created in circulation, and hence neither can the necessary increment in Value, surplus-Value. Surplus-Value, if it is possible at all, can only arise from production. And indeed, if we examine <math display="inline">M \rightarrow CC \rightarrow M'</math> more carefully, we find that the first stage involves the purchase of human and nonhuman inputs required for production, whereas the final stage involves the sale of the outputs of production. The commodities purchased as inputs and the commodities sold as outputs are in fact not the same, and it is the intervention of ''production'' which distinguishes them. The formation of capital, which appears to exist solely within circulation, in reality encompasses a process of production; properly speaking, it should be represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, with the stage <math display="inline">CC ... P ... CC' </math> representing the effect of production. Not just production or even just commodity production but, as we shall see, capitalist commodity production.

Means of production and laborers combine in all production. But in commodity production, the means of production are themselves commodities, and as such represent, in their total Value, the quantity of abstract labor-time that was socially necessary for their own production. If we examine the process of production over a period of time sufficiently long so that even the most durable means of production are entirely used up, then it becomes clear that the Value of the means of production must become incorporated into the commodities produced over this period. The bodily forms of the means of production either wear out (as with machines) or are physically incorporated into the product (as with raw materials); but precisely because these means of production are socially necessary under existing conditions, the abstract labor-time represented by them is also (indirectly) socially necessary for the production of the commodities. It is a necessary component of the total Value of the product. From the point of view of Value, therefore, the means of production only contribute as much Value as they actually contain. As such they cannot be the source of the increment in Value upon which any nonillusory aggregate profit must be based; Marx therefore calls the capital advanced in the form of the means of production "constant capital."

=== 4. The Value of Labor-Power ===
The formation of capital, the process represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, presupposes not just commodity production but capitalist commodity production. And under capitalist commodity production, not only are the products of labor bought and sold as commodities, but so too is the very capacity-to-labor itself.

This capacity-to-labor, which Marx calls labor-power, is "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description."31 In all societies, it is the basis of the productive activities of human beings; but for this fundamental human property to become a thing to be bought and sold, a commodity, it must exist within a specific social context. Not only must the laborer have the legal title to his labor-power, he must also be obliged to sell it and not other commodities. He must be free not only to dispose of his own labor-power as a commodity, but also "free" of the means of production which might enable him to be a producer of other commodities. He must be a wage-laborer.

The Value of the commodity labor-power, like that of every other commodity, is determined by the abstract labor-time socially necessary for its production under existing conditions. Since labor-power is a capacity of living beings, its production implies their continued maintenance and reproduction; hence it implies a given quantity of commodities as means of subsistence, sufficient not only to maintain laborers in their normal state as laborers but also sufficient to support their families so that they may as a class continue to perpetuate themselves.* The Value of the means of subsistence of the total workforce is therefore the abstract labor-time socially necessary for their maintenance and reproduction, and hence is the measure of the Value of their labor-power (<math display="inline">V</math>).

When a capitalist purchases the commodity labor-power, he purchases the capacity-to-labor of workers, and in order to utilize this commodity he must extract as much labor-time from these workers as he can. The concrete functions that workers perform in their productive activities involves the transformation of the means of production into specific commodities; as such, the time spent by workers in these activities is itself a quantity of socially necessary abstract labor-time (<math display="inline">L</math>), which is in effect incorporated into the commodities. From the social perspective of Value, therefore, workers add a quantity of Value (<math display="inline">L</math>) to the Value (<math display="inline">C</math>) contained in the means of production they use up.

=== 5. Surplus Labor-Time ===
Capitalist production begins with the commodities <math display="inline">CC</math>, means of production and labor-power; as commodities they represent a definite quantity of Value, <math display="inline">C+V</math>. In a period of time sufficiently long, the entire Value <math display="inline">C</math> of the means of production will be ''transferred'' to the product. On the other hand, the Value <math display="inline">V</math> of labor-power employed in this period is ''replaced'' with the Value added to <math display="inline">L</math> by workers in the form of the amount of labor-time they actually spend in production. Thus while the Value of the initial commodities is <math display="inline">C + V</math>, the Value of the final product is <math display="inline">C + L</math>. The formation of capital, which we have represented as <math display="inline">M \rightarrow CC ... P ... CC \rightarrow M + \Delta M </math>, can therefore also be represented by <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M + \Delta M</math>. Clearly, ''surplus-Value, the Value increment <math display="inline">S =(C+L)=(C+V)=L-V</math> which is necessary to match the money increment <math display="inline">\Delta M</math> can arise if and only if the labor-time (<math display="inline">L</math>) put in by workers is greater than the labor-time (<math display="inline">V</math>) socially necessary for their reproduction''.

The same result can be derived differently. Imagine for a moment that at any given level of technology, workers in all branches of production work just long enough to produce the commodities necessary for the needs of the working class as a whole and to replace the means of production they use up in this process. Under these circumstances, no matter how "advanced" the technology, there can exist no social surplus, and hence no basis for capitalist profit. If, and only if, workers can and actually do work longer than the time necessary to maintain themselves and the means of production, will there arise a continuing social surplus; the time spent by workers in producing this surplus, their surplus labor-time, is therefore the real basis of capitalist profit. And of course since the necessary labor-time described above is none other than the aggregate value of labor-power <math display="inline">V</math>, the surplus labor-time is none other than aggregate surplus-Value <math display="inline">S</math>.32 Once again we see that surplus-Value is the "hidden basis" of any real capitalist profit.

None of this, by the way, implies that Marx intended the labor theory of value as a theory of property rights, ''à la'' Locke or even Proudhon. Marx’s goal was a scientific analysis of capitalism, not a mere moral critique.33

== IV. The Transformation from Direct Prices to Prices of Production ==

=== 1. Exchange at Values: Direct Prices ===
In the Marxist conception of exchange-as-the-circulation-of-commodities, the total labor-time materialized in commodities during their production is the basis for their exchange-value and money-price, while the surplus labor-time materialized in them is the basis of the capitalist profit to be realized from their sale. Without a proper understanding of the quantitative and qualitative relationships between the sphere of production and the sphere of circulation, of the ''limits'' imposed on circulation by production, the laws of circulation must remain a mystery. Neoclassical economics is a testament to this.

For Marx, it was absolutely critical that the dominance of production over circulation be properly understood. It is in production that capitalist wealth is created and expanded, and Value and surplus-Value are materialized in commodities. Circulation, as we have seen, is the process whereby the previously created use-values are transferred from one hand to another, by means of money-prices.

Two things follow from this. First of all, it is in circulation that the Value magnitudes take their money-forms: Value takes the form of money-price, surplus-Value the form of money-profit; and secondly, neither Value nor surplus-Value are created in circulation, precisely because in this process commodities are merely exchanged, not created. This means that regardless of the actual money-prices involved, there can be no ''real'' increase in capitalist wealth through circulation.

It is obvious that the most direct way to explore the production and expansion of capitalist wealth is to assume that exchange takes place in proportion to the Values of commodities, so that the money-price of every commodity is equal to its Value relative to the Value of the unit of money (say one ounce of gold). I will henceforth call prices so determined "''direct prices''."

When indeed the analysis is begun this way, as Marx does in Volumes I and II of ''Capital'', it becomes clear that none of the basic categories of capitalist circulation, the categories of capital and labor, money and price, and wages and profits, owe their existence to any ''deviations'' of relative prices from relative Values. <blockquote>The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents... the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not be interfered with by disturbing circumstances that have nothing to do with the process in question. (''Capital'', Vol. I, Ch. V, p. 166, text and footnote 1.)</blockquote>

=== 2. The Conceptual Basis for Prices of Production ===
There is yet another reason for beginning with direct prices (exchange at values): the major ''systematic'' deviation of relative prices from relative Values arises when commodities exchange at “prices of production.” But prices of production are prices which reflect a general rate of profit; and a general rate of profit in turn presupposes the existence of profits. Prior to any question about the formation of a general rate, therefore, is the question about the source of profit.34 This question leads Marx to surplus labor-time and hence to surplus-Value, and once again the analysis comes to Value.

The path from Value back to price of production involves two major steps. First, one must examine and understand prices and profits in general; this was done through the analysis of the relationship of production to circulation, and of the relationship of Value to money. Second, since prices of production must reflect a general rate of profit, one is led to an analysis of the formation of this general rate out of the individual rates of profit in each sector of production. We turn to this now.

Let us recall that the general process for the formation of capital could be written as <math display="inline">M \rightarrow C+ V ... P ... C+L \rightarrow M'</math>, where M is the money price of commodity inputs into production: the means of production having the Value <math display="inline">C</math> and labor-power having the Value <math display="inline">V</math>. <math display="inline">M'</math>, on the other hand, is the money price of the commodity outputs of production; their total Value is <math display="inline">C + L</math>. By definition, <math display="inline">S=L-V</math>.

In money terms, the general money rate of profit is <math display="inline">r = (M' - M)/M</math>, the aggregate profit <math display="inline">M'- M</math> divided by the capital advanced <math display="inline">M </math>. In terms of Value, the general ''Value'' rate of profit is <math display="inline">\rho = S/(C+V)</math>, the aggregate surplus-Value <math display="inline">S </math> divided by <math display="inline">C+V</math>, the Value of the inputs. Obviously, if prices are proportional to Values, then the general money rate of profit must equal the general Value rate of profit: <math display="inline">r = \rho </math>.

We now consider two individual circuits of capital involving sectors of production I and J, as represented by <math>M_i \rightarrow (C_i+ V_i) ... P ... C_i + L_i \rightarrow M'_i </math>; and <math display="inline">M_j \rightarrow (C_j+ V_j) ... P ... C_j + L_j \rightarrow M'_j </math>, respectively. If prices are proportional to Values, then in each sector the sectoral Value and money rates of profit are the same. We need therefore deal only with the Value rates <math>\rho_i = S_i/(C_i+V_i)</math> and <math display="inline">\rho_j = S_j/(C_j+V_j)</math>.

The first question we must then ask is: are these two Value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> generally equal? For ''if'' they were, then at prices proportional to Values each sector would have the same money and value rates of profit, and no movement of prices would be necessary to equalize the individual rates of profit. To facilitate the answer, Marx rewrites each expression for the value rate of profit by dividing both the numerator and denominator of each fraction by the Value of labor-power V:

<math display="block">\rho_i = \frac{S_i}{V_i} \bigg| \frac{C_i+V_i}{V_i} \qquad \text{and} \qquad \rho_j = \frac{S_j}{V_j} \bigg| \frac{C_j+V_j}{V_j}</math>

Each Value rate of profit is therefore itself the ratio of two component ratios: <math display="inline">S/V</math>, which Marx calls the rate of surplus-Value, and <math display="inline">(C + V)/V</math>, which he calls the organic composition of capital. We will deal with each in turn.

==== ''A. The Equality of Rates of Surplus-Value'' ====
For society as a whole in any given period, the productive activities of workers may be viewed as a certain aggregate quantity of labor-time <math display="inline">L</math>. But the very fact that the concrete labor-times of different workers can be added together requires that they have already in some way been made qualitatively equal, that they have been reduced to quantities of some ''general'' social labor-time, what Marx calls "abstract" labor-time. This reduction of concrete labor-times to abstract labor-time is of course a consequence of generalized commodity production, as discussed in the section on Value (II.4); for our purposes, what is important in this is that it implies that the labor-time of each worker represents a definite quantity of abstract labor-time.35

Of the aggregate labor-time <math display="inline">L</math>, a certain portion <math display="inline">V</math> represents the time socially necessary for the production of the means of subsistence of the working class, and the remainder <math display="inline">S</math>, the aggregate surplus labor-time, constitutes the surplus-Value materialized in commodities during their production. If the working day is the same in all branches of production, then each worker adds the same amount of Value to the product, in a given time period (like a day). If the wage rate for a given type of work is the same in all branches, then each worker can purchase the same share of the aggregate means of subsistence; a uniform wage thus represents a given quantity of (abstract) labor-time (say 4 hours a day) which each worker must put in to reproduce the Value of his or her labor-power. Clearly, if the length of the working day (say 10 hours) is indeed the same in all branches, each worker will work the same amount of surplus labor-time (6 hours a day). That is, in each sector, the rates of surplus-Value will necessarily be equal. These rates, therefore, cannot be the source of any differences between the Value rates of profit <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math>.

==== ''B. The Inequality of Organic Compositions of Capital'' ====
The above results imply that in any one sector, say sector J, <math display="inline">V</math> is an index of the total quantity of labor-time <math display="inline">L</math> worked in that sector, since any one hour of abstract labor-time requires the fraction <math display="inline">v</math> for its reproduction: <math display="inline">V = vL</math>. The quantity <math display="inline">C</math>, the value of the means of production in this sector, is, on the other hand, an index of the specific types and quantities of commodities which enter into this process of production as means of production. In general, therefore, unless each sector employs the same types of commodities and labor-powers in the same proportions as every other sector, the ratios <math display="inline">C_i/L_i</math>; and <math display="inline">C_j/L_j</math> will differ. Since <math display="inline">V_i</math>; and <math display="inline">V_j</math> are indexes of <math display="inline">L_i</math> and <math>L_j</math>, in general the organic compositions <math display="inline">(C_i +V_i)/V_i</math>; and <math display="inline">(C_j + V_j)/V_j </math> will differ.

To reiterate Marx’s conclusion: in general, the sectoral rates of surplus-value will be equal, but the organic compositions of capital will not. Hence in general the value rates of profit will differ from sector to sector.

==== ''C. The Deviation of Prices of Production from Direct Prices'' ====
Let us now return to the two circuits of capital <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math display="inline">M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>. We began earlier by noting that ''if'' prices were proportional to Values, the money rates of profit <math display="inline">r_i = (M'_i - M_i) / M_i </math> and <math display="inline">r_j = (M'_j - M_j) / M_j </math> would be equal to the corresponding Value rates of profit <math display="inline">\rho_i = S_i/(C_i + V_i)</math> and <math display="inline">\rho_j = S_j/(C_j + V_j)</math>. If in addition the Value rates of profit were themselves equal to each other, then at direct prices, capital in each circuit would realize the same ''money'' rate of profit and no movement of prices would be necessary to bring these money rates into line with the general rate.

We have just seen, however, that in general the sectoral rates will differ; if for instance <math display="inline">\rho_i</math> was greater than <math display="inline">\rho_j</math>, the capital invested in sector <math display="inline">I</math> would, with prices proportional to Values, earn a higher money rate of profit than would capital invested in industry <math display="inline">J </math> (<math display="inline">r_i = \rho_i > r_j = \rho_j </math>). ''To equalize these money rates, therefore, relative prices would have to deviate from relative values'' in such a way as to lower <math display="inline">M'_i</math> relative to <math display="inline">M_i</math> and to raise <math display="inline">M'_j</math> relative to <math display="inline">M_j</math>, for only in this way would the higher money rate of profit <math display="inline">r_i</math> be reduced and the lower money rate <math display="inline">r_j</math> be raised.

In any sector <math display="inline">K</math>, <math display="inline">M'_k</math>, represents the money price of the commodities produced, what I called earlier the sector’s total price; <math display="inline">M_k</math>, on the other hand, is the money price of the sector’s commodity inputs (means of production and labor-power), what Marx calls its (money) cost-price. Since both the total price <math display="inline">M'_k</math> and the cost-price <math display="inline">M_k</math>, are in essence determined by the prices of commodities, any movements of relative prices, including the ones under consideration here, will in general change both <math display="inline">M'_k</math>, and <math display="inline">M_k</math>: the overall price movements necessary for the formation of a general rate can therefore be quite complicated, as Sraffa has so elegantly demonstrated.36

Nonetheless, beginning from prices proportional to Values, for any sector <math display="inline">I</math> whose Value rate of profit <math display="inline">\rho_i</math> is higher than the average Value rate <math display="inline">\rho</math>, its total price <math display="inline">M'_i</math> must fall relative to its cost-price <math display="inline">M_i</math>, in order to bring its money rate of profit <math display="inline">r_i</math> into line with the general money rate <math display="inline">r </math>. The opposite movement must take place for a Sector <math display="inline">J</math> whose Value rate of profit <math display="inline">\rho_j</math> is lower than the average Value rate <math display="inline">\rho</math>.

Since the differences in the value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> upon which these price movements are predicated are themselves a consequence of the differences between sectoral organic compositions of capital, one may equally well say that, beginning from prices proportional to Values, a sector’s total price must fall (or rise) relative to its money cost-price according to whether its organic composition of capital is lower (or higher) than the social average, if its particular money rate of profit is to conform to the general rate.

It does not follow from the above, however, that the general ''money'' rate of profit will continue to equal the general ''Value'' rate of profit, once prices deviate from a strict proportionality with Values. To see why, let us recall that <math display="inline">M'</math>, the aggregate price of commodities, is the total price of the commodities which form the social product. On the other hand, the aggregate cost-price <math display="inline">M</math> is the total price of the commodities, the means of production and the labor-power, which form the inputs into the aggregate process of production. Since the price of labor-power is determined by the price of its means of subsistence the aggregate cost-price <math display="inline">M</math> is in effect the total price of the means of production and the means of subsistence.

Suppose the social product was 100 bushels corn and 100 tons iron. <math display="inline">M'</math> would be its total price. In general, the aggregate means of production and means of subsistence will also consist of quantities of one or both of these commodities, say 80 bushels corn and 60 tons iron. <math display="inline">M</math> would then be their total price. Because these two aggregate "bundles" of commodities will generally differ in their proportions of corn to iron, as is true of the case illustrated above, any movement in the price of corn relative to iron will affect them unequally. Hence ''any'' movement of relative prices will in general change the ratio <math display="inline">M'/M</math> or equivalently, the general rate of profit <math display="inline">r = [(M'-M)/M] = [(M'/M)-1] </math>.

The quantity <math display="inline">M'</math> is of course the sum of prices, while the quantity <math display="inline">\Delta M = M' - M </math> is aggregate money profit. The above result may therefore be stated in an equivalent form: in general, ''any deviations of relative prices from relative Values, including but not only'' those which arise from the formation of a general money rate of profit, ''will make it impossible for both the sum of money prices <math display="inline">M'</math> and the sum of money profits <math display="inline">\Delta M</math> to remain strictly proportional to the sum of Values'' <math display="inline">C + L</math> ''and the sum of surplus-Values'' <math display="inline">S</math>'', respectively''. This result is well known in the debate about the so-called transformation problem; but as it is stated above, it arises in a broader context. In any case, in order to discern its real content, we must examine matters a bit more carefully.

=== 3. Some General Effects of Price-Value Disproportionality ===
In much of the literature on the "transformation problem," there is a great confusion between Values, prices proportional to Values (what I call direct prices), and prices of production. In particular, since direct prices are so simply related to Values, the general issue of the differences between price and Value, and profit and surplus-Value, tends to be taken up only when we turn to prices of production. All of a sudden, we are confronted with the impossibility of a simple proportionality between Value magnitudes and their money-forms, and it begins to seem as if the analysis of Value is something quite separate from the analysis of price. 37

For this reason, I have attempted throughout this paper to carefully distinguish between Value, which stems from production, and money-price, which is the form taken by Value in circulation. With this distinction in hand, it is possible to see that money-magnitudes are ''always'' different, both qualitatively and quantitatively, from Value magnitudes. Marx notes, for instance, that precisely because the form of Value is not the same thing as Value, the determination of money-price is a ''complex combination'' of its Value elements.

Consider the simplest case, that of direct prices. Suppose the Value of a gold coin weighing 1/4 ounce (which we call a “£”)* is 1/2 worker-hour, while that of a bushel of wheat is 100 worker-hours. The direct price of wheat will then be £200. Even right here, Value (100 hours) and price (£200) are both qualitatively and quantitatively different (though related) magnitudes, with different units.

Now suppose the Value of wheat falls by half, to 50 worker-hours. How will this be reflected in its direct price? Well, says Marx, that depends; if the Value of gold also fell by a half, the money-price of wheat would remain constant at £200; if the Value of gold fell by more than a half, the money-price of wheat would rise even though its Value fell!38 Even in this simple case, therefore, the laws which determine the money-form of Value are more complex than those which determine Value itself. But this is hardly an analytical defect; on the contrary, it is the whole point of theoretical analysis to be able to derive more complex categories from basic ones.

If indeed price and Value are always distinct, what exactly is the “transformation” issue about? Clearly, it is about a ''transformation in the form-of-Value''; it is a transformation from the direct expression of Value (direct prices) o a more complex expression (prices of production). What we have to do, therefore, is to see what is altered by this change in form, and what is not.

We begin by noting that what we are considering here is a ''pure'' change of form. For instance, in the traditional formulation of the transformation we analyze a capitalist society in a simple or extended reproduction, first when exchange is ruled by direct prices, and then when it is ruled by prices of production.** In both cases, the composition and distribution of the use-values is the same: the same mass of commodities is circulated in either case, with the same physical composition of means of subsistence and surplus-product. Thus the same total commodity Value, the same aggregate Value of labor-power, and the same aggregate surplus-Value, is circulated by the two different price-forms. From the point of view of the system as a whole, the transformation leads to no real change; all that changes is the manner in which given production relations are manifested in circulation.

From the point of view of individual capitals, however, the situation is indeed different. With direct prices, each capitalist realizes an amount of money profit proportional to the surplus-Value contained in the commodities he sells. With prices of production, each sector’s money profit is no longer proportional to its surplus-Value; since the sum of Values (and hence the total surplus-Value) circulated is still the same as before, the above change of form has the effect of redistributing surplus-Value from one sphere of production to another. <blockquote>The fact that prices diverge from [proportionality with] values cannot, however, exert any influence on the movements of social capital. On the whole, there is the same exchange of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by everyone of them. (Marx, ''Capital'', Volume II, Ch. XX, Section 1, p. 393)

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (Marx, ''Capital'', Volume II, Ch. II, p. 43) </blockquote>What has been said above in fact applies to any set of prices which differ from direct prices, not just to prices of production. What it shows is that there are limits to the effects of different forms of Value, and that these limits arise precisely in the Value magnitudes whose distribution is brought about through these money-forms.

It does not follow from this, however, that the determination of money-prices is of no consequence. Different forms of Value have different ''real'' effects on individual capitals, and these in turn have different implications for the dynamic process of accumulation and reproduction. It is through the actual movements of money-prices that the system is regulated; as such, the analysis of prices of production (which act as centers of gravity of market prices), and of their relation to Values, is of the utmost importance to concrete analysis. The first step (which in most discussions of the “transformation problem” is the ''only'' step) along this path is the derivation of prices of production from direct prices.

=== 4. The Calculation of Prices of Production ===
In general, we may characterize any two circuits of capital as <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math>M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>.

When exchange is at Values, the money rate of profit in each circuit will equal the Value rate of profit in that circuit. Since Value rates will in general differ from sector to sector, owing to differences in their organic compositions of capital, exchange at Values will imply unequal rates of profit in different sectors, and hence in different circuits of capital.

It follows from the above that the formation of a general rate of profit out of the various individual rates of profit will require that for a sector with a Value rate of profit higher than the social average, the money price of its product <math display="inline">M'_i </math> must fall relative to its money cost-price <math display="inline">M_i </math>, since only this movement will lower its money rate of profit <math display="inline">r_i </math>. As we saw earlier in section III.2.C, this ''must'' hold regardless of how complicated the effects of the formation of a general rate of profit on the overall pattern of prices. And as we shall see immediately, ''it is precisely this movement which is captured by Marx’s own transformation procedure''.

==== ''A. Marx's Transformation Procedure'' ====
The example below illustrates the three basic circuits of capital in Marx’s analysis: Circuit I represents the production of the means of production themselves, Circuit II the production of the means of subsistence of the working class, and Circuit III the production of the means of consumption of the capitalist class. The example itself, though from Bortkiewicz, not Marx, is used because it is the standard illustration of the so-called transformation "problem" and appears in most discussions of the issue.

Because we have throughout distinguished between Value and money-price and because the issue at hand centers on differences in their magnitudes, we must be careful with notation. As defined earlier, <math display="inline">C_i</math> will represent the value of the means of production of the <math display="inline">i </math>th department, <math display="inline">V_i</math> the value of the labor-power employed there, and <math display="inline">S_i=L_i-V_i </math> the surplus-value produced there; the total value <math display="inline">C_i + L_i</math> produced will be designated by <math display="inline">W_i </math>. In contrast, <math display="inline">MC_i </math> will represent constant capital, the money price of the means of production used in the department, and <math display="inline">M V_i </math> variable capital, the money price of the labor-power used there; as before, <math display="inline">M_i </math> will be the total cost-price and <math display="inline">M'_i </math> the total price of the product. All Value quantities will be in units of (abstract) labor-time, worker-hours, and all money quantities in £'s (1/4 ounce gold coins). It is also assumed that each £-coin has a Value of 1/2 worker-hour.

When exchange is at Values, we get the results shown in Table 1. It should be noted that the table has been designed to correspond to the whole circuit of capital, <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M'</math>, so that the phases of circulation are clearly distinguished from those of production.
{| class="wikitable"
|+Table 1 / Exchange at Values
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
! colspan="2" |<math display="inline">... (C+L) </math>
! colspan="2" |<math display="inline">\rightarrow M' </math>
|-
|
!Constant Capital (MCi)
!Variable Capital (MVi)
!Cost-price (Mi)
!Value of Means of Prod. (Ci)
!Value of Labor-Power (Vi)
!Surplus Value (Si)
!Total Value (Wi)
!Value Rate of Profit % (Pi)
!Total Price (M'i)
!Total Profit (ΔMi)
|-
|(Means of Production)
|450
|180
|630
|225
|90
|60
|375
|19.05
|750
|120
|-
|(Means of Subsistence)
|200
|240
|440
|100
|120
|80
|300
|36.36
|600
|160
|-
|(Capitalist Consumption)
|100
|180
|280
|50
|90
|60
|200
|42.85
|400
|120
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|
|£1750
|£400
|}
Marx’s transformation procedure is simple: noting that in Table 1 the total cost-price <math display="inline">M </math> = £1350 (column 3) and the total money profit <math display="inline">\Delta M </math> = £400 (column 10), we get an average rate of profit on social capital of <math display="inline">r= 400/1350 = 29.63 \% </math>.

At existing prices, however, the capital in circuit I, invested in department I, would realize only a 19.05% rate of profit. Thus, in order to raise its money rate of profit to the average level, it must raise its money price. Since its money cost-price is £630, the “normal” profit that it would earn at the average rate of profit is 29.63% of £630, which is £186.67: the level to which it must raise its price therefore is given by M' = £630 + £186.67 = £816.67. Similarly, department II must lower its money-price to M' = £570.37, and department III must lower its to M'= £362.96 (see Table 2).
{| class="wikitable"
|+Table 2 / Max's Transformation
|
! colspan="3" |<math display="inline">M \rightarrow </math>
! colspan="3" |<math display="inline">(C+V) ... P</math>
!<math display="inline">... (C+L) </math>
!<math display="inline">\rightarrow M' </math>
!
!
|-
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi'
!ΔMi
!ri
|-
|I
|450
|180
|630
|225
|90
|60
|375
|816.67
|186.67
|29.63
|-
|II
|200
|240
|440
|100
|120
|80
|300
|570.37
|130.37
|29.63
|-
|III
|100
|180
|280
|50
|90
|60
|200
|362.96
|82.96
|29.63
|-
!Total
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|}
Table 2 illustrates Marx's transformation procedure. In it, the transformation ''per se'' refers to the movements of money-prices, ''not'' to changes in the Value flows. ''Moreover, the direction of movement of money prices'' <math display="inline">M'_i </math> ''to their corresponding cost-prices'' <math display="inline">M_i </math> ''is the correct one'': <math display="inline">M'_1 </math> rises relative to its cost-price, and <math display="inline">M'_2 </math> and <math display="inline">M'_3 </math> fall relative to theirs.

==== ''B. The "Correct" Prices of Production'' ====
From Bohm-Bawerk onwards, critics have argued that Marx’s procedure was simply incorrect. They pointed out, for instance, that his transformation leaves the money prices of inputs (MC;, MV;) unchanged, whereas a thoroughgoing transformation would change these too. Marxists have countered these charges by claiming that, in any case, one can show the formal possibility of deriving prices of production from direct prices; in the Bortkiewicz method, for example, one can solve for a series of price multipliers which would enable one to transform the exchange-at-Values scheme of Table 1 to the “correct” exchange-at- prices-of-production scheme.39 Then, depending on whether one prefers the sum of prices or the sum of profits as constant, one can always “normalize” the multipliers derived from the Bortkiewicz method to make one or the other hold, for in general both cannot.

Even if the controversy about the appropriate “normalization,” much of which arises from a confusion between Value and money-price, is satisfactorily resolved, the real problem with all of these foregoing transformation procedures remains: they effectively sever the link between Values and money-prices, or at least bury it in algebra, and are forced to reject Marx’s own procedure as completely erroneous. Thus for instance in this example, the appropriate algebraic procedure would "jump" us from Table 1, representing exchange at Values, to Table 3 below, which portrays the "correct" price of production scheme under an (algebraically) arbitrary "normalization" which keeps the sum of money-prices (£1750) invariant to the transformation. In all of this, Marx’s own trans- formation, as represented in Table 2, plays no role at all.
{| class="wikitable"
|+Table 3 / The "Correct" Prices of Production
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi
!Delta Mi
!ri
|-
|I
|504
|168
|672
|225
|90
|60
|375
|840
|168
|25%
|-
|II
|224
|224
|448
|100
|120
|80
|300
|560
|112
|25%
|-
|III
|112
|168
|280
|50
|90
|60
|200
|350
|70
|25%
|-
!Total
|£840
|£560
|£1400
|375
|300
|200
|875
|£1750
|£350
|
|}

==== ''C. Marx's Transformation Procedure Extended'' ====
Marx himself never goes beyond the transformation procedure he illustrates in Volume III of ''Capital''. And yet in several instances, he indicates clearly his awareness of the issue:40 <blockquote>Aside from the fact that the price of a particular product... differs from its value... the same circumstance applies also to those commodities which form the constant part of (its) capital, and indirectly also its variable part, as the labourer’s necessities of life... Under capitalist production, the general law acts as the prevailing tendency only in a very complicated and approximate manner, as a never ascertainable average of ceaseless fluctuations. (''Capital'', Vol. III, Ch. IX, p. 161.)

The foregoing statements have at any rate modified the original assumptions concerning the determination of the cost-price of commodities... Since the price of production may differ from the value of a commodity, it follows that the cost-price of a commodity containing this price of production of another commodity may also stand above or below that portion of its total value derived from the value of the means of production consumed by it. It is necessary to remember this modified significance of the cost-price, and to bear in mind that there is always the possibility of error if the cost-price of a commodity in any particular sphere is identified with the value of the means of production consumed by it. Our present analysis does not necessitate a closer examination of this point. (''Ibid.'', pp. 164-65.) </blockquote>To his critics, especially to those for whom only the ''calculation'' of prices of production has any significance, Marx’s postponement of the “feedback” effects of the price-Value disproportionalities is an admission of failure—hence the so-called “great contradiction” between Volumes I and III.

But there is in fact a simple alternative: Let us extend Marx’s procedure by progressively “feeding back” the effects of the initial price-Value disproportionalities and see what happens. Table 4 illustrates this extended procedure. In order to emphasize the fact that the transformation and its extension affect only money flows M and M', and not the Value flows (C + V) ... P... (C+L), I have included both. This is somewhat tedious but it does make it clear that Value and surplus-Value are distinct from price and profit, a distinction which arises precisely from the difference between the spheres of production and circulation. But before we turn to this, we must first understand the logic involved.

We begin with exchange at Values (as was previously illustrated in Table 1). Let us now consider for a moment the real content of Marx’s transformation procedure. If prices were actually proportional to Values, then rates of profit in each sector would differ from the social average. All other things being equal, either the competition of capitals or the threat of this competition would force the various sectors to adjust the prices of their products in such a way as to realize only the average rate of profit. In Department’s II and III, for instance, which would have higher than average profit rates, either the threat of competition or else the actual inflow of capital would lower prices till only the average profit was obtained; in Department I, the reverse would take place.

In any real situation similar to the above, the actual adjustment process would involve changes in both the unit prices and the quantities sold; any actual inflow of capital would lower price through an expansion of supply; conversely, any lowering of price in response to the threat of competition would increase the amount sold.

But what we are interested in here is the pure change of form involved in the equalization of profit rates. And this, for a given mass of commodities, is an adjustment process ''which leaves the total sum of money prices unchanged'': since the cost-prices have already been incurred by the individual capitalist, the immediate burden of adjustment must fall upon current product prices, and their response in the face of capitalist competition is precisely to rise or fall till the individual rates of profit all equal the existing average rate. This simply means that the unit price of average commodity output is under no immediate compulsion to change, because in this case the rate of profit is the average rate. The average commodity, however, is only a microcosm of the total mass of commodities: the constancy of its price is therefore equivalent to the constancy of the total sum of prices.

Marx’s transformation procedure is merely an application of the logic of this adjustment process. In Table 4, the initial situation under consideration in Step 1A is exchange at Values: the sum of prices is £1750, and the sum of profits is £400. Step 1B then illustrates Marx's own transformation, in which the immediate process of adjustment redistributes the given mass of surplus-Value (whose magnitude cannot of course be changed in circulation) by raising prices in Department I and lowering them in II and III. The sum of money prices remains unchanged at £1750, and in this instance the sum of money profits also remains at its previous level of £400.

Expressed in proportion to its previous price, which was its direct price, the change in the money-price of Department I is Yy = 816.67/750 = 1.089. Similarly, ¥, = 0.951 and ¥ = 0.907.
{| class="wikitable"
|+
!
!
!
!
|-
|
|
|
|
|-
|
|
|
|
|-
|
|
|
|
|}
It is only in the next step, Step 2A, that we see the effect of the above deviations from direct prices on the cost-prices in each amount of capital. Since Department I produces the means of production for all departments, its price multiplier {/; = 1.089 will imply higher money prices (MC;) for all means of production. Similarly, since Department II produces the means of subsistence, its price multiplier ¥/, = 0.951 implies a lowering of the money costs of labor- power (MV;) in each amount. Y3, on the other hand, will not affect either component of cost-prices, since Department III produces only commodities for the consumption of capitalists.

Capitalists in each department will now have incurred new cost-prices differing from those in Step 1B. If they were to continue to sell their products at the prices of Step 1B their rates of profit would no longer be equal. This is the case illustrated in Step 2A. The overall effect of the preceding “feedbacks” is to raise the aggregate cost-price from £1350 to £1387.04. Since the sum of prices is unchanged, this results in a decrease of total money profit from £400 to £362.96.

Once again, therefore, capitalists in each sector would be compelled to adjust their individual money rates of profit to conform with the average rate, through the movements of their respective commodity-prices; once again, the average commodity, and hence the total mass of commodities, would be under no such compulsion, so that the total sum of prices would remain constant at £1750.

The resulting situation is depicted in Step 2B. Department I's price, compared to its previous level in Step 1B (and 2A), has risen again, this time by Yy = 834.12/816.67 .021, while those of II and III have fallen from their previous levels by Y, = 0.986 and Y3 = 0.973. The pattern of transfer of surplus-Value has therefore been altered once again; moreover, in this case the money form of the mass of surplus-Value (i.e., total money profit) has been altered in magnitude. In the same way, the money rate of profit (26.17%) is no longer simply equal in magnitude to the value rate of profit (29.63%).

In each succeeding step, the procedure may be repeated until the changes from one step to another are negligibly small—and we find ourselves with the “correct” prices of production first illustrated in Table 3! This is not, as is usually the case, on the basis of an alternative to Marx’s procedure of transformation, but rather on the basis of its successive application.

The procedure illustrated in Table 4 is quite general. The proof is left to Section VI of the mathematical appendix to this paper.

== V. Some further considerations ==
In the preceding discussion, four important points have emerged in connection with the so-called “transformation problem.”

First of all, it is not a case of transforming ‘“Values into prices.” Rather, it is a case of transforming one form-of-Value, direct prices, into another form, prices of production.

Secondly, the issue under consideration involves a pure change of form. As such, the transformation from direct prices to prices of production does not involve any ''real'' change for the system as a whole. The total mass of commodities, and the various portions of it going to each class, remain the same as before. By the same token, so do the sum of Values and sum of surplus-Values. What the transformation brings about is a different division of the total pool of surplus-Value among individual capitalists.

Third, the transformation procedure set out by Marx reflects the inherent nature of the process of the equalization of profit rates. This is a continuously occurring process, and in its pure form it acts by changing prices of individual commodities while leaving the sum of prices of a given mass of commodities intact. In addition, Marx’s procedure can be extended in a simple way to derive the “correct” prices of production.

Lastly, in the case of the “correct” prices of production, the money rate of profit will deviate from the Value rate of profit. Like the deviations of prices of production from direct prices, however, the money and Value profit rate deviation is systematic and determinate. Though we do not prove it here, it can be shown that (under any given conditions of production), the money rate of profit will vary with the Value rate.41

These connections by no means exhaust the possibilities. The relation between the mass of surplus-Value and its transformed money-form (total money profits under prices of production) still needs to be better specified.<ref group="CN">Mediante su procedimiento, Shaikh no logra mantener la invarianza "Masa de plusvalía = Masa de ganancia monetaria"; aunque si mantiene "Masa de valores = Masa de precios de producción" puesto que estos agregados no cambian durante su transformación</ref> So too does the relationship between individual prices of production and the corresponding Values.<ref group="CN">?</ref>

Perhaps the most important point to keep in mind is that the laws that Marx derives on the basis of this theory of Value cannot be derived from a theory which ''begins'' with prices of production. For instance, Marx’s distinction between Value and money-price goes hand in hand with a corresponding differentiation between production and circulation. It consequently becomes necessary to distinguish between activities which produce commodities and those which circulate them, and eventually this difference develops in the more complex and powerful distinction between surplus-Value ''producing'' labor (what Marx calls “productive” labor) and all other types (which Marx relegates to the category of “unproductive” labor). Among other things, an increase in the proportion of unproductive labor (say advertising) to productive labor, for given level of total employment, would imply a smaller mass of surplus-Value to be shared out, and hence a smaller rate of profit. Such a conclusion has no parallel in orthodox theories of price.

Marx’s analysis abounds with similar examples. His theory of money, for instance, is the direct opposite of the Quantity Theory.42 Similarly, his theory of the falling tendency of the rate of profit, and the theory of accumulation and crises which stems from it, receive their characteristic form from the distinction between constant and variable capital—precisely a distinction which makes no sense without the notion of Value.

All of this means that if Marx’s economic analysis is to be developed, it must first be understood. Or else it must be abandoned altogether. The latter path is no doubt simpler, and certainly more consistent with orthodox economics. If the task is to understand the world in order to change it, then the adequacy of analysis, not its "acceptability," is all that matters. And on that basis, it seems to me that Marx’s analysis is the most appropriate starting point.

== VI. Conclusions ==
It is the function of all scientific analysis to get beneath the surface of phenom- ena, to reduce their apparent movement to the real: . . . all science would be superfluous if the outward appearance and the essence of things directly coincided.”*3

The outward appearance of the sphere of circulation is one of freedom, equality, and choice: it is a world whose real inhabitants are inherently-equal- things, commodities, a world into which human beings enter only as representa- tives of these “natural” democrats: “It is an enchanted, perverted, topsy-turvy world, in which Monsieur le Capital and Madame la Terre do their ghost-walking as social characters and at the same time directly as mere things.”*

To Marx, the great merit of classical economy was that it saw through, albeit incompletely, this “false appearance and illusion, this mutual independence and ossification of the various social elements of wealth, this personification of things and the conversion of production relations into entities, this religion of everyday life. It did so by reducing interest to a portion of profit and rent to the surplus above average profit, so that both of them converge in surplus-value; and by representing the process of circulation as a mere metamorphosis of forms, and finally reducing value and surplus-value of commodities to labour in the direct production process.”*S In this way the classical economists were able to get beyond the simple conceptions generated by the outward appearance of capitalism, penctrating the disguise of circulation and seeing behind it the pro- cess of production. But they themselves were trapped by their inability to properly distinguish capitalist production from other historically determinate forms; by taking as given and eternal the concepts generated by the outward appearance of capitalist production, they remained “more or less in the grip of the world of illusion which their criticism had dissolved.”*

The “world of illusion” Marx refers to represents the conceptions com- mon to bourgeois thinkers; it covers not only the actual analysis of classical economists and of their targets, the vulgar economists, but also the conceptual framework within which they clash. Contained in their agreements and disagree- ments is an implicit philosophy, an implicit theory of history, an implicit anthro- pology, and so on.%7 Thus for Marx the critique of classical economy is at the same time a critique of its philosophy, its history, its anthropology. His analysis in Capital is necessarily predicated on all of these critiques; the vast distance between Marx and the classical economists, and hence between “value” in Marx and “value” in classical economy, can only be understood if one recognizes136 THE HIDDEN MEANING QF THINGS that in solving the problems of the classical economists Marx also breaks with the (often implicit) bases on which they had formulated their questions.

Insofar as the problems to be dealt with center largely on the magnitude of Value, as is often the case in this paper, the real difference between Marx and Ricardo, the difference in their methods, tends to be hidden. Marx’s superior ability to solve Ricardo’s problems, is, as he himself insists, due to his ability to transcend “‘the world of illusion” in whose grip Ricardo remains. This superior ability is therefore only a symptom of the real difference between Marx 2nd the classicals. But to those who either explicitly or implicitly reduce Marx to Ricardo, this symptom becomes the real difference itself. Marx becomes a clever, if somewhat mystical, post-Ricardian.

The very same process of reduction often operates even further in the comparison of Marx to neoclassical analysis. Not only are Marx and Ricardo lumped together, but both are reduced to the one-dimensional world of neo- classical analysis. Here, the very conception of the problem to be analyzed is usually neoclassical; even those who reject the flatness of its theory are very often forced to fight their battles on its terms, and hence within its general framework.

The so-called transformation problem is a classic example of all this. As it is usually presented, the central issue is one of the calculation of static prices of production, and the major point of contention is the presence or absence of a relationship between Marx’s transformation procedure and the “correct” one.

I have, as much as possible, attempted to avoid this trap. Certainly the issue of calculation is relevant; but the conception of that-which-is-to-be-calcu- lated comes first, for in that conception lies the superiority of Marx’s method. The early part of this paper therefore attempts to provide the basis of Marx’s conception of prices in general, and prices of production in particular. In this way we are able to resolve many of the confusions surrounding the so-called “transformation problem,” as well as being able to demonstrate that the “cor- rect” prices of production can be calculated from values i the manner suggested by Marx’s own transformation procedure.

== Mathematical Appendix ==
Lack of space makes it impossible to include the mathematical appendix to this reading. However, [https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ a copy of the appendix] is available on request from the author of this reading.

== References ==

# L. Althusser and E. Balibar, ''Reading Capital'', translated from the French by Ben Brewster, Pantheon Books, (New York: Random House), 1970.
# W. Baumol, “The Transformation of Values: What Marx ‘Really’ Meant (An Interpretation), ''Journal of Economic Literature'', March 1974, Vol. XII, No. 1.
# A. Emmanuel, ''Unequal Exchange: A Study of the Imperialism of Trade'' (New York: Monthly Review Press), 1972.
# T. Kuhn, ''The Structure of Scientific Revolutions'' (Chicago: University of Chicago Press), 1970.
# E.Mandel, “Value, Surplus Value, Profit, Prices of Production and Surplus Capital—A Reply to Geoff Hodgson,” ''International Socialist Review'', Vol. 2, No. 1, Spring 1973.
# K. Lancaster, ''Mathematical Economics'' (New York: The Macmillan Company), 1968.
# Karl Marx, ''A Contribution to the Critique of Political Economy'', with an Introduction by Maurice Dobb (New York: International Publishers), 1970.
# —, ''Theory of Surplus Value: Volume IV of Capital'' (Moscow: Progress Publishers), Part I, 1969; Part II, 1968; Part III, 1971.
# —, ''Capital'', Volumes I-III (New York: International Publishers), 1967.
# —, “Comments on Adolph Wagner’s ‘Lehrbuch der politischen Okonomie’, 1879/80,” published as ''Karl Marx on Value'', British and Irish Communist Organization, Belfast, 1971.
# A. Medio, “Profits and Surplus-Value: Appearance and Reality in Capitalist Production,” published in ''A Critique of Economic Theory'', edited by E. K. Hunt and Jesse G. Schwartz (London: Penguin Books), 1972.
# R. Meek, ''Economics and Ideology and Other Essays'' (London: Chapman and Hall), 1967.
# M. Morishima and F. Seton, “Aggregation in Leontief Matrices and the Labour Theory of Value,” ''Econometrica'', Vol. 29, 2 (April 1961), pp. 203-220.
# M. Morishima, ''Marx's Economics'' (Cambridge: Cambridge University Press), 1973
# J. Robinson, ''An Essay on Marxian Economics'', Second Edition (London: Macmillan; New York: St. Martin’s Press), 1969.
# B. Rowthorn, "Skilled Labour in the Marxist System," ''Bulletin of the Conference of Socialist Economists'', Spring 1974, pp. 25-45.
# P. A. Samuelson, "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, Vol. IX, No. 2, pp- 399-431.
# F. Seton, “The ‘Transformation Problem’,” ''Review of Economic Studies'', June 1957, 25, pp. 149-160.
# A. Shaikh, ''Theories of Value and Theories of Distribution'', Columbia University Ph.D., 1973 (unpublished).
# P. Sraffa, ''Production of Commodities by Means of Commodities'' (Cambridge: Cambridge University Press), 1960.
# P. M. Sweezy, ''The Theory of Capitalist Development'' (New York: Monthly Review Press), 1964.

== Endnotes ==

== Footnotes ==

== Critical Notes ==
<references group="CN" />
[[Category:Works by Anwar Shaikh]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T04:55:39Z

Ismael:

{{Library work|title=Marx's Theory of Value and the "Transformation Problem"|author=Anwar Shaikh|published_date=1977|pdf=https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ}}

== I. Introduction ==
It is curious that in the almost eighty years since the publication of Volume III of Marx's ''Capital'', a major theoretical problem, the infamous "transformation problem," has never been satisfactorily resolved. Throughout Volume I, written by Marx ''after'' he had already completed the first draft of Volume III, the analysis is based on the assumption that exchanges of commodities take place at prices proportional to their labor values. I will call these prices the "direct prices" of commodities. In Volume III, which was compiled by Engels from the incomplete first draft, after Marx's death, Marx extends his analysis to take into account "prices of production," demonstrating how one can derive these prices from the "direct prices" of Volume I. This derivation, from then on the center of an intense controversy, was the original "transformation procedure."

Opponents of the labor theory of value immediately seized on the apparent incompleteness of Marx's procedure. Bohm-Bawerk, for instance, questioned the tenability of Marx's statement that the sum of prices after the transformation would remain equal to the sum of values; others have pointed out that Marx's procedure contains an "error," because while he transforms the prices of outputs from "direct prices" to "prices of production," he leaves the inputs untransformed. Since commodities appearing as outputs of a productive system are often also inputs into the system, it is argued that Marx's procedure is logically flawed; "direct prices" and "prices of production" are two separate and unrelated phenomena, leading to a "great contradiction" between Volume I and Volume III of ''Capital'', More recently, essentially the same point has been made by Samuelson [17], in which he attacks the very idea of a transformation procedure: "Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila! You have completed your transformation algorithm."1 As we shall see. this criticism is completely incorrect, it is also somewhat misplaced; if anything, it applies most properly to the neoclassical "transformation procedure" which was the center of the so-called Cambridge Capital Controversies, a procedure in which Samuelson himself was quite prominent.*

On the Marxian side, there have been, of course, many "solutions" to the transformation problem, from Bortkiewicz’s original transformation procedure and its subsequent variants to Francis Seton’s important paper [18]. Unfortunately, as even supporters and sympathetic critics of the labor theory of value admit, these "solutions" all suffer from the same basic defects; they show "the possibility of a consistent derivation of prices from values"2 while apparently severing the crucial links between price and value magnitudes which Marx seemed to emphasize in his own procedure. In most discussions of the issue, these links have appeared in the form of the following equalities: of the "sum of prices" and the "sum of values"; of the magnitude of profits and the magnitude of surplus-value; of the profit-wage ratio and the rate of surplus- value; and of the general rate of profit in price terms and the same rate in value terms. As is well-known by now, in any "correct solution" either the first or the second, but not both, can be always made to hold, while in general the other two cannot. What then are we to make of Marx’s procedure?

It has been suggested that Marx, having published Volume I in full confidence that the labor theory of value was the correct basis, discovered too late, in writing Volume III, that it was not. But that doesn’t work, because we know that Volume I was published well after Volume III had been drafted. Others, perhaps more charitably, have suggested that because the labor theory of value as a theory of relative prices was so much a part of the tradition of classical economics, it was taken over by Marx almost unexamined. A variant of this line of reasoning, which is popular among some Marxists, is that if nowadays we view Marx-as-an- economist as a member of the classical school, it is we who import into Marx’s theory of value, which is only nominally similar to that of Smith and Ricardo, the pre-Marxian question of the quantitative relationship between prices and values. In the variant, therefore, the lack of examination is on our part, not that of Marx. Marx was simply not terribly concerned with the quantitative relationship.3

To anyone who has read Marx’s voluminous comments and critiques of the classical economists, notably in ''Theory of Surplus-Value'' and in ''Capital'', it becomes impossible to ascribe to Marx an unthinking take-over of a labor theory of value from anyone at all. Marx spends literally hundreds of pages discussing values and their relationship, both qualitative and quantitative, to wages, profits and prices; no aspect, no issue, is ignored in these incredibly detailed discussions. So the main line of that argument does not hold up. As for the variant, insofar as it argues that there is a vast difference between the "value" of Smith and Ricardo and the "value" of Marx, it is undeniably correct; where it goes wrong is in jumping from this important fact to the conclusion that Marx either does, or even could ignore the quantitative aspects which dominated the pre-Marxian "value theory."

Consider for a moment the fact that there is a vast difference between Einstein and Newton too, one which stems from different methodologies, different objects of analysis, etc., and extends all the way to differences in concepts and calculations. There is, in other words, what Thomas Kuhn calls a "paradigm break" between the two modes of analysis.4

The notion that Einstein and Newton, for instance, treat what appears to be some autonomously defined subject—"Physics"—is an illusion which is fostered by textbook propagandists whose very aim is to treat science as the glorious and lofty march towards "truth." In reality, however, almost every conception and calculation in Relativity Theory contradicts those of classical physics.

To reduce Einstein to a "tidied up" Newton would therefore be impossible. What is worse, this impossibility would show up in the form of "logical contradictions," "redundancies," and "irrationalities" in Einstein, not in Newton, for the propositions derived from the Theory of Relativity cannot be derived within a Newtonian basis. What can we say, for example, in a Newtonian framework about the fundamental Einsteinian notion that there exists a finite limit, the speed of light, for the velocity of any object? Only that it is clearly wrong, or at best, a notion we (as Newtonians) have no use for in our framework—one which therefore appears "mythical," "metaphysical," "irrelevant."

Insofar as some Marxists have pursued a similar line of argument as to the "reduction’" of Marx to Ricardo, they have been making an absolutely crucial point: namely, that by attempting to "reduce" Marx to Ricardo, or to neoclassical economics, the impossibility of this reduction will manifest itself as a series of "contradictions" and "irrationalities" in Marx! What we think we find, on a Ricardian or neoclassical basis, is that Marx is simply incorrect, or at best gets involved in an "unnecessary muddle."5 What we have in fact demonstrated is that you cannot derive Marx from Ricardo or Samuelson.

Obviously, none of this implies that Marx is above criticism. The point here is that in order to be able to evaluate Marx’s solution to some problem, we must first of all define the problem. We must, in other words, ''locate'' the problem in terms of some general analysis, so that we may see which solutions are adequate and which are not. It has often been said that the hardest part of solving a problem is figuring out the question!

Some Marxists, however, jump from the implications of the difference between Marx and Ricardo to the false conclusion that Marx was, or at least that Marxists could be, unconcerned with the quantitative relationships between prices and values (whether he was and whether Marxist analysis could be are in fact two separate issues, but one leads to the other).

To begin with, the statement that Marx did not in fact consider these matters to be important runs headlong into the contrary evidence of the vast amount of attention Marx’s writings give to them; the only way to get around this evidence in turn, is to try and show that the issue itself is irrelevant. In this way the real basis of this line of reasoning turns out to be the argument that Marxist analysis can, and should ignore the quantitative relationship. On the one hand, this argument gets much of its impetus from the persistent, and to some extent, damaging attacks on the "transformation from values to prices"; and on the other, it derives much of its appeal from a reaction against the obvious banality of neoclassical economics, in which relative prices figure so prominently. Nonetheless, the argument is simply untenable, for it is based on an ''unspoken'' conception about scientific analysis which when made explicit is quite unsupportable: namely, that as a science, the Marxist analysis of capitalism can simply choose to ignore the quantitative aspects of any phenomena, once it has understood the qualitative aspects. Marx himself had a higher opinion of his work:<blockquote>Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves. (''Capital'',* Volume III, Part I, Ch. I, p. 25) </blockquote>Unfortunately not many Marxists today seem willing to accompany Marx all the way in his arduous journey; and of those that do, even fewer appear to be interested in pulling together and extending, where necessary, the sometimes incomplete analysis of Volume III. The labyrinths of the turnover of capital in Volume II, the "petty detail" of the endless tables of differential rent in Volume III, and certainly the unending controversy about the "transformation problem" must all seem so very tedious, perhaps even dangerously confusing, to those who remain content to bask in the brilliance of Volume I.6 But Marx at least did not find in the difficulty of a subject a sufficient reason for avoiding it:

That is a disadvantage I am powerless to overcome, unless it be by forewarning and forearming those readers who zealously seek the truth. There is no royal road to science, and only those who do not dread the fatiguing climb of its steep paths have a chance of gaining its luminous summits. (''Capital'', Volume I, "Preface to the French Edition," p. 21)

== II. Value and Price ==

=== 1. Calculation versus Conception ===
I have, up to now, confined myself to a discussion of the so-called "transformation problem" and of various attitudes toward it. It is, however, a major purpose of this paper to demonstrate that one can, ''precisely in the manner set out by Marx'', calculate the "correct prices of production" from values. The link between the two, one so obvious that until recently it seems to have been completely overlooked, ** is simply that while Marx’s procedure is a perfectly general one, it is only the first step in an iterative transformation from "direct-prices" to "prices of production." But while this extension of Marx’s procedure does falsify the so-called "impossibility theorems" on it (most recently voiced by Paul Samuelson), it by no means establishes the need for such a transformation in the first place. As has often been pointed out, "prices of production" can instead be calculated directly from the same "‘economic data" as "direct-prices." The difference between the two methods of calculation therefore lies not in the end point but in the beginning; that is, it lies not in the magnitude of "prices of production" but in their meaning, in their conception. To reduce the issue of the transformation to one of merely calculation, is simply to reduce Marx to neoclassical economics. And, as I pointed out earlier, the impossibility of such a reduction can only "show up" as a "redundancy" in ''Marx'': after all, if both methods arrive at the same end point, why bother with Marx’s needless "detour" through values?

The question may be put more precisely: in what way is Marx’s analysis of value different from that of orthodox economics? What sorts of issues, conceptions, and calculations are specific to it alone? What laws does Marx derive from it which cannot be derived from conventional economic analysis? Unless we make an attempt to answer these questions, any discussion of the "transformation" issue is quite irrelevant: without a proper understanding of the concept of value as it appears in Marx, it is pointless to try and analyze the so-called "transformation from values to prices of production." The discussion of the actual transformation algorithm is therefore postponed until Section III. In this section we must establish its ''raison d’etre''.

=== 2. Basic Method ===
<blockquote>Whatever the social form of production, labourers and means of production always remain elements of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another. (''Capital'', Vol. II, Ch. I, Section I, p. 34.)

The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers... which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. (''Capital'', Vol. III, Ch. XLVII, Section II, p. 791.) </blockquote>The preceding quotes present a crucial element of the Marxist approach to history: namely, that the specific manner in which production is organized, and surplus-labor extracted from the direct producers, forms the "hidden basis of the entire social structure." For Marx, it follows from this that the concepts adequate to the analysis of any specific historical epoch, including that of capitalism, must necessarily be based on these aspects of its social practice. The struggle for production is the fundamental social practice in all human society; hence the analysis of production is the beginning point of Marxist analysis. The extraction of surplus-labor is the basis of all class societies; hence its study is the source of the concepts adequate to an analysis of all class societies. ''Capital'' is Marx’s application of this approach to the analysis of capitalism.

=== 3. The Production of Commodities ===
One very important aspect of the social process in which laborers and means of production are united in the ''capitalist'' mode of production, as opposed to all others, is that under the capitalist mode the overriding aim of production is not production-for-direct-social-use but production-for-exchange. In the caste system of India, for example, the social regulation of productive activity is made starkly visible by the existence of hereditary castes whose members can, and in fact must, perform only those concrete types of labor which are required of their caste. Production is, in this society, production-for-direct-social-use (whatever we may think of that use); distribution of the products of labor is similarly directly regulated.

But in capitalism, we have commodity production. What turns a product (something which is produced) into a commodity (something which is bought and sold) is a specific set of social structures which organize the productive activities (the labor) of society around production-for-exchange. In commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction. Society is organized in such a way that there is no ''direct'' social regulation of productivity activity: during production people act as individuals, relating only to their products; it is in exchange, therefore, that the true social nature of their existence is forcibly demonstrated to them through the relation of their commodities to those of others. Exchange, so to speak, is a "symptom" of commodity production, and its real limits can only be understood by relating exchange to its "hidden basis"—i.e., to production. It follows, therefore, that in a Marxist analysis the derivation of the categories of exchange, such as money and price, as well as their movements, must necessarily be based on the categories of production. Taken by itself, as an eternal category divorced from any particular type of production, exchange appears to be a smooth, static, inherently equilibrating process: witness the parables of neoclassical economics. Circulation is, to all appearances and purposes, the sphere of freedom, equality and equilibrium. But for Marx, circulation is precisely the sphere in which the contradictions inherent in the production of commodities are "both exposed and resolved";7 the manner in which these contradictions in production dominate exchange, both qualitatively and quantitatively, is what Marx means by the law of value: "in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time necessary for their production forcibly asserts itself like an overriding law of Nature."8

=== 4. Exchange-Value and Value ===
In all production, concrete (i.e., specific) types of labor and concrete inputs result in a concrete product. Moreover, since the produced inputs themselves must be the products of past labor, we may say that in all production, including commodity production, concrete products are the results of concrete labors, in a given natural context.9 But commodity production (the production of goods-for-exchange) necessarily implies exchange; and in exchange the distinct qualities which give various commodities their "concreteness" are abstracted from. In exchange, what matters is not the physical properties of iron but how much wheat, or cloth, or coffee, etc., we can get for the iron; hence in exchange we treat every commodity not as a concrete bundle of distinctive qualities, but as the equivalent of specific ''quantities'' of all other commodities.

Precisely because exchange is a social process which quantitatively compares and equates different products, it is only in those societies which produce for exchange that the product of human labor acquires the property of "quantitative worth." In addition to being useful, they are now also "valuable": they are commodities.

We have to get a little more exact in our terminology at this point. In conventional usage (and with some classical economists), the term "value" sometimes refers to the notion of a useful object, and at other times to the notion of the "quantitative worth" of an object. In order to avoid confusion, therefore, Marx uses the term ''use-value'' to mean useful object, and the term ''exchange-value'' to mean the quantitative "worth" of an object. In Marx's terminology, therefore, a commodity is both a use-value and an exchange-value.

It is usually not difficult to explain what is meant by a useful object.* But when we say that a commodity is "worth" something just what is implied? Suppose I say that in barter a bushel of corn is "worth" a ton of iron, and also a yard of silk, and an ounce of gold, and so on. At first glance, what I appear to be saying is that there are many different quantitative expressions for the "worth" of a bushel of corn, depending on which other commodity (iron, silk or gold) I choose to ''measure'' it by.

But there is a deeper problem here. In order for me to measure the "worth" of corn in terms of gold, for instance, gold must also be "worth" something itself. Otherwise I cannot say how much gold is equivalent to a bushel of corn. It is just like my saying that a stone "weighs" ten grams; what I mean is that on a scale it takes ten pieces of iron called gram-weights to equal the weight of the stone. But clearly, in order for me to carry out this operation, both stone and iron must already possess the property of being "heavy," of having "weight"; the gram-weights don’t make stones ‘"heavy," they only measure the already existing heaviness of stones.

Exactly the same conclusion applies to "quantitative worth." The factors which cause commodities to have "quantitative worth" in the first place must be carefully distinguished from the measurement of this "worth." Measuring the "worth" of corn in iron will give a different result from measuring it in gold; but neither measure causes corn to have "quantitative worth." Rather, each merely expresses the preexisting "worth" of corn in terms of some particular commodity.

The question of exchange-value ("quantitative worth") is therefore really a twofold one: first, what is the cause of "quantitative worth"; and second, how is this "worth" actually expressed, measured, in exchange?

If we look at society as a regularly reproduced set of social relations, it becomes very clear that the production and reproduction of the masses of useful objects which correspond to various social needs requires a definite, quantitative distribution of social labor. Each different useful product requires a concretely different type of labor; reproduction of the material basis of the society consequently requires the existence and reproduction of appropriate amounts of different concrete labors. That is to say, social labor from the point of view of its capacity to produce different use-values is what Marx calls social labor in its role as ''concrete'' labor.10

A commodity, however, is more than a mere use-value; it is at the same time an exchange-value, an object possessing "quantitative worth." It follows from this that the very same social relations which endow use-values with the property of "quantitative worth," endow the labor which produces these use-values with the capacity to create "quantitative worth." From this point of view, all commodity producing labor is qualitatively alike and quantitatively comparable: it is what Marx calls "(commodity producing) social labor in its capacity as ''abstract'' labor." 11

Therefore, to the question on the cause of exchange-value, Marx’s answer is: abstract labor, i.e., <s>labor actually engaged in commodity production</s>, is the cause of exchange-value.12 Moreover, if we consider the production of a commodity from the point of view of the whole society, it becomes apparent that the commodity’s exchange-value represents the total amount of abstract labor-time socially necessary13 for its production, both directly (in the process of producing the commodity from its material inputs) and indirectly (in the process of producing the material inputs themselves, and the inputs of the inputs, and so on). Marx consequently refers to this total sum of abstract labor-time as the ''immanent measure'' of a commodity’s exchange-value, what he calls its "Value."14

The discerning reader will have noticed that I have capitalized the term Value. This is done in order to emphasize the distinctiveness of Marx’s use of the term, and especially to avoid confusing it with the term "value" in orthodox economics (where it generally refers to a price of some sort).

It should also be noted here that the Value of a commodity is the ''average'' amount of abstract labor-time required for its production. The total output of a particular commodity represents* the expenditure of a certain amount of abstract labor-time which under existing conditions is required for its production. In exchange, however, all commodities of a given type are treated alike; each commodity is merely "an average sample of its class,"15 and as such represents the average expenditure of abstract labor-time.16

In order to avoid confusion later on, I will distinguish between the ''sum of Values'' (the abstract labor-time required to produce the total social product**), the ''total Value'' of a given branch of production (the Value of its total output),’" and the ''unit Value'' of a single commodity (the average Value in the sense defined above). All terms are defined over a given period of time.

=== 5. Money and Price ===
We turn now to the second aspect of exchange-value: how is "quantitative worth" actually expressed in exchange? To this Marx answers: in exchange, the "quantitative worth" of a commodity ''must'' take the form of money-price. Since exchange is the interchange of two commodities, at first glance it seems obvious that there are as many measures of a commodity’s worth as there are other commodities to measure it by. And historically, where exchange is sporadic or irregular, this is in fact true. But as exchange spreads and develops, this variety of different possible measures increasingly becomes a barrier to the smooth functioning of the process; without a point of reference, the direct comparison of every commodity with every other becomes impossibly complex. Consequently it becomes increasingly necessary to socially recognize a given commodity out of those available as the one commodity in which all others are to express their "worth"; this special commodity therefore becomes the universal equivalent, the money-commodity. We will henceforth assume it is gold.*

Notice that money does not by itself cause commodities to have "worth," any more than gram-weights cause stones to have weight. On the contrary, it is only because both gold and the other commodities have "quantitative worth" (exchange-value) in the first place that we can express their worth of commodities in terms of gold. The money-price of a commodity is the "golden" reflection, the external measure, of its exchange-value. It is what Marx calls the ''form'' taken by Value during exchange.18

=== 6. Production and Circulation ===
The foregoing analysis has focused on the difference between Value and money-price. Implicit in this distinction, however, is another equally important one: the Marxian distinction between the production of commodities and their circulation.

Production, Marx notes, is the creation or transformation of a use-value.19 Insofar as the product is a commodity, it belongs to some individual; it enters circulation, therefore, as private property.

Consider the case of two commodity producers, a fisherman and a hunter. They bring definite quantities of fish and game, respectively, to the market for the purpose of exchange; commodities with definite Values representing definite quantities of abstract labor-time thus enter the market-place.

Now what happens in exchange? In the exchange process the two commodity producers negotiate terms under which they will ''transfer the titles'' to their respective commodity property.20 But note: the time they spend bargaining over these terms of trade will in no way increase the total amount of fish or game to be had; it will determine only the final pattern of distribution.21 In fact, insofar as they need to subsist during the actual process of exchange itself, their<blockquote>costs of circulation, costs of exchange, could appear only as a deduction from the total production and value-creation of both of them. If they commissioned a third [person to perform] these exchanges, and thus lost no labour time directly, then each of them would have to cede a proportional share of his product to [that third person]...

Circulation costs as such, i.e. consumption of labour time or of objectified labour time, of values, in connection with the operation of exchange..., are therefore a deduction either from the time employed on production, or from the values posited by production. ''They can never increase the value''. They belong among... the inherent costs of production resting on capital. (Marx, ''Grundrisse'', Notebook VI, pp. 632-633. Emphasis added) </blockquote>This is a very important point in Marx’s analysis. The circulation process is the process whereby commodities change hands, where their titles of ownership are transferred. As such, no commodities and hence ''no Value is created in the circulation process''.22 If anything, part of the previously produced mass of commodities (and hence the Value previously created in production) may be used up just in the struggle over its distribution.

One immediate implication of this is that the categories of circulation are thereby limited by those of production.* Value is created in production, materialized in commodities; ''regardless of the actual money prices at which these commodities are sold'', only the same mass of commodities (and hence the same amount of Value) exists after the sales as before. Different price relations will therefore give rise to different distributions of the total commodity-product, and of the total sum of Values, but they cannot by themselves change these totals. It is on this basis that Marx argues: <blockquote>If commodities are sold at their values, then the magnitude of value in the hands of the buyer and seller remains unchanged. Only the form of existence of value is changed. If the commodities are not sold at their values, then the sum of converted values remains unchanged; the plus on one side is a minus on the other. (Marx, ''Capital'', Volume II, Ch. VI, Section 1.1, p. 129) </blockquote>

=== 7. The Importance of Prices ===
In commodity producing societies the object of production is not direct use, but personal gain through exchange. Individuals produce without any apparent social regulation. Nonetheless, they too exist within a social structure. For each individual to be able to specialize in producing for exchange, others must do so too; for exchange to proceed without rupture, the various products must correspond to the various social needs. Since under this form of social organization the correspondence between the various social needs and the distribution of social labor required to satisfy these needs cannot be brought about directly, it must be done indirectly. What in other societies is a direct evaluation of the importance of a particular type of labor in terms of its concrete product, becomes in commodity producing societies the indirect evaluation of this labor—through the "quantitative worth" of its product. It is only in exchange that the true social nature of commodity production is made apparent; and precisely because commodity production is undertaken for personal gain, for the money which is to be made, ''it is the money-prices of commodities that serve as the immediate regulating mechanism of the system''. Far from being a "veil," money constitutes a very important feedback mechanism.

It follows from the above that the laws which determine money magnitudes such as prices, profits, and wages, are of the utmost importance in understanding the laws of motion in capitalism.*

Now of course it was known well before Marx’s time that supply and demand were the immediate determinants of actual market phenomena. But even classical political economy was aware that over the course of time the ceaselessly fluctuating interplay of supply and demand was itself regulated by a much more fundamental principle: the Law of Equal Profitability.

For instance, if as a result of market conditions a particular sector’s rate of profit rose above the average rate, then the flow of capital would tend to be biased towards that sector, causing it to grow more rapidly than demand, and driving down its market price to a level consistent with average profitability. Conversely, the sectors with low profitability would tend to grow less rapidly than demand, causing their prices and profitability to rise.

The classical economists were thus able to demonstrate that behind the continuously varying constellation of market prices there lay another set of prices, acting as "centers of gravity" of market prices and embodying more or less equal rates of profit. The name given to these regulating prices in classical political economy was natural prices; Marx calls them prices of production. Their discovery was the first great law of prices.

By David Ricardo's time, the problem had moved on to a higher level. What Ricardo sought to do, for instance, was to go one step further and look behind prices of production themselves, to discover ''their'' "centers of gravity." That is, just as the market price of a commodity was shown to be regulated by its price of production, Ricardo sought to show that this regulating price was itself subject to a hidden regulator—the total quantity of labor time required to produce the commodity, both in its direct production and in the production of its means of production. <blockquote>In speaking... of the exchangeable value of commodities, or the power of purchasing possessed by any one commodity, I mean always that power which... is natural price. (D. Ricardo, 1962, p.92)

The great cause of the variation in the relative value of commodities is the increase or diminution in the quantity of labour required to produce them. (''Ibid''., p. 36) </blockquote>There we have it: the ''great'' cause of the variations in the (relative) price of production of a commodity is the variations in the total labor time that goes, directly or indirectly, into its production. The total quantity of labor time was the center of gravity of the commodity’s price of production, just as this price of production was itself the center of gravity of its market price. This was Ricardo’s attempt to formulate a second great law of prices.

What Ricardo perceived was that there was an intrinsic connection between the "quantitative worth," the exchange-value, of commodities, and the total labor-time required for their production.24 This, according to Marx, was Ricardo’s great scientific merit.25 But at the same time Ricardo was trapped by the conceptual framework of bourgeois political economy, which saw all production as being alike. He was consequently unable to distinguish concrete labor, an aspect of all social production, from abstract labor, an aspect which only commodity producing labor takes on. Ricardo therefore misses the difference between Value and the form of Value. Instead of recognizing price as the manner in which the exchange process reflects Value, and developing the various intermediary links between the two, he attempts instead to fuse them together through his law of prices. His failure to adequately distinguish between Value and price is, according to Marx, the first great source of error in his analysis.26

In addition to that, however, there is another problem. How can Ricardo attempt to analyze the effects of a uniform rate of profit on prices, asks Marx, when he nowhere discusses what determines the ''level'' of this rate of profit? And this in turn leads to an even more basic question. A uniform rate of profit is simply a way of saying that profits on different capitals are proportional to the size of these capitals: that is, each capital gets a share of total profit in proportion to its own size. But Ricardo nowhere discusses what determines aggregate profit in the first place. How then can he attempt to isolate the factors which regulate the movements of prices of production when he is missing a crucial ingredient—profit?

It is therefore apparent to Marx that even given the relation between Value and money price which he himself derives,27 the specific manner in which Value regulates price cannot be developed without first showing how profit arises. And this, as we shall see next, leads Marx to the concept of surplus-Value.

== III. Surplus-Value and Profit ==

=== 1. The Circulation of Money and the Circulation of Capital ===
We have up to now focused on the relationship of the circulation of commodities to their production; on the basis of this we were able to derive the categories of Value, money, and price, and discuss their mutual interrelationship. But the very existence of the circulation of commodities within a capitalist mode of production immediately implies that, for those who function as capitalists, the process of circulation is itself a means to realizing a profit: where then does the profit of the capitalist class as a ''whole'' come from?

Marx begins by noting that once we consider commodity production within the context of capitalist production, the overall process of circulation is in reality two different processes with different functions and hence different laws. In the first process, the owners of commodities (<math display="inline">CC</math>) exchange them for money (<math display="inline">M</math>) in order to be able to use this money to buy other commodities (<math display="inline">CC</math>) for the purpose of consumption.* This circuit in the overall circulation process therefore has the form <math display="inline">CC \rightarrow M \rightarrow CC</math>, and is the aggregate of the exchanges of one set of commodities for what is, under the existing conditions of exchange, an equivalent set. In this process money is an intermediary between two sets of commodities; once acquired it is spent, and for the individuals involved in it, the process terminates in consumption. Marx calls this "selling in order to buy";28 in it, money functions as money only.

In the second circuit, however, the owners of money (<math display="inline">M</math>) exchange it for commodities (<math display="inline">CC</math>) in order to get more money (<math display="inline">M' = M + \Delta M</math>), i.e., in order to make a profit <math display="inline">\Delta M</math>. Money here is not spent, it is merely ''advanced'' in order to make more money, through the intervention of commodities. The process of <math display="inline">M \rightarrow CC \rightarrow M'</math>, tends to be self-perpetuating, since it can always lead into <math display="inline">M' \rightarrow CC \rightarrow M''</math>, etc. The initiators of this process function as capitalists: <math>M \rightarrow CC \rightarrow M'</math> "is therefore in reality the general formula of capital as it appears ''prima facie'' within the sphere of circulation."29 Marx calls this second process "buying in order to sell";30 in it, money functions as ''capital''. It makes a profit. But how is it possible to make money by merely advancing money?

=== 2. Surplus-Value ===
The first step in the solution to the problem of profit is to recognize that it is not simply a question of money. Money, after all, represents a command over actual commodities, and hence over the actual labor-time materialized in them. If therefore in the circuit <math display="inline">M \rightarrow CC \rightarrow M + \Delta M </math>, the profit of the capitalist class (<math display="inline">\Delta M </math>) is to be something more than a monetary illusion, if it is to represent a potential increment in their real wealth, then ''their money profit <math display="inline">\Delta M </math> must itself be matched by an actual increment in the commodities available, and hence in materialized labor-time''. That is, <math display="inline">\Delta M </math> must be matched by an increment in the total Value of the commodities represented by <math display="inline">CC </math>. This increment in Value necessary for any real profit, Marx calls surplus-Value.

=== 3. Constant Capital ===
Ostensibly, the process of the formation of capital, as represented by <math display="inline">M \rightarrow CC \rightarrow M'</math>, is a process occurring wholly within circulation. But Value is itself a result of production; it cannot be created in circulation, and hence neither can the necessary increment in Value, surplus-Value. Surplus-Value, if it is possible at all, can only arise from production. And indeed, if we examine <math display="inline">M \rightarrow CC \rightarrow M'</math> more carefully, we find that the first stage involves the purchase of human and nonhuman inputs required for production, whereas the final stage involves the sale of the outputs of production. The commodities purchased as inputs and the commodities sold as outputs are in fact not the same, and it is the intervention of ''production'' which distinguishes them. The formation of capital, which appears to exist solely within circulation, in reality encompasses a process of production; properly speaking, it should be represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, with the stage <math display="inline">CC ... P ... CC' </math> representing the effect of production. Not just production or even just commodity production but, as we shall see, capitalist commodity production.

Means of production and laborers combine in all production. But in commodity production, the means of production are themselves commodities, and as such represent, in their total Value, the quantity of abstract labor-time that was socially necessary for their own production. If we examine the process of production over a period of time sufficiently long so that even the most durable means of production are entirely used up, then it becomes clear that the Value of the means of production must become incorporated into the commodities produced over this period. The bodily forms of the means of production either wear out (as with machines) or are physically incorporated into the product (as with raw materials); but precisely because these means of production are socially necessary under existing conditions, the abstract labor-time represented by them is also (indirectly) socially necessary for the production of the commodities. It is a necessary component of the total Value of the product. From the point of view of Value, therefore, the means of production only contribute as much Value as they actually contain. As such they cannot be the source of the increment in Value upon which any nonillusory aggregate profit must be based; Marx therefore calls the capital advanced in the form of the means of production "constant capital."

=== 4. The Value of Labor-Power ===
The formation of capital, the process represented by <math display="inline">M \rightarrow CC ... P ... CC' \rightarrow M' </math>, presupposes not just commodity production but capitalist commodity production. And under capitalist commodity production, not only are the products of labor bought and sold as commodities, but so too is the very capacity-to-labor itself.

This capacity-to-labor, which Marx calls labor-power, is "the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description."31 In all societies, it is the basis of the productive activities of human beings; but for this fundamental human property to become a thing to be bought and sold, a commodity, it must exist within a specific social context. Not only must the laborer have the legal title to his labor-power, he must also be obliged to sell it and not other commodities. He must be free not only to dispose of his own labor-power as a commodity, but also "free" of the means of production which might enable him to be a producer of other commodities. He must be a wage-laborer.

The Value of the commodity labor-power, like that of every other commodity, is determined by the abstract labor-time socially necessary for its production under existing conditions. Since labor-power is a capacity of living beings, its production implies their continued maintenance and reproduction; hence it implies a given quantity of commodities as means of subsistence, sufficient not only to maintain laborers in their normal state as laborers but also sufficient to support their families so that they may as a class continue to perpetuate themselves.* The Value of the means of subsistence of the total workforce is therefore the abstract labor-time socially necessary for their maintenance and reproduction, and hence is the measure of the Value of their labor-power (<math display="inline">V</math>).

When a capitalist purchases the commodity labor-power, he purchases the capacity-to-labor of workers, and in order to utilize this commodity he must extract as much labor-time from these workers as he can. The concrete functions that workers perform in their productive activities involves the transformation of the means of production into specific commodities; as such, the time spent by workers in these activities is itself a quantity of socially necessary abstract labor-time (<math display="inline">L</math>), which is in effect incorporated into the commodities. From the social perspective of Value, therefore, workers add a quantity of Value (<math display="inline">L</math>) to the Value (<math display="inline">C</math>) contained in the means of production they use up.

=== 5. Surplus Labor-Time ===
Capitalist production begins with the commodities <math display="inline">CC</math>, means of production and labor-power; as commodities they represent a definite quantity of Value, <math display="inline">C+V</math>. In a period of time sufficiently long, the entire Value <math display="inline">C</math> of the means of production will be ''transferred'' to the product. On the other hand, the Value <math display="inline">V</math> of labor-power employed in this period is ''replaced'' with the Value added to <math display="inline">L</math> by workers in the form of the amount of labor-time they actually spend in production. Thus while the Value of the initial commodities is <math display="inline">C + V</math>, the Value of the final product is <math display="inline">C + L</math>. The formation of capital, which we have represented as <math display="inline">M \rightarrow CC ... P ... CC \rightarrow M + \Delta M </math>, can therefore also be represented by <math display="inline">M \rightarrow (C+V) ... P ... (C+L) \rightarrow M + \Delta M</math>. Clearly, ''surplus-Value, the Value increment <math display="inline">S =(C+L)=(C+V)=L-V</math> which is necessary to match the money increment <math display="inline">\Delta M</math> can arise if and only if the labor-time (<math display="inline">L</math>) put in by workers is greater than the labor-time (<math display="inline">V</math>) socially necessary for their reproduction''.

The same result can be derived differently. Imagine for a moment that at any given level of technology, workers in all branches of production work just long enough to produce the commodities necessary for the needs of the working class as a whole and to replace the means of production they use up in this process. Under these circumstances, no matter how "advanced" the technology, there can exist no social surplus, and hence no basis for capitalist profit. If, and only if, workers can and actually do work longer than the time necessary to maintain themselves and the means of production, will there arise a continuing social surplus; the time spent by workers in producing this surplus, their surplus labor-time, is therefore the real basis of capitalist profit. And of course since the necessary labor-time described above is none other than the aggregate value of labor-power <math display="inline">V</math>, the surplus labor-time is none other than aggregate surplus-Value <math display="inline">S</math>.32 Once again we see that surplus-Value is the "hidden basis" of any real capitalist profit.

None of this, by the way, implies that Marx intended the labor theory of value as a theory of property rights, ''à la'' Locke or even Proudhon. Marx’s goal was a scientific analysis of capitalism, not a mere moral critique.33

== IV. The Transformation from Direct Prices to Prices of Production ==

=== 1. Exchange at Values: Direct Prices ===
In the Marxist conception of exchange-as-the-circulation-of-commodities, the total labor-time materialized in commodities during their production is the basis for their exchange-value and money-price, while the surplus labor-time materialized in them is the basis of the capitalist profit to be realized from their sale. Without a proper understanding of the quantitative and qualitative relationships between the sphere of production and the sphere of circulation, of the ''limits'' imposed on circulation by production, the laws of circulation must remain a mystery. Neoclassical economics is a testament to this.

For Marx, it was absolutely critical that the dominance of production over circulation be properly understood. It is in production that capitalist wealth is created and expanded, and Value and surplus-Value are materialized in commodities. Circulation, as we have seen, is the process whereby the previously created use-values are transferred from one hand to another, by means of money-prices.

Two things follow from this. First of all, it is in circulation that the Value magnitudes take their money-forms: Value takes the form of money-price, surplus-Value the form of money-profit; and secondly, neither Value nor surplus-Value are created in circulation, precisely because in this process commodities are merely exchanged, not created. This means that regardless of the actual money-prices involved, there can be no ''real'' increase in capitalist wealth through circulation.

It is obvious that the most direct way to explore the production and expansion of capitalist wealth is to assume that exchange takes place in proportion to the Values of commodities, so that the money-price of every commodity is equal to its Value relative to the Value of the unit of money (say one ounce of gold). I will henceforth call prices so determined "''direct prices''."

When indeed the analysis is begun this way, as Marx does in Volumes I and II of ''Capital'', it becomes clear that none of the basic categories of capitalist circulation, the categories of capital and labor, money and price, and wages and profits, owe their existence to any ''deviations'' of relative prices from relative Values. <blockquote>The conversion of money into capital has to be explained on the basis of the laws that regulate the exchange of commodities, in such a way that the starting-point is the exchange of equivalents... the formation of capital must be possible even though the price and value of a commodity be the same; for its formation cannot be attributed to any deviation of the one from the other. If prices actually differ from values, we must, first of all, reduce the former to the latter, in other words, treat the difference as accidental in order that the phenomena may be observed in their purity, and our observations not be interfered with by disturbing circumstances that have nothing to do with the process in question. (''Capital'', Vol. I, Ch. V, p. 166, text and footnote 1.)</blockquote>

=== 2. The Conceptual Basis for Prices of Production ===
There is yet another reason for beginning with direct prices (exchange at values): the major ''systematic'' deviation of relative prices from relative Values arises when commodities exchange at “prices of production.” But prices of production are prices which reflect a general rate of profit; and a general rate of profit in turn presupposes the existence of profits. Prior to any question about the formation of a general rate, therefore, is the question about the source of profit.34 This question leads Marx to surplus labor-time and hence to surplus-Value, and once again the analysis comes to Value.

The path from Value back to price of production involves two major steps. First, one must examine and understand prices and profits in general; this was done through the analysis of the relationship of production to circulation, and of the relationship of Value to money. Second, since prices of production must reflect a general rate of profit, one is led to an analysis of the formation of this general rate out of the individual rates of profit in each sector of production. We turn to this now.

Let us recall that the general process for the formation of capital could be written as <math display="inline">M \rightarrow C+ V ... P ... C+L \rightarrow M'</math>, where M is the money price of commodity inputs into production: the means of production having the Value <math display="inline">C</math> and labor-power having the Value <math display="inline">V</math>. <math display="inline">M'</math>, on the other hand, is the money price of the commodity outputs of production; their total Value is <math display="inline">C + L</math>. By definition, <math display="inline">S=L-V</math>.

In money terms, the general money rate of profit is <math display="inline">r = (M' - M)/M</math>, the aggregate profit <math display="inline">M'- M</math> divided by the capital advanced <math display="inline">M </math>. In terms of Value, the general ''Value'' rate of profit is <math display="inline">\rho = S/(C+V)</math>, the aggregate surplus-Value <math display="inline">S </math> divided by <math display="inline">C+V</math>, the Value of the inputs. Obviously, if prices are proportional to Values, then the general money rate of profit must equal the general Value rate of profit: <math display="inline">r = \rho </math>.

We now consider two individual circuits of capital involving sectors of production I and J, as represented by <math>M_i \rightarrow (C_i+ V_i) ... P ... C_i + L_i \rightarrow M'_i </math>; and <math display="inline">M_j \rightarrow (C_j+ V_j) ... P ... C_j + L_j \rightarrow M'_j </math>, respectively. If prices are proportional to Values, then in each sector the sectoral Value and money rates of profit are the same. We need therefore deal only with the Value rates <math>\rho_i = S_i/(C_i+V_i)</math> and <math display="inline">\rho_j = S_j/(C_j+V_j)</math>.

The first question we must then ask is: are these two Value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> generally equal? For ''if'' they were, then at prices proportional to Values each sector would have the same money and value rates of profit, and no movement of prices would be necessary to equalize the individual rates of profit. To facilitate the answer, Marx rewrites each expression for the value rate of profit by dividing both the numerator and denominator of each fraction by the Value of labor-power V:

<math display="block">\rho_i = \frac{S_i}{V_i} \bigg| \frac{C_i+V_i}{V_i} \qquad \text{and} \qquad \rho_j = \frac{S_j}{V_j} \bigg| \frac{C_j+V_j}{V_j}</math>

Each Value rate of profit is therefore itself the ratio of two component ratios: <math display="inline">S/V</math>, which Marx calls the rate of surplus-Value, and <math display="inline">(C + V)/V</math>, which he calls the organic composition of capital. We will deal with each in turn.

==== ''A. The Equality of Rates of Surplus-Value'' ====
For society as a whole in any given period, the productive activities of workers may be viewed as a certain aggregate quantity of labor-time <math display="inline">L</math>. But the very fact that the concrete labor-times of different workers can be added together requires that they have already in some way been made qualitatively equal, that they have been reduced to quantities of some ''general'' social labor-time, what Marx calls "abstract" labor-time. This reduction of concrete labor-times to abstract labor-time is of course a consequence of generalized commodity production, as discussed in the section on Value (II.4); for our purposes, what is important in this is that it implies that the labor-time of each worker represents a definite quantity of abstract labor-time.35

Of the aggregate labor-time <math display="inline">L</math>, a certain portion <math display="inline">V</math> represents the time socially necessary for the production of the means of subsistence of the working class, and the remainder <math display="inline">S</math>, the aggregate surplus labor-time, constitutes the surplus-Value materialized in commodities during their production. If the working day is the same in all branches of production, then each worker adds the same amount of Value to the product, in a given time period (like a day). If the wage rate for a given type of work is the same in all branches, then each worker can purchase the same share of the aggregate means of subsistence; a uniform wage thus represents a given quantity of (abstract) labor-time (say 4 hours a day) which each worker must put in to reproduce the Value of his or her labor-power. Clearly, if the length of the working day (say 10 hours) is indeed the same in all branches, each worker will work the same amount of surplus labor-time (6 hours a day). That is, in each sector, the rates of surplus-Value will necessarily be equal. These rates, therefore, cannot be the source of any differences between the Value rates of profit <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math>.

==== ''B. The Inequality of Organic Compositions of Capital'' ====
The above results imply that in any one sector, say sector J, <math display="inline">V</math> is an index of the total quantity of labor-time <math display="inline">L</math> worked in that sector, since any one hour of abstract labor-time requires the fraction <math display="inline">v</math> for its reproduction: <math display="inline">V = vL</math>. The quantity <math display="inline">C</math>, the value of the means of production in this sector, is, on the other hand, an index of the specific types and quantities of commodities which enter into this process of production as means of production. In general, therefore, unless each sector employs the same types of commodities and labor-powers in the same proportions as every other sector, the ratios <math display="inline">C_i/L_i</math>; and <math display="inline">C_j/L_j</math> will differ. Since <math display="inline">V_i</math>; and <math display="inline">V_j</math> are indexes of <math display="inline">L_i</math> and <math>L_j</math>, in general the organic compositions <math display="inline">(C_i +V_i)/V_i</math>; and <math display="inline">(C_j + V_j)/V_j </math> will differ.

To reiterate Marx’s conclusion: in general, the sectoral rates of surplus-value will be equal, but the organic compositions of capital will not. Hence in general the value rates of profit will differ from sector to sector.

==== ''C. The Deviation of Prices of Production from Direct Prices'' ====
Let us now return to the two circuits of capital <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math display="inline">M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>. We began earlier by noting that ''if'' prices were proportional to Values, the money rates of profit <math display="inline">r_i = (M'_i - M_i) / M_i </math> and <math display="inline">r_j = (M'_j - M_j) / M_j </math> would be equal to the corresponding Value rates of profit <math display="inline">\rho_i = S_i/(C_i + V_i)</math> and <math display="inline">\rho_j = S_j/(C_j + V_j)</math>. If in addition the Value rates of profit were themselves equal to each other, then at direct prices, capital in each circuit would realize the same ''money'' rate of profit and no movement of prices would be necessary to bring these money rates into line with the general rate.

We have just seen, however, that in general the sectoral rates will differ; if for instance <math display="inline">\rho_i</math> was greater than <math display="inline">\rho_j</math>, the capital invested in sector <math display="inline">I</math> would, with prices proportional to Values, earn a higher money rate of profit than would capital invested in industry <math display="inline">J </math> (<math display="inline">r_i = \rho_i > r_j = \rho_j </math>). ''To equalize these money rates, therefore, relative prices would have to deviate from relative values'' in such a way as to lower <math display="inline">M'_i</math> relative to <math display="inline">M_i</math> and to raise <math display="inline">M'_j</math> relative to <math display="inline">M_j</math>, for only in this way would the higher money rate of profit <math display="inline">r_i</math> be reduced and the lower money rate <math display="inline">r_j</math> be raised.

In any sector <math display="inline">K</math>, <math display="inline">M'_k</math>, represents the money price of the commodities produced, what I called earlier the sector’s total price; <math display="inline">M_k</math>, on the other hand, is the money price of the sector’s commodity inputs (means of production and labor-power), what Marx calls its (money) cost-price. Since both the total price <math display="inline">M'_k</math> and the cost-price <math display="inline">M_k</math>, are in essence determined by the prices of commodities, any movements of relative prices, including the ones under consideration here, will in general change both <math display="inline">M'_k</math>, and <math display="inline">M_k</math>: the overall price movements necessary for the formation of a general rate can therefore be quite complicated, as Sraffa has so elegantly demonstrated.36

Nonetheless, beginning from prices proportional to Values, for any sector <math display="inline">I</math> whose Value rate of profit <math display="inline">\rho_i</math> is higher than the average Value rate <math display="inline">\rho</math>, its total price <math display="inline">M'_i</math> must fall relative to its cost-price <math display="inline">M_i</math>, in order to bring its money rate of profit <math display="inline">r_i</math> into line with the general money rate <math display="inline">r </math>. The opposite movement must take place for a Sector <math display="inline">J</math> whose Value rate of profit <math display="inline">\rho_j</math> is lower than the average Value rate <math display="inline">\rho</math>.

Since the differences in the value rates <math display="inline">\rho_i</math> and <math display="inline">\rho_j</math> upon which these price movements are predicated are themselves a consequence of the differences between sectoral organic compositions of capital, one may equally well say that, beginning from prices proportional to Values, a sector’s total price must fall (or rise) relative to its money cost-price according to whether its organic composition of capital is lower (or higher) than the social average, if its particular money rate of profit is to conform to the general rate.

It does not follow from the above, however, that the general ''money'' rate of profit will continue to equal the general ''Value'' rate of profit, once prices deviate from a strict proportionality with Values. To see why, let us recall that <math display="inline">M'</math>, the aggregate price of commodities, is the total price of the commodities which form the social product. On the other hand, the aggregate cost-price <math display="inline">M</math> is the total price of the commodities, the means of production and the labor-power, which form the inputs into the aggregate process of production. Since the price of labor-power is determined by the price of its means of subsistence the aggregate cost-price <math display="inline">M</math> is in effect the total price of the means of production and the means of subsistence.

Suppose the social product was 100 bushels corn and 100 tons iron. <math display="inline">M'</math> would be its total price. In general, the aggregate means of production and means of subsistence will also consist of quantities of one or both of these commodities, say 80 bushels corn and 60 tons iron. <math display="inline">M</math> would then be their total price. Because these two aggregate "bundles" of commodities will generally differ in their proportions of corn to iron, as is true of the case illustrated above, any movement in the price of corn relative to iron will affect them unequally. Hence ''any'' movement of relative prices will in general change the ratio <math display="inline">M'/M</math> or equivalently, the general rate of profit <math display="inline">r = [(M'-M)/M] = [(M'/M)-1] </math>.

The quantity <math display="inline">M'</math> is of course the sum of prices, while the quantity <math display="inline">\Delta M = M' - M </math> is aggregate money profit. The above result may therefore be stated in an equivalent form: in general, ''any deviations of relative prices from relative Values, including but not only'' those which arise from the formation of a general money rate of profit, ''will make it impossible for both the sum of money prices <math display="inline">M'</math> and the sum of money profits <math display="inline">\Delta M</math> to remain strictly proportional to the sum of Values'' <math display="inline">C + L</math> ''and the sum of surplus-Values'' <math display="inline">S</math>'', respectively''. This result is well known in the debate about the so-called transformation problem; but as it is stated above, it arises in a broader context. In any case, in order to discern its real content, we must examine matters a bit more carefully.

=== 3. Some General Effects of Price-Value Disproportionality ===
In much of the literature on the "transformation problem," there is a great confusion between Values, prices proportional to Values (what I call direct prices), and prices of production. In particular, since direct prices are so simply related to Values, the general issue of the differences between price and Value, and profit and surplus-Value, tends to be taken up only when we turn to prices of production. All of a sudden, we are confronted with the impossibility of a simple proportionality between Value magnitudes and their money-forms, and it begins to seem as if the analysis of Value is something quite separate from the analysis of price. 37

For this reason, I have attempted throughout this paper to carefully distinguish between Value, which stems from production, and money-price, which is the form taken by Value in circulation. With this distinction in hand, it is possible to see that money-magnitudes are ''always'' different, both qualitatively and quantitatively, from Value magnitudes. Marx notes, for instance, that precisely because the form of Value is not the same thing as Value, the determination of money-price is a ''complex combination'' of its Value elements.

Consider the simplest case, that of direct prices. Suppose the Value of a gold coin weighing 1/4 ounce (which we call a “£”)* is 1/2 worker-hour, while that of a bushel of wheat is 100 worker-hours. The direct price of wheat will then be £200. Even right here, Value (100 hours) and price (£200) are both qualitatively and quantitatively different (though related) magnitudes, with different units.

Now suppose the Value of wheat falls by half, to 50 worker-hours. How will this be reflected in its direct price? Well, says Marx, that depends; if the Value of gold also fell by a half, the money-price of wheat would remain constant at £200; if the Value of gold fell by more than a half, the money-price of wheat would rise even though its Value fell!38 Even in this simple case, therefore, the laws which determine the money-form of Value are more complex than those which determine Value itself. But this is hardly an analytical defect; on the contrary, it is the whole point of theoretical analysis to be able to derive more complex categories from basic ones.

If indeed price and Value are always distinct, what exactly is the “transformation” issue about? Clearly, it is about a ''transformation in the form-of-Value''; it is a transformation from the direct expression of Value (direct prices) o a more complex expression (prices of production). What we have to do, therefore, is to see what is altered by this change in form, and what is not.

We begin by noting that what we are considering here is a ''pure'' change of form. For instance, in the traditional formulation of the transformation we analyze a capitalist society in a simple or extended reproduction, first when exchange is ruled by direct prices, and then when it is ruled by prices of production.** In both cases, the composition and distribution of the use-values is the same: the same mass of commodities is circulated in either case, with the same physical composition of means of subsistence and surplus-product. Thus the same total commodity Value, the same aggregate Value of labor-power, and the same aggregate surplus-Value, is circulated by the two different price-forms. From the point of view of the system as a whole, the transformation leads to no real change; all that changes is the manner in which given production relations are manifested in circulation.

From the point of view of individual capitals, however, the situation is indeed different. With direct prices, each capitalist realizes an amount of money profit proportional to the surplus-Value contained in the commodities he sells. With prices of production, each sector’s money profit is no longer proportional to its surplus-Value; since the sum of Values (and hence the total surplus-Value) circulated is still the same as before, the above change of form has the effect of redistributing surplus-Value from one sphere of production to another. <blockquote>The fact that prices diverge from [proportionality with] values cannot, however, exert any influence on the movements of social capital. On the whole, there is the same exchange of products, although the individual capitalists are involved in value-relations no longer proportional to their respective advances and to the quantities of surplus-value produced singly by everyone of them. (Marx, ''Capital'', Volume II, Ch. XX, Section 1, p. 393)

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (Marx, ''Capital'', Volume II, Ch. II, p. 43) </blockquote>What has been said above in fact applies to any set of prices which differ from direct prices, not just to prices of production. What it shows is that there are limits to the effects of different forms of Value, and that these limits arise precisely in the Value magnitudes whose distribution is brought about through these money-forms.

It does not follow from this, however, that the determination of money-prices is of no consequence. Different forms of Value have different ''real'' effects on individual capitals, and these in turn have different implications for the dynamic process of accumulation and reproduction. It is through the actual movements of money-prices that the system is regulated; as such, the analysis of prices of production (which act as centers of gravity of market prices), and of their relation to Values, is of the utmost importance to concrete analysis. The first step (which in most discussions of the “transformation problem” is the ''only'' step) along this path is the derivation of prices of production from direct prices.

=== 4. The Calculation of Prices of Production ===
In general, we may characterize any two circuits of capital as <math display="inline">M_i \rightarrow (C_i + V_i) ... P_i ... (C_i + L_i) \rightarrow M'_i </math> and <math>M_j \rightarrow (C_j + V_j) ... P_j ... (C_j + L_j) \rightarrow M'_j </math>.

When exchange is at Values, the money rate of profit in each circuit will equal the Value rate of profit in that circuit. Since Value rates will in general differ from sector to sector, owing to differences in their organic compositions of capital, exchange at Values will imply unequal rates of profit in different sectors, and hence in different circuits of capital.

It follows from the above that the formation of a general rate of profit out of the various individual rates of profit will require that for a sector with a Value rate of profit higher than the social average, the money price of its product <math display="inline">M'_i </math> must fall relative to its money cost-price <math display="inline">M_i </math>, since only this movement will lower its money rate of profit <math display="inline">r_i </math>. As we saw earlier in section III.2.C, this ''must'' hold regardless of how complicated the effects of the formation of a general rate of profit on the overall pattern of prices. And as we shall see immediately, ''it is precisely this movement which is captured by Marx’s own transformation procedure''.

==== ''A. Marx's Transformation Procedure'' ====
{| class="wikitable"
|+Table 1 / Exchange at Values
!
!Constant Capital (MCi)
!Variable Capital (MVi)
!Cost-price (Mi)
!Value of Means of Prod. (Ci)
!Value of Labor-Power (Vi)
!Surplus Value (Si)
!Total Value (Wi)
!Value Rate of Profit % (Pi)
!Total Price (M'i)
!Total Profit (ΔMi)
|-
|(Means of PProduction)
|450
|180
|630
|225
|90
|60
|375
|19.05
|750
|120
|-
|(Means of Subsistence)
|200
|240
|440
|100
|120
|80
|300
|36.36
|600
|160
|-
|(Capitalist Consumption)
|100
|180
|280
|50
|90
|60
|200
|42.85
|400
|120
|-
|
|£750
|£600
|£1350
|375
|300
|200
|875
|
|£1750
|£400
|}
{| class="wikitable"
|+Table 2 / Max's Transformation
!Dept.
!MCi
!MVi
!Mi
!Ci
!Vi
!Si
!Wi
!Mi'
!ΔMi
!ri
|-
|I
|450
|180
|630
|225
|90
|60
|375
|816.67
|186.67
|29.63
|-
|II
|200
|240
|440
|100
|120
|80
|300
|570.37
|130.37
|29.63
|-
|III
|100
|180
|280
|50
|90
|60
|200
|362.96
|82.96
|29.63
|-
|
|£750
|£600
|£1350
|375
|300
|200
|875
|£1750
|£400
|
|}

==== ''B. The "Correct" Prices of Production'' ====

==== ''C. Marx's Transformation Procedure Extended'' ====

== V. Some further considerations ==

== VI. Conclusions ==

== Mathematical Appendix ==
Lack of space makes it impossible to include the mathematical appendix to this reading. However, [https://drive.google.com/drive/folders/1-DuRWVD2ozMQteyJo_cENqZOYalUXJsJ a copy of the appendix] is available on request from the author of this reading.

== References ==

# L. Althusser and E. Balibar, ''Reading Capital'', translated from the French by Ben Brewster, Pantheon Books, (New York: Random House), 1970.
# W. Baumol, “The Transformation of Values: What Marx ‘Really’ Meant (An Interpretation), ''Journal of Economic Literature'', March 1974, Vol. XII, No. 1.
# A. Emmanuel, ''Unequal Exchange: A Study of the Imperialism of Trade'' (New York: Monthly Review Press), 1972.
# T. Kuhn, ''The Structure of Scientific Revolutions'' (Chicago: University of Chicago Press), 1970.
# E.Mandel, “Value, Surplus Value, Profit, Prices of Production and Surplus Capital—A Reply to Geoff Hodgson,” ''International Socialist Review'', Vol. 2, No. 1, Spring 1973.
# K. Lancaster, ''Mathematical Economics'' (New York: The Macmillan Company), 1968.
# Karl Marx, ''A Contribution to the Critique of Political Economy'', with an Introduction by Maurice Dobb (New York: International Publishers), 1970.
# —, ''Theory of Surplus Value: Volume IV of Capital'' (Moscow: Progress Publishers), Part I, 1969; Part II, 1968; Part III, 1971.
# —, ''Capital'', Volumes I-III (New York: International Publishers), 1967.
# —, “Comments on Adolph Wagner’s ‘Lehrbuch der politischen Okonomie’, 1879/80,” published as ''Karl Marx on Value'', British and Irish Communist Organization, Belfast, 1971.
# A. Medio, “Profits and Surplus-Value: Appearance and Reality in Capitalist Production,” published in ''A Critique of Economic Theory'', edited by E. K. Hunt and Jesse G. Schwartz (London: Penguin Books), 1972.
# R. Meek, ''Economics and Ideology and Other Essays'' (London: Chapman and Hall), 1967.
# M. Morishima and F. Seton, “Aggregation in Leontief Matrices and the Labour Theory of Value,” ''Econometrica'', Vol. 29, 2 (April 1961), pp. 203-220.
# M. Morishima, ''Marx's Economics'' (Cambridge: Cambridge University Press), 1973
# J. Robinson, ''An Essay on Marxian Economics'', Second Edition (London: Macmillan; New York: St. Martin’s Press), 1969.
# B. Rowthorn, "Skilled Labour in the Marxist System," ''Bulletin of the Conference of Socialist Economists'', Spring 1974, pp. 25-45.
# P. A. Samuelson, "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, Vol. IX, No. 2, pp- 399-431.
# F. Seton, “The ‘Transformation Problem’,” ''Review of Economic Studies'', June 1957, 25, pp. 149-160.
# A. Shaikh, ''Theories of Value and Theories of Distribution'', Columbia University Ph.D., 1973 (unpublished).
# P. Sraffa, ''Production of Commodities by Means of Commodities'' (Cambridge: Cambridge University Press), 1960.
# P. M. Sweezy, ''The Theory of Capitalist Development'' (New York: Monthly Review Press), 1964.

== Endnotes ==

== Footnotes ==

== Comments ==
[[Category:Works by Anwar Shaikh]]

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-14T01:35:46Z

Ismael:

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-13T23:43:07Z

Ismael: Category added

Library:Marx's Theory of Value and the "Transformation Problem"

2025-01-13T23:41:21Z

Ismael: In process of transcription

Joseph Stalin

2025-01-09T20:39:36Z

Ismael: Removed the source claiming that the CIA secretly believed that Stalin wasn't a dictator. A critical analysis of that source may be found on here https://www.youtube.com/watch?v=mWnm6YNCexg

{{Message box/Missing Sources}}{{Infobox revolutionary
| name = Josef Stalin
| native_name = Иосиф Сталин იოსებ სტალინი
| image = File:Iosif_Stalin.jpg
| image_size = 225px
| caption = Portrait of comrade Stalin
| nationality = Georgian
|political_party=[[Communist Party of the Soviet Union]]| birth_name = Ioseb Besarionis dze Jugashvili
| birth_date = {{Birth date|1878|12|21}}
| birth_place = Gori, Tiflis Governorate, Russian Empire (present-day [[Georgia (country)|Georgia]])
| death_date = {{Death date and age|1953|3|5|1878|12|18}}
| death_place = Moscow, [[Russian Soviet Federative Socialist Republic|Russian SFSR]], [[Soviet Union]]
| death_cause = Cerebral hemorrhage
| political_line = [[Marxism–Leninism]]
}}
'''Iósif Vissariónovich Dzhugashvili''' (21 December 1878 – 5 March 1953), better known as '''Joseph Stalin''', was a Georgian [[Marxism–Leninism|Marxist–Leninist]] revolutionary, political theorist, and the elected<ref name=":1">{{Citation|author=Marx-Engels-Lenin Institute|year=1949|title=Joseph Stalin: a political biography|page=34, 48|quote=After the conference, in May 1917, a Political Bureau of the Central Committee was instituted, to which Stalin was elected and to which he has been successively re-elected ever since.
[...]
On Lenin's motion, the Plenum of the Central Committee, on April 3, 1922, elected Stalin, Lenin's faithful disciple and associate, General Secretary of the Central Committee, a post at which he has remained ever since.|lg=https://libgen.rs/book/index.php?md5=26C959185500A43A5CFF3947ECEF2FCB}}</ref> leader of the [[Union of Soviet Socialist Republics (1922–1991)|Soviet Union]] from 3 April 1922 to 16 October 1952, serving several terms as the [[General Secretary of the Communist Party of the Soviet Union]] during that time.

Stalin oversaw the great period of [[collectivization|collectivisation]] and industrialisation which transformed the USSR from an illiterate rural backwater to a [[Socialism|socialist]] superpower by the late-1930s and early-1940s. Under Stalin's leadership, the USSR played a principal role in the defeat of [[German Reich (1933–1945)|Nazi Germany]] and [[Empire of Japan (1868–1947)|Imperial Japan]] during [[Second World War|World War II]].

== Life and work ==

=== Early life (1878–1899) ===
[[File:StalinAtTiflisSeminary.jpg|thumb|Stalin in 1896 as a student at the Tiflis Seminary]]
Iósif Vissariónovich Dzhugashvili was born on 21 December, 1878<ref group="lower-alpha">Although some historians claim he was born in 18th December, his birthday was officially celebrated on 21st December.</ref> in Gori,<ref group="lower-alpha">The city of Gori was part of the Tiflis Governorate, which was one of the administrative divisions of the [[Russian Empire]].</ref> a city of the [[Russian Empire (1721–1917)|Russian Empire]], in the family of a craftsman, later a worker of a shoe factory. Like his parents, Stalin was an ethnic [[Georgia|Georgian]], and he grew up speaking the Georgian language. Both his father and his mother came from a family of serfs.<ref>{{Citation|author=Ian Grey|year=1979|title=Stalin, man of history|chapter=|section=|page=9|quote=Vissarion, his father, came from the village of Didi-Lilo, near Tiflis, where his parents, like their forebears, had been peasant serfs. For Vissarion emancipation meant that he was free to follow his trade as a cobbler. Around 1870 he moved to Gori, where in 1874 he married Ekaterina Georgievna Geladze, daughter of a serf family from a nearby village. She was about eighteen years of age, some five years younger than her husband. They were humble working people, poor and illiterate.|pdf=|city=|publisher=|isbn=|doi=|lg=http://libgen.rs/book/index.php?md5=A341F7377CB157DD7730A9A416CDC302|mia=|title-url=|chapter-url=|trans-title=|trans-lang=}}</ref>

Stalin's revolutionary activities can be traced to his time as a student after 1894, when he joined the Orthodox Theological Seminary in Tiflis.<ref>{{Citation|author=Marx-Engels-Lenin Institute|year=1949|title=Joseph Stalin: a political biography|page=5|quote=In the autumn of 1888 Stalin entered the church school in Gori, from which, in 1894, he passed to the Orthodox Theological Seminary in Tiflis.

This was a period when, with the development of industrial capitalism and the attendant growth of the working-class movement, Marxism had begun to spread widely throughout Russia. The St. Petersburg League of Struggle for the Emancipation of the Working Class, founded and led by Lenin, had given a powerful stimulus to the Social-Democratic movement all over the country.|lg=https://libgen.rs/book/index.php?md5=26C959185500A43A5CFF3947ECEF2FCB}}</ref><ref>{{Citation|year=1931|title=[[Library:Stalin interview with Emil Ludwig|Stalin interview with Emil Ludwig]]|quote=I joined the revolutionary movement at the age of fifteen, when I became connected with certain illegal groups of Russian Marxists in Transcaucasia. These groups exerted a great influence on me and instilled in me a taste for illegal Marxian literature.}}</ref> In 1896 and 1897, Stalin was a part of Marxist study groups in the seminary, and in August 1898, he formally joined the Tiflis branch of the Russian Social Democratic Labour Party (RSDLP) and began to conduct [[propaganda]] work among the workers in the Tiflis railway workshops. An avid reader, he read ''[[Capital, vol. I|Capital]]'' and the ''[[Manifesto of the communist party]]'', written by [[Marx|Karl Marx]], subsequently taking a profound interest in [[Marxism]]. At that time, he became acquainted with some of Lenin's articles criticizing the [[Narodniks]] and the "Legal Marxists".<ref>{{Citation|author=Marx-Engels-Lenin Institute|year=1945|title=Joseph Stalin: a short biography|page=5|quote=Jn 1896 and 1897, Stalin conducted Marxist study circles in the seminary, and in August 1898 he formally enrolled as a member of the Tiflis Branch of the Russian Social Democratic Labour Party. [...]

Stalin worked hard to broaden his knowledge. He studied Capital, the Communist Manifesto and other works of Marx and Engels. He acquainted himself with Lenin's polemical writings against Narodism, "Legal Marxism" and "Economism." His theoretical interests were extremely broad. He studied philosophy, political economy, history and natural science. He read widely in the classics. He thus trained himself to he an educated Marxist. Even at this early date Lenin's writings made a deep impression on him. "I must meet him at all costs," one of Stalin's friends. reports him to have said. after reading an article by Tulin (Lenin).|lg=https://libgen.rs/book/index.php?md5=034C4C1A4DBC437BC939DCF13A1D9EBD}}</ref> In 1899, Stalin was expelled from the seminary for the propaganda of Marxism, and he went to an illegal position and became a professional revolutionary.

=== Beginning of revolutionary activities (1900–1917) ===
Stalin played a central role in the revolutionary activities of the [[Bolsheviks]], a faction of the [[Russian Social Democratic Labor Party|Russian Social Democratic Labour Party]] (RSDLP) led by [[Vladimir Lenin]], before and during the [[Russian revolution of 1917|October Revolution]].[[File:Stalin1902Mugshot.jpg|thumb|Stalin's mugshot after being arrested in 1902]]
[[File:Stalin exile painting.png|thumb|Stalin in exile in Siberia]]
While organizing in the [[Caucasus]], Stalin exposed the [[Mensheviks]] as [[Liberalism|liberal]] [[Reformism|reformists]]. He met Lenin in person for the first time at a [[Communist Party of the Soviet Union|Bolshevik]] conference in Tampere, [[Grand Duchy of Finland (1809–1917)|Finland]] in 1905.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Mensheviks and the Bolsheviks in the Period of the Russo-Japanese War and the First Russian Revolution|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm}}</ref> In 1912, the party elected Stalin to the Central Committee even though he was in exile at the time.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Mensheviks and the Bolsheviks in the Period of the Stolypin Reaction. The Bolsheviks Constitute Themselves an Independent Marxist Party|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch04.htm}}</ref> In 1912, Stalin helped found the newspaper ''Pravda''.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Bolshevik Party during the New Rise of the Working Class Movement before the First Imperialist War|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch05.htm}}</ref>

After the [[February Revolution]], Stalin returned from exile in [[Siberia]]. He called for an overthrow of the [[Russian Republic (1917–1918)|provisional government]] and opposed the [[Imperialism|imperialist]] [[First World War]]. At a party conference in April 1917, he argued with [[Nikolai Bukharin|Bukharin]] and [[Georgy Pyatakov|Pyatakov]], who did not support the right of [[Nation|nations]] to [[self-determination]]. In September, Stalin opposed participating in the [[Bourgeoisie|bourgeois]] [[Provisional Council of the Russian Republic|Provisional Council]] and called for a revolution instead.

On 29 October 1917, the Central Committee elected Stalin as head of the Party Center to direct the [[Russian revolution of 1917|October Revolution]].<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Bolshevik Party in the Period of Preparation and Realization of the October Socialist Revolution|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch07.htm}}</ref>

=== Civil War (1918–1920) ===
In summer 1919, the Central Committee sent Stalin, [[Kliment Voroshilov|Voroshilov]], [[Sergo Orjonikidze|Orjonikidze]], and [[Semyon Budyonny|Budyonny]] to the southern front, where he organized an attack against [[Anton Denikin]] from the [[Donbass]]. The [[Workers' and Peasants' Red Army|Red Army]] defeated Denikin in October 1919 and liberated all of [[Ukrainian Soviet Socialist Republic (1919–1991)|Ukraine]] by early 1920.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=[[Library:History of the Communist Party of the Soviet Union#The Bolshevik party in the period of foreign military intervention and civil war (1918—1920)|The Bolshevik Party in the Period of Foreign Military Intervention and Civil War]]|chapter-url=|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch08.htm}}</ref>

=== Establishment of the USSR (1921–1924) ===
[[File:Stalin painting 1920s.png|thumb|270x270px|Painting of Stalin from the 1920s]]
After the defeat of the interventionists and the [[Russian Civil War|Civil War]], in transition to a peaceful economic construction, the anti-party groups led by [[Leon Trotsky|Trotsky]] launched a struggle against the party line developed by [[Vladimir Lenin|Lenin]].<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=[[Library:History of the Communist Party of the Soviet Union#The Bolshevik party in the period of transition to the peaceful work of economic restoration (1921—1925)|The Bolshevik party in the period of transition to the peaceful work of economic restoration]]|chapter-url=|quote=The small opposition groups—the Trotskyites, "Workers' Opposition," "Left Communists," "Democratic-Centralists," etc.—wavered and vacillated in face of the difficulties attending the transition to peaceful economic construction. There were in the Party quite a number of ex-members of the Menshevik, Socialist-Revolutionary, Bund and Borotbist parties, and all kinds of semi-nationalists from the border regions of Russia. Most of them allied themselves with one opposition group or another.
[...]
It was Trotsky who started the discussion and the fight against Lenin, against the Leninist majority of the Central Committee. With the intention of aggravating the situation, he came out at a meeting of Communist delegates to the Fifth All-Russian Trade Union Conference, held at the beginning of November 1920, with the dubious slogans of "tightening the screws" and "shaking up the trade unions." Trotsky demanded that the trade unions be immediately "governmentalized." He was against the use of persuasion in relations with the working class, and was in favour of introducing military methods in the trade unions. Trotsky was against any extension of democracy in the trade unions, against the principle of electing trade union bodies.|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch09.htm}}</ref> Stalin defended the [[Leninist]] line and fought against anti-party groups and factions ([[Trotskyism|Trotskyists]], "workers' opposition"). At the 10th Congress of the Party (1921) Stalin presented "The Report on the next tasks of the Party in the [[national question]]". After the 11th Party Congress (1922) the Plenum of the Party Central Committee elected Joseph Stalin as the Secretary General of the Central Committee.

Under the leadership of V. I. Lenin, the Party during this period carried out extensive work on the creation of the [[Union of Soviet Socialist Republics (1922–1991)|Union of Soviet Socialist Republics]]. Lenin believed that the USSR should be a voluntary union of equal and sovereign [[Soviet republic|union republics]]. On this question, Stalin at first took the wrong stand, putting forward the project of so-called "autonomization", i.e., the entry into the RSFSR of other Soviet republics on the rights of autonomous units. V. I. Lenin strongly opposed this proposal, criticized Stalin's mistakes in conducting the national policy, his partiality to the manifestations of great-power [[chauvinism]]. The Leninist principles were accepted by the Central Committee and formed the basis of the Union of Soviet Socialist Republics. The report on the formation of the Union of Soviet Socialist Republics (1922) was made at the 1st Congress of Soviets of the USSR by the order of the Central Committee of the RCP(b) by I.V. Stalin in view of Lenin's illness.

After Lenin's death, the Communist Party, under the leadership of the Central Committee, firmly and confidently led the Soviet people along the path of implementation of Lenin's precepts, on the path of building socialism. At this time, Stalin made a number of works that were of great importance in the protection and propaganda of Leninism and in the ideological defeat of the currents hostile to Leninism. In this respect, a great role was played by Stalin's work "On the Foundations of Leninism" (1924), which set forth the basic issues of Leninism and disclosed the new things that Lenin contributed to Marxism. The defense by I. V. Stalin, together with other leaders of the Party, of the Leninist theory of the possibility of the victory of socialism initially [[Socialism in one country|in one country]], and of the possibility of the victory of socialism in the USSR in the capitalist encirclement, was of particular importance in the struggle against the Trotskyists.{{Citation needed}}

=== 14th Party Congress (1925–1926) ===
Based on the instructions of V. Lenin, who developed a scientifically sound program for building socialism in the USSR, the party set a course for the [[socialist industrialization]] of the country. This line was set out in the political report of the Central Committee at the XIV Party Congress (1925), made by Stalin. The report emphasized that the essence of [[industrialization]] was the priority development of [[heavy industry]], and first of all the [[mechanical engineering]], the fundamental difference of socialist industrialization, which was inextricably linked with the improvement of the working people's material condition, from the capitalist one, which was held by means of colonial seizure, robbery and ruthless exploitation of the working people.

In early 1926 he published a book of Stalin "Toward Leninism", which was criticized opportunistic views of [[Grigory Zinoviev|Zinovievites]], who were descending to the ideological positions of Trotskyism and wanted wanted the Soviet Union to stay mostly [[Agriculture|agricultural]] and import its industry from [[Capitalism|capitalist]] countries.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Bolshevik Party in the Period of Transition to the Peaceful Work of Economic Restoration|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch09.htm}}</ref> At the 15th Party Conference (November 1926) Stalin made a report "On the Social Democratic bias in our party" and at the VII Extended Plenum of the Executive Committee of the Communist International (December 1926) with the report "About the Social Democratic bias in our party again". Both these reports played an important role in rallying the party ranks under the banner of Leninist ideas and in exposing the Trotskyites, their capitulation to capitalism and their disorganizing activities.

=== Collectivization campaign (1927–1934) ===
Based on the successes of socialist industrialization and guided by Lenin's [[cooperative plan]], the 15th Congress of the CPSU (b) (1927) put forward [[collectivization]] of the [[agriculture]] as the most important task of the Party and Soviet people. These questions were covered in the political report of the Central Committee of the Party, made at the Congress by I. V. Stalin. During this period, an anti-party group of [[Opportunism|right-wing opportunists]]—[[Bukharin]], [[Alexei Rykov|Rykov]], [[Mikhail Tomsky|Tomsky]] and others—openly opposed the general line of the Party. In the reports of Stalin "On the industrialization of the country and the right deviation in the CPSU (b)" (1928), "On the right - the deviation in the CPSU (b)" (1929), etc. exposed the line of the right opportunists, which expressed the ideology of the [[kulak]], rich peasant class.

In 1930, Stalin released the ''Pravda'' article "Dizzy with Success," criticizing people who were overenthusiastic about [[collectivization]] and forced [[Peasantry|peasants]] onto collective farms. This issue was most severe in [[Transcaucasian Soviet Federative Socialist Republic|Transcaucasia]] and Central Asia, where collectivization was not scheduled to finish until 1933.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Bolshevik Party in the Struggle for the Collectivization of Agriculture|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch11.htm}}</ref>

At the XVI Congress of the CPSU(b) (1930) and XVII Congress of the CPSU(b) (1934) Stalin made reports on the work of the Central Committee of the Party. During this period, the Communist Party and the Soviet state carried out an all-out offensive of socialism against the [[Capitalism|capitalist]] elements. Under the conditions of a tense international situation, the country overcame enormous difficulties in order to put an end to the technical and economic backwardness within the shortest historical period. In pursuing a course of priority and predominant development of heavy industry, the Party made decisive progress in the socialist industrialization of the country and the collectivization of agriculture.

=== 1936 Constitution and later (1936–1939) ===
[[File:Stalin 1936.jpg|thumb|Stalin in 1936]]
Stalin helped draft the [[1936 Constitution of the Soviet Union]], which the Eighth Congress of Soviets approved in November 1936.<ref>{{Citation|author=Joseph Stalin|year=1939|title=History of the Communist Party of the Soviet Union (Bolsheviks)|chapter=The Bolshevik Party in the Struggle to Complete the Building of the Socialist Society. Introduction of the New Constitution|mia=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch03.htm|chapter-url=https://www.marxists.org/reference/archive/stalin/works/1939/x01/ch12.htm}}</ref> This constitution remained in effect until 1977.

In 1938 Stalin wrote his work "On dialectical and historical materialism", which gives a brief coverage of the foundations of Marxist-Leninist philosophy and shows its importance for the practical work of the Party.

In March 1939 the 18th Congress of the All-Union Communist Party of Bolsheviks was held. In the report of the Central Committee at the Congress Stalin outlined the program developed by the Central Committee of the struggle of the party and the Soviet people for the completion of building a socialist society in the gradual transition from socialism to communism.{{Citation needed}}

=== Second World War (1939–1945) ===
From December 1940 to January 1941, Stalin attended a military conference with all top military officers. The 18th Congress of the CPSU in February 1941 focused on preparing industry and transportation for the war. In early March, [[Semen Tymoshenko|Tymoshenko]] and [[Georgy Zhukov|Zhukov]] asked him to call up 800,000 reservists, which he initially refused but approved at the end of the month.<ref name=":022332">{{Citation|author=Ludo Martens|year=1996|title=Another View of Stalin|chapter=Stalin and the anti-fascist war|page=192–8|pdf=https://gateway.ipfs.io/ipfs/bafykbzaceab64vxtxpqt2cdl4zsrsftmedqidn4foq74gr25qkd35z5nwogdi?filename=Ludo%20Martens%20-%20Another%20View%20of%20Stalin-Editions%20EPO%20%281996%29.pdf|publisher=Editions EPO|isbn=9782872620814}}</ref> The size of the Red Army grew from two million in 1938 to over six million in 1941.<ref name=":05">{{Citation|author=Ludo Martens|year=1996|title=Another View of Stalin|chapter=Socialist industrialization|page=35–42|pdf=https://gateway.ipfs.io/ipfs/bafykbzaceab64vxtxpqt2cdl4zsrsftmedqidn4foq74gr25qkd35z5nwogdi?filename=Ludo%20Martens%20-%20Another%20View%20of%20Stalin-Editions%20EPO%20%281996%29.pdf|publisher=Editions EPO|isbn=9782872620814}}</ref>

On 21 June 1941, a German defector said that Germany would attack the Soviet Union the next night. Stalin alerted all units and told troops to camouflage themselves and their aircraft. He ordered them to secretly occupy firing posts on the border. Germany began bombing border cities at 3:40 a.m. on 22 June, and Stalin met with the Politburo at 4:30. He approved Zhukov's request to immediately attack the enemy, which was sent at 7:15 a.m. On 26 June, Stalin began creating a reserve front 300 kilometers behind the main front.<ref name=":022332" />

Joseph Stalin became [[Premier of the Soviet Union|Chairman of the Council of People's Commissars]] in 1941, a position he would hold until his death.<ref>{{Citation|author=Samuel Totten, Paul Bartrop|year=2008|title=Dictionary of Genocide: A–L|publisher=Greenwood Publishing Group|isbn=9780313346422}}</ref> He worked fourteen or fifteen hours daily during the war, taking his first vacation since 1937 in 1946.<ref name=":2">{{Citation|author=Domenico Losurdo, David Ferreira|year=2020|title=Stalin: The History and Critique of a Black Legend|chapter=The Complex and Contradictory Course of the Stalin Era|section=Bureaucracy or “Zealous Faith”?|page=121|quote=[At least during the years of the war] Stalin worked fourteen or fifteen hours a day in the Kremlin or at the dacha [...]. In autumn of 1946, Stalin went to the south to enjoy a vacation for the first time since 1937 [...]. A few months before his death, and ignoring urgent recommendations from doctors, Stalin rejected the possibility of taking a break in the autumn or winter of 1952, despite the enormous amount of time and effort dedicated to organizing the XIX party congress in October.|lg=http://library.lol/main/fab891d8f6bbf7bb49e78240483751e4|trans-lang=Italian}}</ref> At the beginning of the Great Patriotic War of the Soviet Union Joseph Stalin was appointed Chairman of the State Defense Committee, People's Commissar of Defense, and Supreme Commander of the Armed Forces of the USSR, and remained in these positions until the victorious end of the war. The great victory over the [[Adolf Hitler|Hitlerite]] coalition was won by the Soviet people under the leadership of the Communist Party and its Central Committee, headed by Stalin.

Stalin had extensive knowledge of the war situation and demanded exact accuracy from his staff. He required front commanders to send reports every day and criticized [[Rokossovsky]] when he did not do so on 16 August 1943. Stalin also had an excellent memory and remembered all the names of over 100 front commanders in addition to many other commanders, members of the [[People's Commissariat of Defense]], and party officials. He personally knew and often convened builders of planes, artillery, and tanks.<ref name=":0223323">{{Citation|author=Ludo Martens|year=1996|title=Another View of Stalin|title-url=https://en.prolewiki.org/wiki/Library:Another_view_of_Stalin|chapter=Stalin and the anti-fascist war|page=229–236|pdf=https://gateway.ipfs.io/ipfs/bafykbzaceab64vxtxpqt2cdl4zsrsftmedqidn4foq74gr25qkd35z5nwogdi?filename=Ludo%20Martens%20-%20Another%20View%20of%20Stalin-Editions%20EPO%20%281996%29.pdf|publisher=Editions EPO|isbn=9782872620814}}</ref>

During the war, Joseph Stalin, as a head of the Soviet government, took part in the conferences of the leaders of the three powers—the USSR, the USA and Great Britain—in Tehran (1943), in Yalta and Berlin (1945). During these years, Stalin maintained everyday correspondence with the presidents of the USA and the prime-ministers of Great Britain, in which he insistently fought for strengthening of anti-Hitler coalition, consistently defended the national interests of the peoples of the countries which were subject to Hitlerite aggression.

=== Postwar period and death (1946–1953) ===
[[File:StalinFinalSpeech1952.jpg|thumb|Stalin giving his final speech to the CPSU congress on October 14, 1952]]
In the postwar period, I. V. Stalin published his works "Marxism and questions of linguistics" (1950) and "Economic problems of socialism in the USSR" (1952), which considers important questions of Marxist-Leninist theory. "The Economic Problems of Socialism in the USSR" had a great influence on the development of some positions in the political economy of socialism. I.V. Stalin stressed the objective character of economic laws in socialism; based on the classical Marxism-Leninism statements, he formulated the main economic law of socialism, the law of systematic and proportional development of national economy; noted the importance of priority growth of means of production for the expanded socialist reproduction. At the same time, the work contains a number of erroneous and controversial positions (e.g.: assertion that commodity circulation begins to hinder the development of productive forces of the country and the gradual transition to product exchange is necessary; underestimation of the law of value in production, especially with regard to means of production; the statement about inevitability of reduction of the volume of capitalist production after World War II and about inevitability of wars between capitalist countries in the current conditions).{{Citation needed}}

In October 1952 the 19th Congress of the CPSU was held. At the closing session of the Congress Stalin made a speech. The Plenum of the CPSU Central Committee, which took place after the Congress, elected Joseph Stalin a member of the Presidium of the Central Committee and Secretary of the Central Committee of the Communist Party of the Soviet Union. Stalin continued to fight against [[revisionism]] and [[opportunism]] but underestimated the strength it would have without a capitalist [[Base and superstructure|base]].<ref name=":02233232">{{Citation|author=Ludo Martens|year=1996|title=Another View of Stalin|chapter=From Stalin to Khrushchev|isbn=9782872620814|publisher=Editions EPO|pdf=https://gateway.ipfs.io/ipfs/bafykbzaceab64vxtxpqt2cdl4zsrsftmedqidn4foq74gr25qkd35z5nwogdi?filename=Ludo%20Martens%20-%20Another%20View%20of%20Stalin-Editions%20EPO%20%281996%29.pdf|page=253–262}}</ref>

Outstanding work of Stalin was highly appreciated by the Soviet Union. Stalin's outstanding activities were highly appreciated by the Soviet government. He was awarded the ranks of a Hero of Socialist Labor (1939), a Hero of the Soviet Union (1945) and Generalissimo of the Soviet Union (1945). He was awarded with three Orders of Lenin, the Order of Victory, the Order of the Red Banner, Suvorov of the 1st degree and medals.

==== Death ====
Stalin's health declined during the early 1950s due to overwork during the war. He rejected to take a break in the autumn or winter of 1952, despite recommendations from doctors.<ref name=":2" /> In the last few months before his death, his security was dismantled. [[Alexander Proskryobychev|Proskryobychev]], Stalin's personal secretary since 1928, was put under house arrest, and [[Nikolai Vlasik]], Stalin's bodyguard, was arrested in December 1952 and died in prison. [[Pyotr Kosynkin]], Vice-Commander of the Kremlin Guard, died of a supposed heart attack on 17 February 1953. [[Lavrentiy Beria|Beria]] was the only one capable of such a plot, and [[Vyacheslav Molotov|Molotov]] suspected that MVD chief [[Lavrentiy Beria|Beria]] poisoned Stalin, while [[Enver Hoxha|Hoxha]] believed [[Nikita Khrushchev|Khrushchev]] and [[Anastas Mikoyan|Mikoyan]] had planned to assassinate him.<ref name=":02233232" />

On 1 March 1953, at 23:00 Stalin's guards found him unconscious in his room but did not call a doctor. He did not receive first aid until twelve hours after his collapse and died on 5 March.<ref name=":02233232" />

== Common myths ==

===Antisemitism===

While anti-semitism has been a historical tool of the [[Far-right politics|far-right]] and [[Fascism|fascists]] in particular, "[[Cultural Marxism|Judeo-Bolshevism]]" and "cultural bolshevism" being classic fascist [[Conspiracy theory|conspiracy theories]] linking the communist movement with fictional [[Judaism|Jewish]] cabals plotting world domination or ethnic domination, some historians still claim that Stalin too was an [[Anti-Semitism|anti-Semite]]. While [[Russian Empire (1721–1917)|Russia]] had a long and troubled history with [[Mikhail Bakunin|anti-Semitism]] before revolution, there is no evidence that Stalin held these views. The below letter from Stalin opposes this notion.

{{Quote|In answer to your inquiry:

National and racial chauvinism is a vestige of the misanthropic customs characteristic of the period of cannibalism. Anti-semitism, as an extreme form of racial chauvinism, is the most dangerous vestige of cannibalism.

Anti-semitism is of advantage to the exploiters as a lightning conductor that deflects the blows aimed by the working people at [[capitalism]]. Anti-semitism is dangerous for the working people as being a false path that leads them off the right road and lands them in the jungle. Hence Communists, as consistent internationalists, cannot but be irreconcilable, sworn enemies of anti-semitism.

In the U.S.S.R. anti-semitism is punishable with the utmost severity of the law as a phenomenon deeply hostile to the Soviet system. Under U.S.S.R. law active anti-semites are liable to the death penalty.|J. Stalin|Reply to an inquiry of the Jewish News Agency in the United States {{Refn|Stalin: ''Reply to an inquiry of the Jewish News Agency in the United States'' [https://www.marxists.org/reference/archive/stalin/works/1931/01/12.htm MIA link]}}}}During Stalin's time in office, Jews made up 4.3% of party membership, which was much higher than their share of the total population. [[Lazar Kaganovich|Kaganovich]] and [[Maxim Litvinov|Litvinov]], two members of Stalin's leadership, were both Jewish. During the late 1930s, 10% of Central Committee members were Jewish even though only about 1% of the total population was Jewish.'''<ref name=":02">{{Citation|author=Albert Szymanski|year=1984|title=Human Rights in the Soviet Union|chapter=The European Nationalities in the USSR|page=88–94|pdf=https://cloudflare-ipfs.com/ipfs/bafykbzaceazdmtb2y3qq27fve5ib3gk7uv2unt6ae2xss74xmfpur7k5uhl5m?filename=Albert%20Szymanski%20-%20Human%20Rights%20in%20the%20Soviet%20Union_%20Including%20Comparisons%20with%20the%20U.S.A.-Zed%20Books%20Ltd.%20%281984%29.pdf|city=London|publisher=Zed Books Ltd|isbn=0862320186|lg=https://libgen.rs/book/index.php?md5=C597B1232D9EA6B0F3DCB438D7E15A81}}</ref>'''

=== Autocratic rule ===
It is accepted in bourgeois circles that Stalin was a dictator who imposed his personal will on the entire country. However, during the Great Patriotic War, the Politburo and military leadership made collective decisions. If they could not agree, they would create a commission of opposing sides to create a proposal. Stalin, as Commander in Chief of the Red Army, took his generals' opinions into account and listened to their advice.<ref name=":0223323" />

Stalin was elected Chairman of the CPSU several times by the Plenum of the Central Committee.<ref name=":1" /> He also tried to resign four times, but each time was turned down by the Central Committee.<ref>{{Web citation|newspaper=Socialist Musings|title=Stalin’s Four Attempts at Resignation|date=2017-02-23|url=https://socialistmlmusings.wordpress.com/2017/02/23/stalins-four-attempts-at-resignation/}}</ref>

=== Personality cult ===
While there is no doubt that Stalin was a revered figure in the USSR, there is no evidence to suggest he made any active efforts to build up a [[cult of personality]] around himself. In fact, in 1938 he requested the destruction of a book that portrayed him too positively and stated that the theory of "heroes" was an [[Party of Socialist-Revolutionaries|SR]] and not a [[Communist Party of the Soviet Union|Bolshevik]] theory.<ref>{{Citation|author=Joseph Stalin|year=1938|title=Letter on Publications for Children Directed to the Central Committee of the All Union Communist Youth|title-url=https://mltheory.wordpress.com/2014/06/24/stalin-on-the-cult-of-personality/|city=London|publisher=Red Star Press|mia=https://www.marxists.org/reference/archive/stalin/works/1938/02/16.htm}}</ref> Stalin also condemned the "Great man" in a speech to collective farmers in 1933:

{{Quote|The times have passed when leaders were regarded as the only makers of history, while the workers and peasants were not taken into account. The destinies of nations and of states are now determined, not only by leaders, but primarily and mainly by the vast masses of the working people. The workers and the peasants, who without fuss and noise are building factories and mills, constructing mines and railways, building collective farms and state farms, creating all the values of life, feeding and clothing the whole world—they are the real heroes and the creators of the new life.|Joseph Stalin|[https://www.marxists.org/reference/archive/stalin/works/1933/02/19.htm Speech Delivered at the 1st All-Union Congress of Collective Farm Shock Brigadiers]|1933}}Kaganovich proposed the replacement of Marxism-Leninism with Marxism-Leninism-Stalinism, to which Stalin rejected saying: "you want to compare a dick to a guard tower."<ref>{{Citation|author=Domenico Losurdo, David Ferreira|year=2020|title=Stalin: The History and Critique of a Black Legend|chapter=How to Cast a God into Hell: The Khrushchev Report|section=The Cult of Personality in Russia, from Kerensky to Stalin|page=33|quote=In fact, when Kaganovich suggests substituting the term Marxism-Leninism for Marxism-Leninism-Stalinism, the leader to whom that tribute is directed responds: “you want to compare a dick to a guard tower."|lg=http://library.lol/main/fab891d8f6bbf7bb49e78240483751e4|trans-lang=Italian}}</ref> After winning the Great Patriotic War, Stalin declined the title of "Hero of the Soviet Union".<ref>{{Citation|author=Domenico Losurdo, David Ferreira|year=2020|title=Stalin: The History and Critique of a Black Legend|chapter=How to Cast a God into Hell: The Khrushchev Report|section=The Cult of Personality in Russia, from Kerensky to Stalin|page=33|quote=Immediately after the victory parade, a group of marshals reach out to Molotov and Malenkov: they propose to them the commemoration of the victory achieved in the Great Patriotic War by offering the title of “Hero of the Soviet Union” to Stalin, who nonetheless rejects the offer.|lg=http://libgen.li/ads.php?md5=fab891d8f6bbf7bb49e78240483751e4|trans-lang=Italian}}</ref> Not only that, but he refused to tour Berlin.<ref>{{Citation|author=Domenico Losurdo, David Ferreira|year=2020|title=Stalin: The History and Critique of a Black Legend|chapter=How to Cast a God into Hell: The Khrushchev Report|section=The Cult of Personality in Russia, from Kerensky to Stalin|page=33|quote=The Soviet leader also sought to escape rhetorical excesses on the occasion of the Potsdam Conference: “Both Churchill and Truman took their time walking among Berlin’s ruins; Stalin showed no such interest. Without drawing attention, he arrived by train, and even ordered Zhukov to cancel any welcoming ceremony with a military band and an honor guard.|lg=http://library.lol/main/fab891d8f6bbf7bb49e78240483751e4|trans-lang=Italian}}</ref>

On his 70th birthday, he categorically refused a state award.<ref>{{Citation|author=Domenico Losurdo, David Ferreira|year=2020|title=Stalin: The History and Critique of a Black Legend|chapter=How to Cast a God into Hell: The Khrushchev Report|section=The Cult of Personality in Russia, from Kerensky to Stalin|page=33|quote=He [Stalin] called in Malenkov and warned him: “Don’t even think about honoring me again with a ‘star’." “But comrade Stalin, on an anniversary like this? The people would not understand.” “It’s not up to the people. I don’t want to argue. No personal initiative! Understand me?” “Of course, comrade Stalin, but the politburo members think…” Stalin interrupted Malenkov and declared the discussion closed.|lg=http://libgen.li/ads.php?md5=fab891d8f6bbf7bb49e78240483751e4|trans-lang=Italian}}</ref>

== Popular support ==
In a poll made in 2019, 70% of [[Russian Federation|Russians]] said they had a positive view of Stalin's role in history. This was a 12% increase from 58% in 2015.<ref>{{News citation|newspaper=[[In Defense of Communism]]|title=Anticommunism Fails: 70% of Russians have a positive opinion on Joseph Stalin|date=2019-04-17|url=http://www.idcommunism.com/2019/04/anticommunism-fails-70-of-russians-have-positive-view-on-joseph-stalin.html|archive-url=https://web.archive.org/web/20210629093512/https://www.idcommunism.com/2019/04/anticommunism-fails-70-of-russians-have-positive-view-on-joseph-stalin.html|archive-date=2021-06-29}}</ref>

== See also ==

* [[Quotes:Joseph Stalin]]
* [[:Category:Library works by Joseph Stalin|Stalin's works in ProleWiki's Library]]

== Further reading ==

* ''[[Library:Another view of Stalin|Another View of Stalin]]''
* ''[[Library:Stalin: History and Critique of a Black Legend|Stalin: The History and Critique of a Black Legend]]''

==References==
<references />

=== Notes ===
<references group="lower-alpha" />
[[Category:1878 births]]
[[Category:1953 deaths]]
[[Category:Communist leaders]]
[[Category:Debunking myths]]
[[Category:Featured page]]
[[Category:Former heads of state]]
[[Category:Georgian anti-imperialists]]
[[Category:Georgian communists]]
[[Category:Georgian homophobes]]
[[Category:Georgian Marxist-Leninists]]
[[Category:Georgian Marxists]]
[[Category:Georgian politicians]]
[[Category:Heroes of Socialist Labour]]
[[Category:Heroes of the Soviet Union]]
[[Category:Joseph Stalin]]
[[Category:Marshals of the Soviet Union]]
[[Category:Marxism–Leninism]]
[[Category:Marxist theorists]]
[[Category:Recipients of the Jubilee Medal "XX Years of the Workers' and Peasants' Red Army"]]
[[Category:Recipients of the Medal "For the Defence of Moscow"]]
[[Category:Recipients of the Medal "For the Victory over Germany in the Great Patriotic War 1941–1945"]]
[[Category:Recipients of the Medal "For the Victory over Japan"]]
[[Category:Recipients of the Medal "In Commemoration of the 800th Anniversary of Moscow"]]
[[Category:Recipients of the Order of Lenin]]
[[Category:Recipients of the Order of Suvorov]]
[[Category:Recipients of the Order of the Red Banner]]
[[Category:Recipients of the Order of the Red Star of the
Bukharan PSR]]
[[Category:Recipients of the Order of Victory]]
[[Category:Russian Marxists]]
[[Category:Targets of bourgeois media]]

File:BRICS Members.svg

2024-10-24T18:10:15Z

Ismael: Ismael uploaded a new version of File:BRICS Members.svg

Library:Testament of Yahya Sinwar

2024-10-23T14:13:53Z

Ismael:

{{Library work|title=Testament|image=|author=TBD|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
service=YouTube|
id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue what the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle where the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed with freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with me, but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]

Library:Testament of Yahya Sinwar

2024-10-23T13:59:07Z

Ismael:

{{Library work|title=Testament|image=Yahya Sinwar.png|author=TBD|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
service=YouTube|
id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue what the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle where the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed with freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with me, but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]

Library:Testament of Yahya Sinwar

2024-10-22T04:34:09Z

Ismael:

{{Library work|title=Testament|image=Yahya Sinwar.png|author=Yahya Sinwar|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
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id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue what the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle where the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed with freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with me, but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]
[[Category:Libraru word of Yahya Sinwar]]

Library:Testament of Yahya Sinwar

2024-10-22T04:08:38Z

Ismael:

{{Library work|title=Testament|author=Yahya Sinwar|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
service=YouTube|
id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue what the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle where the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed with freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with me, but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]
[[Category:Libraru word of Yahya Sinwar]]

Library:Testament of Yahya Sinwar

2024-10-22T04:01:20Z

Ismael:

{{Library work|title=Testament|author=Yahya Sinwar|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
service=YouTube|
id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue what the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle where the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed with freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with, me but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]
[[Category:Libraru word of Yahya Sinwar]]

Library:Testament of Yahya Sinwar

2024-10-22T03:54:40Z

Ismael:

{{Library work|title=Testament|author=Yahya Sinwar|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
service=YouTube|
id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue what the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle with the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed a freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with, me but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]
[[Category:Libraru word of Yahya Sinwar]]

Library:Testament of Yahya Sinwar

2024-10-22T01:20:06Z

Ismael:

{{Library work|title=Testament|author=Yahya Sinwar|source=https://www.tiktok.com/@palinatheegoat/video/7428094527509892394}}{{#ev:
service=YouTube|
id=https://www.youtube.com/watch?v=62ooYV-D3Zs|
dimensions = 250x300|
alignment=right}}

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue with the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle with the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed a freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with, me but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]
[[Category:Libraru word of Yahya Sinwar]]

Library:Testament of Yahya Sinwar

2024-10-22T01:11:02Z

Ismael: Created page with "I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle. As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land. I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was..."

I am Yahya, the son of a refugee who turned exile into a temporary homeland, and turned a dream into an eternal battle.

As I write these words, I recall every moment of my life, from my childhood in the alleys, to the long years in prison, to every drop of blood spilled on the soil of this land.

I was born in the Khan Younis refugee camp in 1962 during a time when Palestine was a torn memory and forgotten maps on the tables of politicians. I am the man whose life was woven between fire and ashes and I realised early on that life under occupation means nothing but a permanent prison. From my earliest days I knew that life in this land is not ordinary and that whoever was born here must carry in their heart an unbreakable weapon, understanding that the road to freedom is long. My will to you starts here from that child who threw the first stone at the occupier, who learned that stones are the first words we speak in the face of a world that stands silent before our wounds.

I learned in the streets of Gaza that a person is not measured by the years of their life, but by what they give to their homeland. And so my life was: prisons and battles, pain, and hope. I entered prison for the first time in 1988 and was sentenced to life but I never knew fear. In those dark cells I saw in every wall a window to a distant horizon and in every bar a light that illuminated the path to freedom. In prison I learned that patience is not just a virtue but a weapon, a bitter weapon, like drinking the sea drop by drop.

My will to you: do not fear prisons for they are just part of our long journey toward freedom. Prison taught me that freedom is not just a stolen right but a concept born from pain and shaped by patience. When I was released in the "Wafa Al-Ahrar" prisoner exchange deal in 2011 I did not emerge the same. I emerged stronger, with a greater belief that what we're doing is not just a passing struggle but our destiny; one that we carry until the last drop of our blood.

My will is for you to remain steadfast, clinging to your dignity and to the dream that never dies. The enemy wants us to abandon resistance, to turn our cause into endless negotiations, but I say to you: "Do not negotiate over what is rightfully yours". They fear your steadfastness more than your weapons. Resistance is not just a weapon we carry but it is our love for Palestine in every breath we take, it is our will to remain despite the siege and aggression.

My will is for you to remain loyal to the blood of the martyrs, to those who have left us this thorn filled path. They paved the road to freedom with their blood, so do not waste those sacrifices in the calculations of politicians or the games of diplomacy. We are here to continue with the first generation began and we will not stray from this path no matter the cost. Gaza was and will remain the capital of steadfastness, the heart of Palestine that does not stop beating even if the world closes in around us.

When I took over the leadership of Hamas in Gaza in 2017 it was not just a transfer of power, but a continuation of the resistance that began with stones and continued with the rifles. Everyday I felt the pain of my people under the siege and I knew that every step we take toward freedom comes at a price, but I tell you "The cost of surrender is much greater". So hold on to the land as firmly as roots cling to the soil, for no wind can uproot a people who have chosen to live.

In the Al Aqsa flood battle I was not the leader of a group or movement, but the voice of every Palestinian dreaming of liberation. I was driven by my belief that resistance is not just an option but a duty. I wanted this battle to be a new chapter in the book of Palestinian struggle with the factions unite and everyone stands in the same trench against an enemy that never distinguishes between a child and an elder, or between stone and a tree. The Alqsa flood was a battle of spirit before it was a battle of bodies, and of will before it was a battle of weapons. What I leave behind is not a personal legacy, but a collective one for every Palestinian who dreamed a freedom, for every mother who carried her son as a martyr on her shoulder, for every father who wept bitterly for his daughter who was killed by a treacherous bullet.

My final will is that you always remember that resistance is not in vain, nor is it just a bullet fired; but a life lived with honor and dignity. Prison and siege have taught me that the battle is long and the road is hard, but I also learned that people who refuse to surrender create miracles with their own hands. Do not expect the world to be fair to you, for I have lived and witnessed how the world remain silent in the face of our pain. Do not wait for fairness, but be the fairness. Carry the dream of Palestine in your heart and make every wound a weapon and every tear a source of hope.

This is my will: do not lay down your weapons, do not throw away stones, do not forget your martyrs and do not compromise on a dream that is rightfully yours.

We are here to stay in our land, in our hearts and in the future of our children.

I entrust you with Palestine, the land I loved until death and the dream I carried on my shoulders like a mountain that never bends.

If I fall, do not fall with, me but carry the banner that never falls and make my blood a bridge for a generation that rises from our ashes stronger.

Do not forget that the homeland is not just a story to be told, but a reality to be lived, and with every martyr born from this land a thousand more resistance fighters are born.

If the flood returns and I am not among you, know that I was the first drop in the waves of freedom and I lived to see you continue the journey.

Be a thorn in their throat, a flood that knows no retreat, and do not rest until the world acknowledges that we are the rightful owners, and that we are not just numbers in the news.

Yahya Sinwar, born October 29th, 1962 [died as a martyr October 16th, 2024]

[May you rest in peace. Power to the resistance. Save Gaza and free Palestine]
[[Category:Library works about Palestine]]
[[Category:Libraru word of Yahya Sinwar]]

Nationalism

2024-10-11T23:46:50Z

Ismael: Added context on the birth of nationalism (Europe vs colonized world)

'''Nationalism''' is a movement that advocates for the unity of a [[nation]] and the formation of an independent [[nation-state]]. In [[Europe]] it began in the 18th and 19th centuries during the transition from [[feudalism]] to [[capitalism]];<ref>{{Web citation|author=Malyshev|newspaper=[[Politsturm]]|title=Nationalism And Its Class Meaning|date=2019-03-31|url=https://us.politsturm.com/nationalism-and-its-class-meaning/|archive-url=https://web.archive.org/web/20210623084746/https://us.politsturm.com/nationalism-and-its-class-meaning/|archive-date=2021-06-23|retrieved=2022-08-30}}</ref> in the colonized world it began with the [[contradiction]] [[Colonialism|colony-metropolis]]. It is usually more widespread among the [[peasantry]] than the [[proletariat]].<ref name=":02222">{{Citation|author=Roger Keeran, Thomas Kenny|year=2010|title=Socialism Betrayed: Behind the Collapse of the Soviet Union|chapter=Turning Point, 1987-88|page=163|pdf=https://ipfs.io/ipfs/bafykbzaceaj5ucph44bjwyhlhsbycckr3ts76zbucn2hbrea32tltcd4s5ekg?filename=Roger%20Keeran_%20Thomas%20Kenny%20-%20Socialism%20Betrayed_%20Behind%20the%20Collapse%20of%20the%20Soviet%20Union-iUniverse.com%20%282010%29.pdf|publisher=iUniverse.com|isbn=9781450241717}}</ref> Nationalism for oppressed or [[Colonialism|colonized]] nations may be [[Progressivism|progressive]] and [[Anti-imperialism|anti-imperialist]], but other forms of nationalism may be [[reactionary]] and [[Class collaboration|class collaborationist]]. [[Patriotic socialism]] is a form of reactionary nationalism for nations in the [[imperial core]].

[[Vladimir Lenin|Lenin]], [[Mao Zedong|Mao]], [[Kim Il-sung]] and [[Kim Jong-il]] among others outline two characters of nationalism: one being [[Chauvinism|chauvinistic]] and being proletarian. The nationalism of [[German Reich (1933–1945)|Nazi Germany]] and [[Empire of Japan (1868–1947)|Imperial Japan]], for example, was chauvinistic. On the other hand, the nationalism (or known as Socialist Patriotism, not to be confused with Patriotic Socialism) of [[People's Republic of China|China]], [[Democratic People's Republic of Korea|North Korea]] and [[Socialist Republic of Vietnam|Vietnam]] is patriotic.

== Reactionary nationalism ==
<blockquote>"Therefore, the banner of nationalism seemed to reflect the common interests of the nation. As capitalism developed and the bourgeoisie became the reactionary ruling class after victorious bourgeois revolutions in various countries, nationalism was used as a means of defending the interests of the bourgeois class. The bourgeoisie disguised their class interests as national interests, and used nationalism as an ideological instrument for solidifying their class domination. This led nationalism to be understood, among the people, as a bourgeois ideology that runs counter to the national interests. We should distinguish clearly between true nationalism that loves the nation and defends its interests and bourgeois nationalism that advocates the interests of the bourgeois class. Bourgeois nationalism reveals itself as national egoism, national exclusivism and bigpower chauvinism in the relationship between countries and 3 nations; it is reactionary in that it creates antagonism and disagreement between countries and nations, and checks the development of friendly relations between the various peoples of the world."</blockquote>- Kim Jong-Il, On having a correct understanding of Nationalism<ref>[https://kkfonline.com/wp-content/uploads/2020/05/On-Having-A-Correct-Understanding-Of-Nationalism.pdf On having a correct understanding of Nationalism] - Kim Jong-Il</ref>

We can clearly see that bourgeoisie nationalism in the eyes of Kim Jong-Il, was one that defends the big power chauvinism that ultimately lands itself in the pocket of the bourgeoise. Especially for nations such as the [[United Kingdom of Great Britain and Northern Ireland|United Kingdom]], [[French Republic|France]] and the [[United States of America]]. Bourgeoisie nationalism is the nationalism that upholds the [[Imperialism|imperial]] character of capitalist countries in the global north that seek to oppress and uphold their exploitatory nature. Kim Jong-Il further elaborates within the text "On having a correct understanding of Nationalism" that bourgeoisie nationalism is not a "true nationalism". It is a nationalism that benefits only the exploitatory class, the bourgeoisie. As defined by Kim Jong-Il, nationalism is an integral part of Socialism, but however must never be taken over by anti-international views. Nationalism of the chauvinistic character is one that ignores one's countries own flaws and seeks to uphold it's superiority, thus being described as "national egoism" and "national exclusivism".

== Proletarian nationalism ==
<blockquote>Can a Communist, who is an internationalist, at the same time be a patriot? We hold that he not only can be but also must be. The specific content of patriotism is determined by historical conditions. There is the "patriotism" of the Japanese aggressors and of Hitler, and there is our patriotism. Communists must resolutely oppose the "patriotism" of the Japanese aggressors and of Hitler. The Communists of Japan and Germany are defeatists with regard to the wars being waged by their countries. To bring about the defeat of the Japanese aggressors and of Hitler by every possible means is in the interests of the Japanese and the German people, and the more complete the defeat the better.... For the wars launched by the Japanese aggressors and Hitler are harming the people at home as well as the people of the world. China's case, however, is different, because she is the victim of aggression. Chinese Communists must therefore combine patriotism with internationalism. We are at once internationalists and patriots, and our slogan is, "Fight to defend the motherland against the aggressors." For us defeatism is a crime and to strive for victory in the War of Resistance is an inescapable duty. For only by fighting in defense of the motherland can we defeat the aggressors and achieve national liberation. And only by achieving national liberation will it be possible for the proletariat and other working people to achieve their own emancipation. The victory of China and the defeat of the invading imperialists will help the people of other countries. Thus in wars of national liberation patriotism is applied internationalism.</blockquote>- Mao Zedong, Quotations from Mao Tse-Tung, 18. Patriotism and Internationalism<ref name=":0">[https://www.marxists.org/reference/archive/mao/works/red-book/ch18.htm Quotations from Mao Tse-Tung, 18. Patriotism and Internationalism] - Mao Zedong</ref>

Here we can see that Mao details and outlines the necessity for Socialist "Patriotism" (used here interchangeably with nationalism in this context) was justified in nations where they are victims of aggressions. However, Mao further elaborates that "patriotism" must be combined with internationalism. He asserts that a good communist must combine patriotism with internationalism, that it is a necessity for those people to avoid the pitfalls of chauvinistic nationalism. He further elaborates about this topic with the following quote <blockquote>"We must never adopt an arrogant attitude of great-power chauvinism and become conceited because of the victory of our revolution and certain achievements in our construction. Every nation, big or small, has its strong and weak points."</blockquote>- Mao Zedong, Quotations from Mao Tse-Tung, 18. Patriotism and Internationalism<ref name=":0" />

The Socialist "Patriotism" used by those socialists who are fighting against aggressive imperialist powers or wars of national liberation must not turn or evolve into great-power chauvinism and use it as a reason to foment imperialism or hold a chauvinistic attitudes towards other countries. And that the "Socialist patriotism" cannot be upheld by those who are not fighting wars of national liberation or wars against an oppressor.

== See also ==

* [[Proletarian internationalism]]

== References ==
<references />
[[Category:Political ideology]]

Nation

2024-10-11T23:11:55Z

Ismael: Some nations predate capitalism. Sources for that yet to be included.

[[File:USSR national poster.png|thumb|304x304px|"More than 100 nations and nationalities live in the [[Union of Soviet Socialist Republics (1922–1991)|USSR]]."]]
A '''nation''' is a historically constituted, stable community of people, formed on the basis of a common [[language]], territory, economic life and culture.<ref name=":0">{{Textcite|author=[[Joseph Stalin]]|year=1913|title=Marxism and the national question|chapter=The Nation|pdf=|lg=|web=|mia=https://www.marxists.org/reference/archive/stalin/works/1913/03a.htm}}</ref> Some nations emerged and began to constitute themselves into [[Nation-state|nation-states]] during the transition from [[feudalism]] to [[capitalism]], specially in [[Europe]].<ref name=":0" /> Other nations instead predate the [[Capitalism|capitalist]] [[mode of production]], specially outside of [[Europe]].{{Citation needed}} Nations have the right to [[self-determination]], which may consist of independence or autonomy within a larger state.<ref>{{Citation|author=[[Joseph Stalin]]|year=1913|title=Marxism and the National Question|chapter=The National Movement|mia=https://www.marxists.org/reference/archive/stalin/works/1913/03a.htm#s2}}</ref>

== See also ==

* [[Nationalism]]

== References ==
<references />
[[Category:Marxist theory]]

Communist Party of Cuba

2024-10-10T05:50:04Z

Ismael: Wording: Communist parties practice internationalism not interventionism

{{Infobox political party
| name = Communist Party of Cuba
| native_name = Partido Comunista de Cuba
| logo = [[File:Logo del Partido Comunista de Cuba.svg|frameless|175px]]
| colorcode = red
| founder = [[Fidel Castro]]
| leader1_title = First Secretary
| leader1_name = [[Miguel Díaz-Canel]]
| foundation = 3 October 1965
| newspaper = ''[[Granma (newspaper)|Granma]]''
| political_orientation = [[Marxism–Leninism]]
| website = [http://www.pcc.cu/ www.pcc.cu]
| international = [[International Meeting of Communist and Workers' Parties]]
| youth_wing = Young Communist League
| country = [[Cuba]]
}}
{{Communist parties}}
The '''Communist Party of Cuba''' ('''PCC''') is the [[Marxism-leninism|Marxist–Leninist]] organized [[vanguard party|vanguard]] of the [[Republic of Cuba]], and is the political leading force of the Cuban state and society.<ref>''2019 Constitution of Republic of Cuba''. Article 5. [http://www.cubadebate.cu/cuba/constitucion-republica-cuba/ Link (Spanish)]</ref> The PCC is the sole legal political party in Cuba.

The PCC is a [[communist party]] organically structured under [[democratic centralism]] and holds as its main objective the building of [[socialism]].<ref>''Statute of the Communist Party of Cuba''. [https://www.pcc.cu/sites/default/files/documentos/2020-07/estatutos-pcc.pdf Link (Spanish)]</ref>

The highest body within the PCC is the Party Congress, which convenes every five years. When the Congress is not in session, the Central Committee becomes the highest body. Due to the Central Committee meeting twice a year, most day-to-day duties and responsibilities are vested in the Politburo. As of April 2021, the First Secretary of the Central Committee is [[Miguel Díaz-Canel]].<ref>{{Web citation|url=https://www.granma.cu/octavo-congreso-pcc/2021-04-19/elegido-miguel-diaz-canel-bermudez-como-primer-secretario-del-comite-central-del-partido-comunista-de-cuba-19-04-2021-10-04-18|title=Elegido Miguel Díaz-Canel Bermúdez como Primer Secretario del Comité Central del Partido Comunista de Cuba|newspaper=Granma|date=2021-04-19|retrieval-date=23 April 2021}}</ref>

==History==
Cuba had a number of [[Communism|communist]] and [[Anarchism|anarchist]] organizations from the early period of the [[Republic of Cuba (1902–1959)|Republic]] (founded in 1902). The original "[[Comintern|internationalised]]" Communist Party of Cuba formed in the 1920s. In 1944, it renamed itself as the [[Popular Socialist Party (Cuba)|Popular Socialist Party]] for electoral reasons. In July 1961, two years after the successful overthrow of [[Fulgencio Batista]] and the creation of a revolutionary government, the Integrated Revolutionary Organizations (ORI) was formed from the merger of:

* Fidel Castro's [[26th of July Movement]]
* The [[Popular Socialist Party (Cuba)|Popular Socialist Party]] led by [[Blas Roca]]
*Parts of the student-based [[Directorio Revolucionario Estudiantil|Revolutionary Directory]] led by [[Faure Chomón]]

On 26 March 1962, the ORI became the United Party of the Cuban Socialist Revolution (PURSC), which in turn became the Communist Party of Cuba on 3 October 1965. In Article 5 of the Cuban constitution of 1976, the Communist Party is recognized as "the superior guiding force of society and of the State, that organizes and orients common efforts toward the high goals of the construction of socialism and the advancement toward communist society".<ref>{{Web citation|url=http://pdba.georgetown.edu/Constitutions/Cuba/vigente.html#mozTocId561012|title=Cuba: Constitución|website=pdba.georgetown.edu|access-date=14 October 2017}}</ref> All political candidates, including those from the Communist Party, are prohibited from publicly advertising their organizations.

For the first fifteen years of its formal existence, the Communist Party was almost completely inactive outside of the Politburo. The 100 person Central Committee rarely met and it was ten years after its founding that the first regular [[Congress of the Communist Party of Cuba|party Congress]] was held. In 1969, membership of the party was only 55,000 or 0.7% of the population, making the PCC the smallest ruling communist party in the world. In the 1970s, the party's apparatus began to develop. By the time of the first party Congress in 1975, the party had grown to just over two hundred thousand members, the Central Committee was meeting regularly and provided the organizational apparatus giving the party the leading role in society that ruling Communist parties generally hold. By 1980, the party had grown to over 430,000 members and it grew further to 520,000 by 1985. Apparatuses of the party had grown to ensure that its leading cadres were appointed to key government positions.

==Ideology ==
Compared with other ruling Communist Parties, such as in [[Communist Party of Vietnam|Vietnam]], [[Communist Party of China|China]], and [[Lao People's Revolutionary Party|Laos]], the Communist Party of Cuba retains a stricter adherence to the tradition of [[Marxism–Leninism]] and the traditional [[Communist Party of the Soviet Union|Soviet model]]. The party has been more reluctant in engaging in market reforms, though it has been forced to accept some market measures in its economy due to the [[overthrow of the Soviet Union]] and the resultant loss of economic subsidies. The Communist Party of Cuba has often pursued an [[internationalist]] foreign policy, actively assisting [[Left-wing politics|left-wing]] revolutionary movements and governments abroad, including the [[National Liberation Army (Colombia)|ELN]] in [[Colombia]], the [[Farabundo Martí National Liberation Front|FMLN]] in [[El Salvador]], the [[Sandinista National Liberation Front|Sandinistas]] in [[Nicaragua]],<ref>{{Citation|author=Andrea Oñate|year=2011|title=The Red Affair: FMLN–Cuban relations during the Salvadoran Civil War, 1981–92|publisher=Taylor & Francis|doi=10.1080/14682745.2010.545566|lg=https://libgen.is/scimag/10.1080%2F14682745.2010.545566}}</ref> and [[Maurice Bishop]]'s [[New Jewel Movement]] in [[Grenada]].{{citation needed|date=February 2007}} The party's most significant international role was in the [[Angolan Civil War|civil war]] in [[Angola]], where Cuba directed a joint Angolan/Soviet/Cuban force in the [[Battle of Cuito Cuanavale]].<ref>{{Web citation|author=Michael Evans|url=http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB67/|title=Secret Cuban Documents on History of Africa Involvement|publisher=Gwu.edu|access-date=13 January 2010}}</ref><ref>{{Web citation|url=http://www.ipsterraviva.net/Africa/viewstory.asp?idnews=452|title=Cuba: Angolan War Memories Live On|date=16 June 2007|access-date=23 April 2018|url-status=dead|archive-url=https://archive.today/20070616124846/http://www.ipsterraviva.net/Africa/viewstory.asp?idnews=452|archive-date=16 June 2007}}</ref> More recently, the party has sought to support [[Pink Tide]] leaders across [[Iberoamerica|Latin America]], such as [[Hugo Chávez]] and later [[Nicolás Maduro]] in [[Venezuela]] and [[Evo Morales]] in [[Bolivia]].

[[Medical diplomacy]] has also been a prominent feature of the Party's foreign policy. The party [[Cuban medical internationalism|maintains a policy]] of sending thousands of Cuban doctors, agricultural technicians, and other professionals to other countries throughout the developing world.

After becoming the new First Secretary of the party, [[Raúl Castro]] campaigned to "renew" Cuba's socialist economy through incorporating new exchange and distribution systems that have been seen traditionally as "market oriented". This has led to speculation that Cuba may transition towards a model [[Socialist-oriented market economy|similar]] to that of China and Vietnam.<ref>{{Web citation|url=http://insight.inewsweek.cn/topic.php?tid=626|title=古巴改革："社会主义更新"未完待续|access-date=22 April 2014|archive-url=https://web.archive.org/web/20140429205524/http://insight.inewsweek.cn/topic.php?tid=626|archive-date=29 April 2014}}</ref> Private property and the need for foreign investment were recognized in the new constitution promulgated in 2019.<ref>Díaz-Canel, Miguel (10 April 2019). "[https://www.eltiempo.com/mundo/latinoamerica/la-nueva-constitucion-de-cuba-en-2019-348154 Así es la Constitución que estrena Cuba en tiempos de crisis]" [This is the Constitution that Cuba launches in times of crisis]. ''El Tiempo'' (in Spanish). Retrieved 9 March 2023.</ref>

== Mass organizations related to the PCC==

* [[Young Communist League (Cuba)|Young Communist League]], (UJC founded in 1962 by [[Fidel Castro]]), youth group of future militants of the PCC
* [[Workers' Central Union of Cuba]], (CTC, founded in 1939 by Blas Roca and Lázaro Peña), a Cuban trade union center.
* [[Federation of Cuban Women]], (FMC, founded in 1960 by Fidel Castro and Vilma Espín), a centralized women's organization.
* [[National Association of Small Farmers]], (ANAP, founded in 1961 by Fidel Castro), a peasant organization.
* [[José Martí Pioneer Organization]], (OPJM, founded in 1977 by Fidel Castro), student organization (pioneers).
* Student Federation of Secondary Education,(FEEM, founded in 1970 by Fidel Castro), student organization (pre).
* University Student Federation, (FEU, founded in 1922 by [[Julio Antonio Mella]]), student organization (university).
* [[Committees for the Defense of the Revolution]], (CDR, founded in 1960 by Fidel Castro), community work organization.
* Association of Combatants of the Cuban Revolution, (ACRC, founded in 1993 by Fidel Castro), organization of active and retired military personnel.
* [[Union of Journalists of Cuba|Union of Journalists of Cuba, (UPEC, founded in 1963 by Fidel Castro)]], a centralized organization of journalists.

==Youth==
The Communist Party of Cuba has a youth wing, the [[Young Communist League (Cuba)|Young Communist League]] (''Unión de Jóvenes Comunistas'', UJC) which is a member organization of the [[World Federation of Democratic Youth]]. It also has a children's group, the [[José Martí Pioneer Organization]].

==References==
<references />
[[Category:Communist parties]]
[[Category:Cuba]]

Cuban Revolution

2024-10-10T05:32:12Z

Ismael: Deleted some missconceptions by a hoxhaist banned editor

{{Infobox military conflict
|date = July 26th, 1953 - January 1st, 1959
|result = [[Cuban Revolutionaries]] Victory
|combatant1 = {{icon|}} [[Cuban Revolutionaries]]
|combatant2 = {{icon|}} [[Cuban Government Armed Forces]]
|type=National liberation revolution
|image=
|place=Cuba}}

The '''Cuban Revolution''' was a [[socialist revolution of national liberation]] that triumphed in [[Cuba]] on January 1st 1959 led by [[Fidel Castro]]'s [[26th of July Movement]] (M-26-7) against the [[neocolonial]] military regime of [[Fulgencio Batista]].

While the M-26-7 was not an explicitly [[Marxist-Leninist|Marxist–Leninist]] organization, its top leadership was largely dominated by Marxist–Leninists such as [[Fidel Castro]], [[Raúl Castro]] and [[Che Guevara]], and its earliest announced goals were intentionally kept moderate in order to retain integral support from liberal elements (such as the primarily student-based Revolutionary Directorate) as well as international support from countries hostile to communism.[[File:Entrada-de-Fidel-a-La-Habana.jpg|thumb|The 26th of July Movement entering Havana on January 8, 1959]]

==References==
{{Reflist}}
[[Category:Cuba]]

Cuba Posible

2024-10-04T00:34:53Z

Ismael: Created page with "(Para que el Camarada Infamoso Tim traduzca el artículo de la wiki en español)"

(Para que el Camarada Infamoso Tim traduzca el artículo de la wiki en español)

Raúl Castro

2024-10-01T20:33:34Z

Ismael: It is a blockade, not an embargo!

{{Infobox revolutionary|name=Raúl Castro|birth_name=Raúl Modesto Castro Ruz |birth_date=3 June 1931 (age 92)|birth_place=Birán, [[Cuba]]|death_date=|death_place=|political_orientation=[[Marxism–Leninism]] [[Anti-imperialism]]|political_party=[[Communist Party of Cuba]] (PCC)|image=File:RaulCastro.jpg}}'''Raúl Modesto Castro Ruz''' (born 3 June 1931) is a Cuban [[Marxist-Leninist|Marxist–Leninist]] revolutionary and politician, who served as the First Secretary of the [[Communist Party of Cuba]] (PCC) from 2011 until 2021, and as President of Cuba from 2008 until 2018.

Born in Birán, Castro, along with his brother [[Fidel Castro|Fidel,]] [[Ernesto Guevara|Ernesto "Che" Guevara]], [[Camilo Cienfuegos]], [[Juan Almeida Bosque]] and others, formed the [[26th of July Movement]], which overthrew Cuba's dictator [[Fulgencio Batista]] and established a [[dictatorship of the proletariat]]. Castro's presidency saw him preside over the introduction of market reforms in Cuba due to extensive sanctions and an the [[Economic, commercial and financial embargo imposed by the United States of America against Cuba|economic, commercial and financial blockade]] by the [[United States of America]] and the [[overthrow of the Soviet Union]], which had stifled the economy. Castro was a member of the Politburo of the Communist Party of Cuba for 56 years, from 1965 until 2021. Castro retired from politics in 2021 and [[Miguel Díaz-Canel]] has since taken over many of Castro's previous positions.

On May 1, 2019, Castro received the [[Lenin Prize]] from the Central Committee of the Communist Party of the Russian Federation. He received it from Iván Mélnikov, vice president of the Duma.<ref>{{Web citation|author=Leticia Martínez Hernández|newspaper=Granma|title=Raúl awarded Lenin Prize|date=2019-05-02|url=https://en.granma.cu/cuba/2019-05-02/raul-awarded-lenin-prize|retrieved=2023-07-09}}</ref><ref>{{Web citation|author=Ivan Ivanovich Melnikov|newspaper=Granma|title=Raúl awarded the Lenin Prize for his exceptional contribution to the construction of socialism|date=2019-05-03|url=https://en.granma.cu/cuba/2019-05-03/raul-awarded-the-lenin-prize-for-his-exceptional-contribution-to-the-construction-of-socialism|retrieved=2023-07-09}}</ref>

Raúl Castro had also helped to promote peace between FARC and the Colombian government.<ref>{{Web citation|newspaper=People's Daily Online|title=Miguel Diaz-Canel elected as Cuba's new president, vows continuity of socialism|date=2018-04-20|url=http://en.people.cn/n3/2018/0420/c90000-9452022.html|retrieved=2023-09-13}}</ref>

[[Category:Socialist leaders]]
[[Category:Former heads of state]]
[[Category:Revolutionaries]]
[[Category:Anti-imperialists]]
[[Category:Communist leaders]]

Midwestern Marx

2024-09-26T16:33:30Z

Ismael:

{{Infobox youtuber|name=Midwestern Marx|image=File:Midwestern_Marx_logo.png|image_size=200|Ideology=[[Marxism-Leninism]] (De Jure) [[MAGA_Communism|MAGA "Communism"]] (De Facto) [[Patriotic_socialism|Patriotic Socialism]] (De Facto)|views=4,996,039 (September 2024)|subscribers=50,700 (September 2024)|years_active=2020–present|channel_website=[https://www.youtube.com/c/MidwesternMarx Midwestern Marx]}}'''Midwestern Marx''' is a [[United States of America|US]]-based [[Revisionism|revisionist]] online publishing house. Its content includes online articles, book series, academic journals<ref>''[https://www.midwesternmarx.com/journalofamericansocialiststudies.html Journal of American Socialist Studies (JASS)]''</ref> (ISSN 2769-1055), and online videos. The organization erroneously pushes [[patriotic socialism]], and thus supports [[United States imperialism|U.S. imperialism]].<ref name=":1">{{Web citation|author=Kayla Popuchet|newspaper=Midwestern Marx|title=In Defense of U.S. Proletarian Patriotism: A comradely response to Danny Haiphong’s “Marxist” Polemic on Patriotic Socialism.|date=2021-12-05|url=https://www.midwesternmarx.com/articles/in-defense-of-us-proletarian-patriotism-a-comradely-response-to-danny-haiphongs-marxist-polemic-on-patriotic-socialism-by-kayla-popuchet|archive-url=https://web.archive.org/web/20230602182445/https://www.midwesternmarx.com/articles/in-defense-of-us-proletarian-patriotism-a-comradely-response-to-danny-haiphongs-marxist-polemic-on-patriotic-socialism-by-kayla-popuchet|archive-date=2023-06-02|quote=Put simply, the United States, as every country, is not a product of genocide and slavery, nor is it a product of freedom and liberty, it is a product of class antagonisms and struggle, in this regard it is not exceptional.}}</ref><ref>{{Web citation|author=Roderic Day|newspaper=Twitter|title=Untitled Twitter Thread|date=2023-06-06|url=https://twitter.com/RodericDay/status/1666063389733298176}}</ref>
== Staff ==
The staff consists of 6 members of the editorial board, more than 30 writers, and 3 Spanish-English translators. Additionally, there are more than a dozen writers for the Youth League.<ref>{{Web citation|author=Midwestern Marx|newspaper=Midwestern Marx|title=Midwestern Marx Staff|date=2024-01-23|url=https://www.midwesternmarx.com/staff.html|archive-url=https://web.archive.org/web/20240123083144/https://www.midwesternmarx.com/staff.html|archive-date=2024-01-23|retrieved=2024-01-23}}</ref>

=== Editorial board ===

* Thomas Riggins: Chief Editorial Counselor, retired philosophy teacher, and 1960s-era activist and writer
* [[Carlos Garrido|Carlos L. Garrido]]: [[Republic of Cuba|Cuban]] philosophy graduate student focused on [[Marxism]], [[Georg Wilhelm Friedrich Hegel|Hegel]], and early 19th century US socialism
* [[Eddie Liger Smith|Edward (Eddie) L. Smith]]: Director, US political scientist.
* Mitchell K. Jones
* Calla Winchell
* Noah Khrachvik

=== Other members ===
* Alex Zambito

== Chauvinistic and reactionary behavior ==
Midwestern Marx agreed with [[Jackson Hinkle]], a notorious patriotic socialist and Revisionist, that Marxism-Leninism was compatible with loyalty to the United States.<ref>{{Web citation|author=@MidwesternMarx|title=The ultra-left reactions to this tweet show they’ve never read any Marx, Engels, or Lenin - and perhaps worst, they’ve never met a working class American in their life.|date=2021-09-06|url=https://twitter.com/MidwesternMarx/status/1435038558717419525|archive-url=https://web.archive.org/web/20240110053159/https://twitter.com/MidwesternMarx/status/1435038558717419525|archive-date=2024-1-10|retrieved=2024-1-10}}</ref> A number of members have been noted for having a history of bullying.<ref>{{YouTube citation|url=https://www.youtube.com/watch?v=o6HKfc_U8Q4|channel=Comrade Confucius|title=The Social Chauvinists of America are now Marxists (don't laugh)|date=27-01-2024}}</ref>

One of its directors, [[Eddie Liger Smith|Eddie Liger]], frequently engages in [[Tailism|tailist]] and [[Class collaboration|class collaborationist]] tactics by defending association and partnership with open [[Fascism|fascists]] akin to the [[Black Hundreds]], rather than trying to win over misguided [[Proletariat|proletarians]] away from their leadership.<ref>{{Web citation|author=@EdbieLigerSmith|title=If Modern day Western communists lived in Russia|url=https://twitter.com/EdbieLigerSmith/status/1673102904436113409|archive-url=https://web.archive.org/web/20230626023258/https://twitter.com/EdbieLigerSmith/status/1673102904436113409|archive-date=26 Jun 2023|quote=If Modern day Western communists lived in [[Russian Empire|Russia]] they would have tweeted pictures of the [[Bolsheviks]] reaching out to the [[Black Hundreds|black hundreds]] and demanded that people cancel them for it.}}</ref>

Eddie deliberately misrepresents [[Marxism]]. For example, in a February 3 Twitter post, he said that "[he] had 10 farmers on [his] college wrestling team, and they all f**** love Trump".<ref>{{Web citation|author=@EdbieLigerSmith|newspaper=Twitter|title=This person does not live in Iowa lol. I think I had 10 farmers on my college wrestling team alone 😂|date=2024-|url=https://twitter.com/EdbieLigerSmith/status/1753789852334629195}}</ref> User @bidetmarxman replied to this post, noting there is a difference between farm owners and farm workers that Eddie didn't make, and that "farmers" usually refers to farm owners specifically. Owners are a "petty bourgeois reactionary group", while workers are "are much more numerous and are proletariat, thus forming part of the revolutionary subject". They go on to explain that Eddie, being a director of Midwestern Marx, should or would not be making such a basic mistake if he were not being disingenuous on purpose to cater to the reactionary tendencies of his audience.<ref>{{Web citation|author=Professional hog groomer|newspaper=Twitter|title=“Farmers” is typically short hand for farm *owners* (or in Eddie’s case the sons of farm owners)|date=2024-02-04|url=https://twitter.com/bidetmarxman/status/1754059983640261026|retrieved=2024-02-05|quote=“Farmers” is typically short hand for farm *owners* (or in Eddie’s case the sons of farm owners). They’re a petit bourgeois and reactionary group. Farm *workers*, otoh, are much more numerous and are proletariat, thus forming part of the revolutionary subject.

Confusing the two is a very basic error that you might expect from someone first grappling with Marxist concepts of class and relations of production. But not from someone positioning themselves as the director of an org teaching Marxist theory.}}</ref>

Danny Shaw, one of the Institute's staff, engaged in Hitlerite anti-semitism structured rant on Instagram.<ref>{{Web citation|author=Danny Shaw|newspaper=Instagram|title=Who runs Hollywood?|url=https://media.discordapp.net/attachments/843985440486719508/1243113944030384148/GOIfknVWYAEuYj3.jpg?ex=66563a54&is=6654e8d4&hm=875d01a7a19925f10513f762616eac3cc1af8a1c7bf99698273b5fbb4323518f&=&format=webp&width=322&height=595}}</ref>

== Ideology ==
Midwestern Marx generally supports patriotic socialism and is against the [[decolonization|decolonisation]] of the United States.<ref>{{Web citation|author=[[Paul Cockshott]]|newspaper=Midwestern Marx|title=Marxism and the Nationalisation of Land|date=2021-10-03|url=https://www.midwesternmarx.com/articles/marxism-and-the-nationalisation-of-land-by-paul-cockshott|archive-url=https://web.archive.org/web/20230606094113/https://www.midwesternmarx.com/articles/marxism-and-the-nationalisation-of-land-by-paul-cockshott|archive-date=2023-06-06|quote=That is because the mass of the direct producers in the USA are not from the indigenous population. Under these circumstances where [sic] they to acquire ownership of all land[,] they would inevitably become and [sic] exploiting minority.}}</ref> It accuses the opponents of patriotic socialism of being [[American exceptionalism|American exceptionalists]]<ref name=":1" /> even though they also oppose patriotism in other imperialist countries.<ref>{{Citation|author=[[Mao Zedong]]|year=1966|title=Quotations from Chairman Mao Tse-tung|title-url=http://www.marx2mao.com/Mao/QCM66.html|chapter=Patriotism and Internationalism|chapter-url=https://www.marxists.org/reference/archive/mao/works/red-book/ch18.htm|quote=The specific content of patriotism is determined by historical conditions. There is the "patriotism" of the Japanese aggressors and of [[Hitler]], and there is our patriotism. Communists must resolutely oppose the "patriotism" of the Japanese aggressors and of Hitler. The Communists of Japan and [[Nazi Germany|Germany]] are defeatists with regard to the wars being waged by their countries. To bring about the defeat of the Japanese aggressors and of Hitler by every possible means is in the interests of the Japanese and the German people, and the more complete the defeat the better...For the wars launched by the Japanese aggressors and Hitler are harming the people at home as well as the people of the world. [[Republic of China|China]]'s case, however, is different, because she is the victim of aggression.|pdf=http://www.marx2mao.com/PDFs/QCM66.pdf|city=Beijing|publisher=Foreign Languages Press|mia=https://www.marxists.org/reference/archive/mao/works/red-book/index.htm}}</ref>{{Better source needed}} It also incorrectly defines [[nationalism]] as loyalty to the state and [[patriotism]] as loyalty to the people and absurdly claimed the [[United States of America|Statesian]] [[Settler colonialism|settler state]] is not a product of genocide.<ref name=":1" />

== Censorship ==
In 2020, after the [[Central Intelligence Agency|CIA]]-connected company [[Oracle Corporation|Oracle]] bought TikTok, it banned Midwestern Marx's account that had 375,000 followers.<ref name=":0">{{Web citation|author=Carlos L Garrido|newspaper=[[Monthly Review]]|title=The U.S. censors Dissenting Voices: On the attacks against the Midwestern Marx Institute|date=2023-06-02|url=https://mronline.org/2023/06/02/the-u-s-censors-dissenting-voices/|retrieved=2023-06-01}}</ref> In 2022, the video sharing platform TikTok banned Midwestern Marx's second account,<ref>{{News citation|journalist=Eddie Smith|date=2022-03-03|title=Tik Tok BANNED us. Freedom of Speech under Capitalism.|url=https://www.youtube.com/watch?v=BJdSIYipEzs}}</ref><ref>@MarxMidwest on Twitter: [https://twitter.com/MarxMidwest/status/1499396557258559489?s=20&t=LlZCFJG08LMvPuRnQDtclg "Tik tok banned our second account today. They are completely silencing us. Not letting us have any kind of voice on their platform. Creating a neoliberal echo chamber."] ''[https://web.archive.org/web/20220303215000/https://twitter.com/MarxMidwest/status/1499396557258559489 (Archived)]''</ref> and it has banned five more accounts since then.<ref name=":0" />

== Content ==
Midwestern Marx covers many different topics. They have discussed how the CIA was involved in promoting the [[Frankfurt School]]'s Critical Theory ideology.<ref>{{News citation|newspaper=[[Midwestern Marx]]|title=The Frankfurt School and the CIA - Interview W/ Gabriel Rockhill|url=https://youtu.be/_FztGkdoO0I}}</ref>

== Links ==

* [https://www.youtube.com/midwesternmarx YouTube]
* [https://www.instagram.com/midwesternmarx/ Instagram]
* [https://twitter.com/MarxMidwest Twitter]
* [https://linktr.ee/Midwesternmarx LinkTree] (Their curated list of links)
*[https://www.tiktok.com/@eddieligersmith @EddieLigerSmith on TikTok] (censored)

== References ==
<references />
[[Category:Communist YouTube channels]]
[[Category:Targets of censorship]]
[[Category:Socialist media outlets]]
[[Category:Online left]]
[[Category:Patriotic socialism]]

Library:Speech at the meeting held by the directors of the Schools of Revolutionary Instruction

2024-09-24T22:01:29Z

Ismael: The text still needs some fixing

{{Library work|title=Speech at the meeting held by the directors of the Schools of Revolutionary Instruction|author=Fidel Castro|written in=December 20, 1961}}

I wanted to tell you that I believe my intervention may not be very useful or well-suited to the purpose of your meetings, since I have not participated in the discussions you have had. Surely from the exchange of a series of opinions, ideas, and experiences from you all, some more interesting or valuable suggestions regarding schools could have been offered to me.

In any case, since I am tasked with addressing you, I will simply express, mainly, one thing that is important in schools, namely, the value they have for the Revolution as Revolutionary Instruction Schools.

=== [Terminology in the Cuban Revolution] ===
We call it the Revolutionary Instruction School because we need our own terminology to conceptualize things.

For example, we use the term "revolutionary guide" as a term that is more our own, while in other places it is referred to as "agitator". The word "agitator" has become somewhat problematic, much like with cooperatives.

There are certain words that the enemy has maliciously attacked, creating certain complexes… not complexes, but conditioned reflexes. And we are not obligated to use terms…

==== [Sovkhoz = People's Farm] ====
For example, a People's Farm… What is a People's Farm? In the Soviet Union, they call it a "sovkhoz".

But if we had called the People's Farm "sovkhoz," the enemies of the Revolution would have raised a tremendous scandal. Moreover, there is no reason to call it "sovkhoz". Ours is a "People's Farm," which is a Cuban name for a type of collective production farm.

And it fits very well because, among other things, the concept is expressed in the word.

It always takes time for the people to fully identify social ownership, the property of all the people, the nationalized enterprises, as their own. This identification occurs gradually, but the term "People's Farm," for example, has the advantage that the concept is included in the very term. That is to say, a business that belongs to the people. If we had called a People's Farm "sovkhoz," it is very likely that many people would still be asking what a People's Farm is. But in the word itself, the concept is included.

==== [Cooperative = Agricultural society] ====
With cooperatives, counter-revolutionaries in the countryside have tried, for example, to instill fear. So it is undeniable that they rely on the very special idiosyncrasy of the peasants, because the poor peasant, the small farmer, is an ally of the working class and must be an ally of the working class; in the revolutionary struggle, as an ally of the working class, he also liberates himself from the exploitation of the large landowners, the intermediaries, the moneylenders, and the laborers; he is an ally, but not a deceived ally, rather a conscious ally, and he must become an increasingly conscious ally because, in that alliance with the working class, he gains a series of advantages.

However, at the same time, a socialist revolution, which entails the idea of socialization, also entails the idea of collective ownership, of the ownership of all the people; thus, this naturally contradicts the idiosyncrasy of that small farmer who, after all, is an owner; he is a small owner; and he is used to a personal property relationship with the land and the means of production, even if he does not exploit anyone, which is one of the differences between the small agricultural owner and the medium or large owner, because he works with his own effort, owns the means of production, receives the fruits of his labor, works with his family, and does not employ anyone to work for him.

But regardless, that background of his concept remains, along with that custom, that habit, of being a property owner, albeit on a small scale, of the means of production and the land.

In the reality of the facts of the Revolution, to that small property owner—who is now a small property owner even, because before he wasn’t even a property owner, he was a tenant: he had to work practically on the land for someone else, and now he works for himself on land that is his, a consequence of the very aspirations of that peasant, who has always aspired to not pay rent, who has always aspired to have land—what is the first thing the Revolution gives him? It gives him the land, that is, it satisfies an aspiration of his.

Socialism does not hinder him at all. On the contrary, socialism, based on the alliance with the working class, means for him the liberation from paying rents, from working for someone else, liberation from moneylenders, liberation from intermediaries; liberation both from intermediaries who bought his goods and sold them in the cities, as well as from those who bought manufactured goods in the cities and sold them to him. That is to say, an alliance is established based not on deceit or fiction, but based on a series of real benefits. However, the idea of socialism is the antithesis of private property.

This contradiction (which is an apparent contradiction, not a real contradiction, in the reality of the revolutionary process) is a contradiction that is resolved over the course of the revolutionary process when gradually, and by virtue of the process, and without any coercion or violence, through habit, education, and the influence of the general economic development of the country, private property gradually transforms into collective property.

But then the counter-revolutionaries tell the peasant: "This Revolution is socialist". But, seeing a cooperative nearby, which is the cooperative formed by a large sugar plantation, or seeing a People's Farm, they tell that peasant: "They are going to socialize your land". And indeed, during one stage, there was a sort of acclimatization period to revolutionary ideas.

The propaganda of the counter-revolutionaries had some effect on the peasant. They said: "This is socialism, and they are going to socialize the land". Thus, many peasants lived with the worry that their land would be socialized. We have had some experience in conversations with some peasants when we have visited, for example, an area of small farmers, to find out why they do not increase production, what their problems are, what their concerns are.

And we have found, for example, how the mentality of the peasant who has a small plot of land and works it himself; a peasant who understands the Revolution, who is very interested, who is very grateful for the Revolution; who explains how much he used to have to pay, how many years he paid; how he now has to pay less for loans; how he has credits, and how the prices of his goods are; all the advantages of the Revolution. And it is clear that he is, indeed, a friend.

But when I was about to say goodbye to him, for example, the peasant, with great spontaneity and honesty, said to me: "Well, I just don’t want to be put into a cooperative". So, indeed, that peasant, accustomed to working that little piece of land, seeing his cows, seeing his things all his life, cannot reconcile the idea of having to work in a cooperative, especially when he has seen a cooperative not functioning well, which is even worse.

So, his concern is that: not to be put into a cooperative. I have also sometimes spoken with small farmers, who amaze with their great revolutionary consciousness, their admiration for the cooperative. I have encountered the case of the small farmer who has his pig, poultry, grows some minor crops, and lives off that. But at the same time, when asked: "What beans did you plant?"; he says: "Well, I got them from the cooperative; I planted the beans that the cooperative brought me". And then he says: "They are building beautiful houses in the cooperatives". So he talks about the cooperative houses. "And how are they?"; and he says: "Well, look, those people are doing very well; they have worked all year; those people barely worked before, worked a little time and went hungry, and now they are doing very well".

Then he starts to talk about the cooperative in a non-political way, reflecting the admiration he feels for the cooperative, like some other things they have said, because in the village is where, generally speaking, the best arguments to refute the enemies of the Revolution are found.

One lady, for example, told me one day: "Now, at the butcher shop, we can go buy meat, we also get a piece; because before, the one with money and a refrigerator bought 10 to 15 pounds of the best meat, and kept it; and now it is distributed; now, even if you have money and somewhere to store it, you can’t buy more than two pounds, and now we are buying meat".

So she compared how her situation, even in terms of supplies, had changed because the one with money bought the best meat, it was set aside for him, he kept it, had no problems. This also explains the discontent of the one who has a refrigerator and money, and now cannot buy 15 pounds at the butcher, but only one or two pounds as well.

This lady's case is like that of the peasant who recently spoke at the event, who made a tremendous argument: "The bourgeoisie complain now because we eat equally".

Well, there are peasants who have already analyzed the cooperative: they have sufficient light, sufficient common sense, and they analyze it, and they speak with admiration for the cooperatives. To another type of peasant, they instill fear with cooperatives. Thus, the word "cooperative" becomes an allergic term for them. That’s why now, instead of cooperatives, we are forming agricultural societies.

What are agricultural societies?

In those farms of people who abandon the territory, or small pieces of land that remain, in areas of small farmers… (not next to a large farm, because in areas of large farms or cooperatives, like in the East and Camagüey, it is absurd to establish an agricultural society in surplus land next to a farm or a cooperative; but yes in those areas with many small farmers, like in Havana, Las Villas, and Matanzas), if there is a piece of land of nine caballerías, an agricultural society is formed.

With whom? With the agricultural workers who are there and with some peasants who have a tiny piece and want to join. The peasant, when he joins the agricultural society, has advantages, and he does not hesitate for a minute. To one who has a third of a caballería, they talk about joining with three or four other peasants who also have a third: to join their lands into a parcel of three or four caballerías. And they see that they will have a larger average, a greater yield. Immediately they like the agricultural society. On the other hand, when they encounter a peasant who has a caballería, or one and a half, or two… and the benefits he will receive from joining the society are not greater than those he receives as a small farmer; that one prefers to stay on his piece of land rather than join the agricultural society.

But in general, the term agricultural society has been very well received by the peasants. What does it consist of? In that same thing: three caballerías of surplus land, two peasants who have a very tiny piece, one or two more agricultural workers; well: let the four of them gather, and in these three caballerías, or these four caballerías, they form an agricultural society.

The administrator is not designated by the INRA<ref>INRA: Instituto Nacional de la Reforma Agraria (National Institute of the Agrarian Reform).</ref>; the administrator is designated by them there. They receive credits, just like the small farmers do. In reality, it is a small cooperative, but it is not called a cooperative. If you ask the peasants: "Do you want to join a cooperative?" they will say "no". They have a different idea of that. So they join enthusiastically in an agricultural society, without any prejudices.

==== [Schools of Revolutionary Instruction = Schools of Marxism-Leninism] ====
Well, all this history relates to the fact that we called them "Schools of Revolutionary Instruction". It is correct to call them Schools of Revolutionary Instruction. They could also be called "Schools of Marxism-Leninism". In reality, what is studied in the Schools of Revolutionary Instruction is Marxism-Leninism. Moreover, the only thing that can be studied in a School of Revolutionary Instruction is Marxism-Leninism.

However, in that school, one can also study other things that are not Marxism-Leninism. If, for example, they have a class on the history of various political ideas, and they study the ideas of imperialism, including its most reactionary phase, which is fascism, they are also studying fascism to understand what fascism is and how it compares to our ideas.

Therefore, the School of Revolutionary Instruction implies a broader concept than what would be a school of Marxism-Leninism, because, in reality, all those ideas will be studied; but they are also studied from a Marxist-Leninist perspective, from a Marxist-Leninist understanding of history, society, and nature. For this reason, they could also be called Marxist-Leninist schools.

However, if when the schools were founded it had been stated, "They will be schools of Marxism-Leninism," some people would still have conditioned reflexes against Marxism-Leninism, reflexes that are being removed over time. Hence, the term "revolutionary instruction" could be a more appropriate designation for what the schools are.

=== [Educando a las masas] ===
Of course, no one is being deceived; no one has ever been deceived here; we have never deceived anyone. What have we done? We understand that reality and have acted in a Marxist-Leninist manner. That is, we have acted while taking objective conditions into account. Indeed, if we had stood on Pico Turquino when we were just a handful and said, "We are Marxist-Leninists" — from Pico Turquino — we probably wouldn’t have been able to come down to the plain. So we named it differently.

We didn’t address that topic; we posed other issues that people perfectly understood. We told that peasant: "Look, this company is exploiting you". Those peasants knew it; they lived in constant fear of losing their lands, paths... to the overseers. We would arrive, capture an abusive overseer, one of those murderers, and execute him. That was perfectly understood by the peasant. "We will give you land; you won’t have to pay anything; we will establish a school". Well, yes, all of that is Marxism-Leninism. All the revolutionary laws since the cooperatives began to form, the farms... The agrarian law itself, if one studies agrarian reform through the agrarian law, then no one would understand agrarian reform.

In agrarian reform, cooperatives are already discussed. The concept of a cooperative was introduced in the agrarian reform plan, while traveling there, in the modifications to be introduced. It was debated whether land should be given in ownership or in usufruct. So... well, the reality will be the same, but we’ll state it not in usufruct, we will say — precisely so that enemies cannot take advantage of this — the property of the land of the cooperative. In reality, what the cooperative has is the usufruct of the land. Thus, a concept of ownership equivalent to usufruct, which ultimately is the same thing, since the cooperative cannot sell that land; of course, it can use and exploit it.

Now, at a certain moment in a revolutionary process, there exists what is called — and you know perfectly well — the correlation of forces. Therefore, one must act with a keen awareness of the correlation of forces. Furthermore, a revolutionary process is a change, but it is not only a change of institutions; the revolutionary process is also a change of mentality. In a revolution, one not only does but teaches: one teaches by doing and does by teaching.

That is to say, it should not be assumed that for a revolution to take place, it is necessary that everyone be, first of all, a Marxist-Leninist. No, sir. For a revolution to occur, the objective conditions that make a revolution possible must be present, according to the Marxist-Leninist conception. It goes without saying that throughout history there have been many revolutions, and that revolutions occurred even when the science, doctrine, or theory of Marxism-Leninism did not exist.

In other words, it was only in the later stages of humanity's development that a revolutionary class, the working class, could rely — thanks to the efforts of the great masters of socialism — on a scientific theory, which is a very effective tool for understanding, interpreting, and, at the same time, for acting. But the revolutionary processes prior to the proletariat's struggle against capitalism did not have a prior Marxist-Leninist interpretation. That is to say, those who carried out those revolutions did not act with the Marxist-Leninist doctrine in hand. It was Marxism-Leninism that later explained the reasons behind those revolutions; just as later, for example, physics explained the Law of Gravity. Then, finally, it was understood why bodies suspended in space fell.

In the same way, revolutions have occurred throughout human history, since ancient times, even when no one had yet adequately explained why revolutions happened, how human society developed, and what their causes were.

Marx and Engels discovered the reasons for revolutions, uncovering the rationale for the progression of human society, just as Newton discovered the Law of Gravity. But revolutions had been happening for millennia, in accordance with the Law of Gravity, although people could not explain why bodies fell.

Likewise, revolutions have been unfolding throughout the history of humanity, since ancient times, although no one had yet adequately explained why they occurred, and how human society developed, what their causes were.

Now, unconsciously, revolutions occurred in ancient times. The slaves who rebelled, led by Spartacus, against the Roman slave owners were acting according to a historical law, according to the principle of class struggle. It was an exploited class, the slaves, fighting against the slave owners. The peasants who revolted in the Middle Ages were also acting according to the law of history; the principle of class struggle and the evolution of human society through class struggle were being fulfilled in them.

In other words, from the most remote times, men were acting according to these laws of history. But they did not know it; they acted unconsciously according to these laws.

Now, in the first stage of the Cuban Revolution, the consciousness of a series of historical laws, the great truth of the theory of class struggle, the great truth of the inevitability of overcoming the current capitalist system... that was known by a conscious minority of the people. We, who had in our hands... What was our great advantage? What distinguished us from a bourgeois liberal? What distinguished us from others who organized conspiracies with the military and various other things? Well, it was a series of fundamental knowledge, several elementary truths of Marxism-Leninism. That is to say, we had that knowledge.

If we had not known or believed in the theory of class struggle, we simply would not have been able to act; we would have acted incorrectly, we would have been dragged to failure if we had been ignorant of that.

For example, one influential reading during my student years was the book "The State and Revolution," which gave a thorough explanation of how that apparatus of force... that as long as the force apparatus on which the dominant class, the exploiting class, relies is not destroyed, there can simply be no revolution.

This was the conception that led us to incessantly combat the idea of conspiracy with the military; it was what made us, even when we were just a little over a hundred men, write an article against the military. They said we were crazy, that we would make it impossible for Batista to ever fall, that Batista would benefit from this because it united the army. We understood that it was much better to have a revolution against the army and a revolution that would dismantle that military apparatus than to have a revolution with that military apparatus, because the history of Latin America taught us that the military apparatus, often being the cause of exploitation, also served as an instrument to deceive the masses, who attributed their exploitation not to a class but to the actions of corrupt rulers, when, in reality, it was nothing more than the consequences of a regime of exploitation.

And so, the army would come, removing those individuals, and often the armies themselves, maintainers of domination, when removing individuals would confuse the masses, fostering false hopes. And then, that same army was responsible — once the tempers had calmed — for maintaining the regime of exploitation, which is ultimately what matters to the politicians of the exploiting class.

The idea that the military apparatus had to be destroyed was a fundamental idea; without it, we would have been disqualified from acting as revolutionaries; the idea of class struggle, the idea that it is the masses that make history, the idea that only with the masses could power be conquered. This was demonstrated by the very fact that we were not concerned about how many of us there were; we were focused on creating the conditions to rally the masses toward a struggle based on the existing conditions of exploitation.

The people were exploited, but often a large part of the population did not fully understand the reasons for their misery, their poverty, the lack of schools, the lack of hospitals, the lack of factories, the lack of jobs... they suffered all of that. They often attributed it to bad governments. But those governments could not be good in any way; those governments, from Estrada Palma to the last, were governments that represented the interests of a dominant class, of an exploiting class. So, there were many people who rebelled against all that, but they did not have a clear conscience of where the root of all that was. The objective conditions existed. Good. Based on that knowledge of those realities, we acted. The Cuban Revolution, one can say, is a complete, absolutely complete proof of all the truth contained in the Marxist-Leninist conception of society and history. Without those fundamental truths we would not have even started, without those fundamental truths we would have taken a series of wrong paths.

=== [El marxista-leninista nunca deja de aprender...] ===
Well, were we complete Marxist-Leninists? No, we were not complete Marxist-Leninists. I was, for example, a kind of Marxist-Leninist who had clung to a few ideas that I had taken from Marxism-Leninism in my formative stage—and, by the way, it was a formative stage—a series of things that I believed to be fundamental truths, and I adjusted my action to those fundamental truths. I believe that the complete revolutionary is made over the years; and any of us who still believed that he was a complete revolutionary, would first have to make a strong self-criticism, an analysis of all his actions, his conduct, his behavior, his performance, in order to then see if he feels satisfied when all the defects that, even when we believe ourselves to be very revolutionary, we still have are answered. Sometimes we can believe ourselves to be very revolutionary, but we still have many things to learn from the Revolution. And it is the great truth that the more we study, the more we penetrate into the depths of the problems, the more we understand history and all that has been the history of abuses, injustices and exploitation; the more we know imperialism, not theoretically, but because we are constantly enduring its attacks, its aggressions, its felonies: like when we see a small group disembark, trying to infiltrate to blow up ships, blow up bridges; when we see them kill a brigade member who is teaching; when we see them launch an invasion; when we see the measures they take so that we cannot even buy oil… you see that there have been oil problems lately. But the fact is that their fight against us is a tireless fight: wherever they can hit us, at any sensitive point, they do not rest until they do so. Understanding all these things, living all these things, must make us all, and each one of us, more revolutionary every day. I say that today I am more revolutionary than yesterday, and I am sure that tomorrow I will be even more revolutionary than today! (APPLAUSE.) What makes us more revolutionary? What makes us feel more revolutionary? What makes us feel more passionately about the Revolution? Simply the ever more in-depth knowledge of the Revolution; the ever more in-depth knowledge of revolutionary problems; the ever more in-depth knowledge of revolutionary theory; the ever more in-depth knowledge of revolutionary doctrine. Because even though many problems have already had a complete explanation for us, there are still many others that we have not even worried about and for which we do not have a complete explanation, and that, in contact with books, in study, we are finding more and more explanations for things that many times we had not even considered. But it makes us see more and more the richness of the entire Marxist-Leninist conception of society, nature and history, and how it has an explanation for absolutely all the problems that human intelligence can pose, and how it has a satisfactory explanation, and how it is a living doctrine, how it is not a dead scheme, how it is a body of knowledge that is enriched day by day, how it not only offers us the wealth of knowledge, of research, of discoveries made by the great masters, those made by the great disciples of those first masters of socialism, the contribution made by hundreds of millions of men. Because that doctrine, that explanation that began as the fruit of the effort of two great masters, two great philosophers, two great historians, two great economists, two great sociologists - who were Marx and Engels -, to which was later added the great wealth of knowledge contributed by Lenin, was later added the great wealth of knowledge of hundreds of millions of human beings who have been working in socialism and have been acquiring an extraordinary experience. That is why Marxism is enriched: because the contribution of the first men is added to the contribution of millions of men; it is the experience of entire communities working along that path, who every day find new things, discover new things, and enrich that entire philosophy. I will tell you that one of the problems that we had in our first stage of the Revolution was this: there were many good people, well-intentioned, but who had prejudices, they had anti-communist prejudices, they had a series of mistakes, they had a series of deviations. But they were honest people, and you could see that these people, if they had a just, correct flag to fight for, would have embraced it. Simply, they were people who were not prepared. There were many of them, many of them were discovered. At the same time, when they raised the problem: "Well, what's the program going to be?" So, apparently there were people who believed that a few cats can, in these times, make a revolutionary program; as you analyze that, you understand how ridiculous is the pretension, which we have often encountered, of individuals trying to make a revolutionary theory. First of all, the revolutionary theory, the beginning of Marxism-Leninism was the work of two great geniuses, but not only of two great minds; it also needed two men of boundless generosity, of a boundless spirit of sacrifice, of a love of justice, of a hatred of exploitation, also boundless. And so, it kept accumulating. And that is the great advantage, the extraordinary advantage of Marxism-Leninism: that it has accumulated knowledge for 100 years, to the point of being today a revolutionary theory that admits no rival, that possesses a superiority over everything that has been written, from Utopian Socialism, from all those purely idealistic conceptions of history and society, to the ideas of the bourgeoisie, which are already so weak, so inconsistent, that no bourgeois will ever be able to stand in front of a Marxist-Leninist and argue! Never a utopian, never an idealist - idealist in the sense not of an idealist who conceives a real, possible ideal, but of those deluded idealists who are not based on reality, but are based on illusions - never a philosophical idealist of those kinds will be able to argue against a Marxist-Leninist! The weakness of ideas becomes more evident every day, and it becomes more evident every day in the struggle of ideas. Because, of course, just because they are weak does not mean that they will disappear on their own, because when you have generations of men being fed a whole series of lies by all possible means, and that man does not have even a ray of light to illuminate his intelligence and give him an explanation, it is logical that this mentality becomes completely confused, completely deviated. So there is a theory that has existed for 100 years, founded by geniuses and enriched by geniuses as well and, at the same time, enriched by the genius of millions of human beings. When someone came to ask "when are we going to make a program?," in the confusion of not seeing the bottom of the Revolution, we thought, to ourselves: "How little pretension to try to make a program! How are we going to discover a program?" There were many people who had the idea that a program had to be invented. How can we invent a political program when there is a revolutionary doctrine founded 100 years ago, and extraordinarily enriched, that has a complete explanation of all the problems that may interest a people, of all the problems that may interest anyone with a revolutionary vocation? That is the great advantage of having reached the point where the initial contradictions were resolved. What were the initial contradictions of the revolutionary process? A revolution that was, in fact, entirely revolutionary; a revolution that was, in fact, entirely Marxist, but that, in its formal formulation, did not present itself as such a Marxist-Leninist revolution. That was, naturally, a contradiction that brought confusion, problems; a contradiction that corresponded to a correlation of forces that existed in the first stage of the Revolution, when the armed struggle began. When the armed struggle began, the balance of forces was practically 1,000 to 1 in favour of imperialism, in favour of the capitalists, in favour of the landowners, in favour of all the bourgeoisie, in favour of the reaction, a thousand to one! As the guerrilla movement grew, the balance changed; when the war ended, the balance had changed considerably, but it can be said that the balance of forces was still favourable to imperialism, to the reaction, to the capitalists, to the landowners, simply to the existing system of exploitation: they still had all the vehicles of dissemination of radio and television, newspapers, magazines, cable agencies, in short, they had means that made the balance of forces even greater than this.

=== [Resolución de las contradicciones] ===
With the same revolutionary process, as the revolutionary laws strike at the economic base of the ruling class, and liquidate the interests of the landowners, the homeowners, the owners of large industries, and liquidate the economic base of imperialism, and promote an ever greater enthusiasm in the masses, an ever more conscious enthusiasm, so that that enthusiasm that was simple admiration for the men who fought the army face to face, simple admiration for the epic or epic part of the struggle, is becoming a conscious adhesion to the revolutionary movement that is, effectively, carrying out a firm policy against the exploiters and in favor of the exploited.

In this way, with the revolutionary process, the contradiction was resolved. Today this contradiction has been resolved; today it is a Marxist-Leninist revolution, in fact, and, furthermore, a Marxist-Leninist revolution, in law and ideology. That is the solution, the synthesis, one might say, of that contradiction of the first stage, a contradiction that arose from an unequal correlation of forces between the revolutionaries and the reactionaries, between the exploited and the exploiters. Today we have a tremendous advantage, the fact that we can make a revolution using all the resources of ideology. In the first stage, these were the resources of facts: a law that tells the peasants: "Don't pay more land," wonderful! A law that tells the neighbors: "Pay 50% of the rent," wonderful! A law that tells the population: "Reduce electricity rates, reduce tariffs". A law that tells the entire population: "Open all beaches to all men, without distinction of color or prejudice of any kind".

All these measures were facts that were teaching. But although facts have great value, and facts teach, and that is why we learn so much in a revolution, because the facts accompany the theory, theory has, at the same time, an extraordinary value. That is to say, we had the advantage of facts, but we did not have the advantage of theory. Today, revolutionary theory and revolutionary facts are already combined; today, we can do what we could not do in those days; today, we can win hundreds of thousands of people to conscious work; today, everyone works with much greater confidence… And then the work of instruction, of spreading revolutionary ideas, can be made incomparably easier.

Well, schools are the result of this synthesis in which, at last, theory and facts go absolutely in line, as they must go. And so now, through the schools, we are going to take advantage of the extraordinary resources of revolutionary theory, the extraordinary resources of theory, so that each person understands the why of the facts, and understands the theory of the Revolution, the ideology of the Revolution; understands the why of the social problems, of the national problems, of the international problems, of all the problems.

And then, the thrust of the Revolution, with the advance of the revolutionary ideology, will be extraordinary.

We too will be able to enjoy the advantage that more and more men and women will consciously join the revolutionary work.

At the beginning, we were doing socialism, in many cases, with petty bourgeois; because a people's farm managed by an individual with a petty bourgeois mentality was a tremendous headache, because that mentality is accompanied by waste, lack of a sense of planning, lack of a whole series of elements that are indispensable for a socialist institution to function well.

Now we will reach the point where everyone who is on a people's farm, in a cooperative, in any task of the Revolution, will be acting with a clear awareness of what he is doing and with a revolutionary mentality. The task of the schools, the fundamental task of the schools is, quite simply, the ideological formation of the revolutionaries and, in turn, of the people.

In that sense, we already have the fruits of the work of this year of revolutionary instruction, because more than 20,000 have passed or are already passing... more than 20,000 have passed, and between those who have passed through the schools and those who are currently studying there are some 30,000 people. That means a tremendous boost to revolutionary ideology.

Of course, the people are learning; the people are learning in every pamphlet, in every speech, in every event, you can say that there are millions of people today who understand many of the problems of Marxism-Leninism. But school means systematic study, that is what school means. And systematic study has a great advantage over the

Whenever you open a book or a manual, you are surprised from the very first moment; you begin to find many explanations that are even clearer for things that you saw more or less clearly. Sometimes you find things that you had thought about completely beforehand. And sometimes it has happened to me, when I was reading a manual and I found some things that seemed like I had read the manual first and then talked about them; sometimes I have found such a great coincidence between something expressed as a result of experience and what I had read, that it seemed as if I had read it first and said it.

Whenever you find that, naturally, you feel satisfied. Why? Because you see that the orientation, the analysis that you have been doing is true, is correct, and you receive that security especially when you find many of those things thought or said, expressed in a manual. Because, after all, these manuals also express experiences that other peoples and other men have had.

Why is it so important for the people to learn? First of all, of course all this strengthens the Revolution, it makes conscious revolutionaries. A revolutionary who is conscious of what he is doing will be more useful in all areas than a revolutionary who is very enthusiastic, very good-willed, but who does not understand. Logically, wherever this conscious revolutionary is, in any political, administrative, economic, or military task, he will be incomparably superior to one who may have enthusiasm but cannot have understanding and knowledge of the problems.

Well, all this is very important. Anyone can answer: "Well, it is necessary for all the people to know, so that the Revolution is stronger, so that the Revolution can resist imperialism, so that the counterrevolution does not gain followers, so that the counterrevolution is increasingly weaker," all these things. Well, this is very important, because this has to do with the very existence and life of the Revolution; But there is something even more important than all that: revolutionary instruction is not a matter of amateurs, it is not simply a matter of satisfying a curiosity to know, it is not a matter of bringing to the minds of people a teaching so that they know more; it is a matter of the fact that the dissemination of revolutionary ideas incorporates the masses into the creative task of the Revolution. We do not teach simply to satisfy a curiosity, we teach to gain intelligence and effort for the task of making the Revolution, for the task of creating the Revolution.

Why? Because the Revolution is the work of the masses. The Revolution has to be the work of the masses; the Revolution has to take advantage of the wealth of energy of millions of people, the wealth of intelligence of millions of people. It is not a matter of simply stating this because it appears in a manual, no sir; this is a great truth, this is a truth that we are constantly seeing.

Sometimes, to see things better, a concrete example is useful, and I give you the case of the sewing girls. Okay, we are going to teach a few thousand girls how to sew. How many teachers are there in sewing? You gather about 300 or 400 teachers who know how to sew; you give them some preliminary courses, you prepare them, and now you have 400 to teach several thousand. Well, you had about 30 or 40 to teach the first 1,000. When there were no longer 1,000, but several thousand, you used some of the girls who had learned in that first school, and they were used as teachers for the others; that is to say, there were no longer 40, but several hundred. So, those several hundred taught more than 10,000. Now, those 10,000 go and teach 100,000.

Okay, can you compare the potential educational potential, the effort of 40 people, with the effort of 10,000 people? When 10,000 people have joined, the strength and the potential of the Revolution have grown extraordinarily, because there are now 10,000 people teaching. Good. Was it the same to teach the people to read and write with 20,000 teachers as it was to mobilize 100,000 brigade members and mobilize 100,000 more literacy teachers? It was not possible with 20,000 teachers to accomplish a feat of that nature. How can that feat be accomplished? Simply, with the masses. Is there a clearer example than that of what the strength, the power, and the creative capacity of the masses are?

Now then: Can we, the leaders of the Revolution, be credited with the literacy campaign? Could a group of leaders teach 700,000 people to read and write? Have we, the leaders, been the ones to teach 700,000 people to read and write? No. That is a fiction. Anyone will say: "Look what merit he has"

In the revolutionary leaders, what government, which has made people literate!"

So, where is the reality of the problem? Where is the great truth? It was not us who made 700,000 people literate, it was the mass of brigadiers who made the 700,000 people literate, who can doubt that? Then, it is not the leaders who make history, it is the masses who make history.

It was the masses who taught thousands of teachers; those thousands of teachers will possibly teach hundreds of thousands. It was the masses who made that people literate; now, that literate people doubles its effort, doubles its culture, doubles its revolutionary consciousness, and launches itself towards new tasks.

The leaders act by correctly interpreting the laws of history, the laws of Marxism-Leninism, the Marxist-Leninist conception, applied to each concrete situation. The leaders have a role, that is Unquestionably, Marxism-Leninism does not deny the role of leaders. But the great truth, and what we are interested in pointing out here, is that it is the masses who make the revolution, it is the masses who make history. And so, when we propose that the masses learn, that the masses learn Marxism-Leninism, that the masses acquire a revolutionary ideology, we are doing in the most important order, which is in the ideological order, the same thing that we are doing in all the other orders: when we make teachers of cutting and sewing, when we teach hundreds of thousands of people to read and write, when we prepare teachers, technicians, farmers; in short, we are then preparing the masses ideologically.

And so, in the same way that there would be nothing that could replace the effort of 100,000 brigade members, there will be no book, there will be no leaders, who can replace the effort of tens of thousands, of hundreds of thousands of ideologically trained revolutionaries. Just as 100 officials from the Ministry of Education would not have been able to teach people to read and write, that is, to do the work equivalent to teaching 1,000 people, in the same way, revolutionary leaders will never be able to do the revolutionary work of hundreds of thousands of revolutionaries.

And that is what it is all about. The Revolution has to incorporate the masses, the masses have an extraordinary force, an extraordinary wealth of energy, an extraordinary wealth of experience. And that is understood not only in these examples, but in anything. Think of the work of those who are, for example, in the fields, at 12:00 noon, picking taro; those who are taking care of the cattle, those who are transporting them, those who are slaughtering them, those who are distributing them; those who work in the textile factories, those who work in the shoe factories, those who work in the newspaper printing presses, those who are producing all the things that we are consuming. Think that without that work of the masses, we could not even be gathered here! You have been brought here by the workers of the transport services, the train drivers, the airplane drivers, the bus drivers; you have stayed in the hotels, you have been able to meet. All this can be done simply by the creative work of the masses, by the productive work of the masses, without which this work of ours could not even be done. This work is done on the basis of the masses.

It is the masses who clothe us, shoe us, feed us and serve us. So the masses are there, at the bottom of all the work of the Revolution, at the bottom of all the work of history. Who are those who deny this? The reactionaries, the individuals who preach the thesis of the super-privileged, of the super-men, of the super-chosen. Why? Because the ideology of the exploiters is interested in denying the masses in every way, and it is precisely the revolutionary ideology that vindicates the role that the masses have in history, and in the development of history, and in the advancement of humanity.

If this is understood, then there will be a correct appreciation of the extraordinary value of the Schools of Revolutionary Instruction.

Now, it turns out that all these ideas are known to the people; that gives the people more confidence, that gives the people more security, to each man, it gives him a sense of his extraordinary importance; because then each man thinks: "No, I have to make the Revolution too, I am obliged to make the Revolution!" I am not going to let these problems be resolved by the leaders, the directors, the administrators, but each one in the place where he is, is consciously working for the Revolution, making the Revolution.

It is very important that each student leaves the schools of Marxism-Leninism, or the Schools of Revolutionary Instruction, with a clear idea of what Marxism-Leninism is. Not with a

n thorough and profound knowledge, this knowledge will be acquired over the years, this knowledge must be acquired by all of us over the years. It is important that they at least know the ABC, it is important that they at least know the fundamental principles and leave with an orientation, so that they can continue in their work of revolutionary intellectual development.

It is important, above all, that they understand that Marxism-Leninism is not a dead doctrine, that it is not a catechism, that it is not a little scheme, that it comes and is applied to any problem; that it is not a series of uniforms or models of clothing that are chosen for this case or for that case, but that it is a method, it is a guide, it is an instrument that, precisely, the revolutionary has to use in the concrete solution of the problems that are presented to him. It is a living doctrine, that the individual puts together, prepares, trains, leads to adequately resolve the problems; Otherwise, they become dogmatic revolutionaries, otherwise they become brain-dead, and brains have to be living brains, to apply living formulas to each concrete problem they have.

Everyone who goes through school must leave with this idea, with the purpose of thinking, of reasoning according to the dialectical method of analyzing problems. That is to say, men, comrades, have to leave school with this conception: "Do not think that you are going to learn a formula or a recipe book, but that you are going to prepare your intelligence, your body of knowledge, your concepts, that you are going to be armed with norms and methods, to apply them to real life"; because real life is varied, and you yourselves will have read in the introduction of any book on Marxism-Leninism that the material is infinite, and at the same time it is infinitely varied. Everything that you are going to encounter in life is, quite simply, infinitely varied, and that is where you have to apply the intelligence, the method, the adequate norms to solve these problems.

It is necessary for every Marxist-Leninist to understand that he can contribute an atom of his experience to Marxism-Leninism, that every solution he finds, every experience he gains in the correct solution of a problem, will be one more experience with which he enriches Marxism-Leninism, because Marxism-Leninism has been so enriched precisely by the experience of millions and millions of Marxist-Leninists acting in the reality of life. In addition, the idea that every Marxist-Leninist should have is that problems are infinite, that problems are varied, and that life will constantly present us with new problems, new tasks.

=== [De los problemas actuales y futuros] ===
No one should be discouraged by the thought that life's problems are over, that life will become horribly boring, because everything will be solved, everything will be done. False. With each stage that humanity reaches, with each achievement that humanity conquers, new goals, new aspirations, new achievements will be presented to it... Of course... they will no longer resemble the current problems that humanity has, the first of which is, quite simply, to abolish the exploitation of man by man and to eliminate all the obstacles that impede the development of human society. But human society will always have new and new problems.

We revolutionaries, at this moment, have our problem; in 10 years, revolutionaries will have other problems; in 20 years, revolutionaries will have other problems, and in 30 and 40 years; this is demonstrated by the history of the Soviet Union itself, how there are new and new tasks and problems that must be overcome, and that is why the learning process must also be constant. There is no doubt that the political and revolutionary education that the people will have in 20 years will be incomparably superior to ours; there is no doubt that the defects that they will have will be less than those that we have now.

Now, of course, we have to maintain one thing for the future: that this revolutionary incentive, this desire to fight, to create, to do, is maintained and never goes to sleep, and it does not have to go to sleep; because in the revolutions prior to the socialist revolution, what killed the initial impulse of the revolutions after a few years was, simply, the regime of exploitation of some classes by others, and then exploitation brought about the consequence that it killed enthusiasm, it killed the spirit, it killed everything.

Anyone who looks now at the problem of the discussion of the program for the construction of communism in the Soviet Union realizes that there is a renewed enthusiasm there; It seems as if the whole revolutionary spirit had been awakened in 1917. That is to say, they are launching themselves into a new task with the same fresh enthusiasm with which they launched themselves into the first task; this notwithstanding the problems that arose from a series of vices that have been considered as the vices inherent to the cult of personality, in all these years of building socialism.

That is to say, after 40 years of revolution, they have managed to present themselves to the realization of a task, with the revolutionary enthusiasm of the first years, and I have not the slightest doubt, because I firmly believe that what can be done with an apparatus can be done ten times better, a hundred times better, when the masses are acting and creating the masses, when the apparatus is, simply, the incentive, the direction and the stimulus of the work of the masses.

Look at the enthusiasm in the Soviet Union — despite all those problems — this renewed enthusiasm in this new phase. When you read the discussions that took place at the last Congress, the participation of collective farms, state farm leaders, business leaders, planners, educators, artists, workers at all levels, manual and intellectual, you can see how the working spirit of millions of people is really in full swing.

Now I will tell you one thing: neither repression, nor punishment, nor any kind of measures can rectify errors as they can be rectified by the efforts of the masses. There is no instruction, no directive, no exhortation to not do this problem like this, but in another way, to achieve its fulfillment as it is achieved when you go to the masses. Sometimes a group of ministers meets, discusses a series of instructions, agrees on them, and they are not even fulfilled; on the other hand, when any problem is brought to the masses, then every problem is solved.

In the same literacy campaign, during the first few months it progressed, but it progressed slowly. When does the literacy campaign come to fruition? Simply, when everyone takes hold of that campaign: Young Rebels, unions, Defense Committees, Women's Federation... When all the mass organizations make the campaign their own and it becomes a matter of honor for all the factories, all the associations, all the mass organizations, then the campaign takes on an unusual pace, surprising even for ourselves, because it begins to roll, it begins to gain strength, and suddenly, when you can see what an idea has gained, it is truly astonishing.

In the same way, we can launch a thousand ideas through an administrative apparatus to organize, for example, small research stations on farms; well, we can do it a thousand times; it may be that after a year there are 20 farms - out of 600 - that

They have a small research station. Ah, but when this proposal is made to all the workers in all the farms in the village, and the slogan is put forward to organize brigades of vanguard workers to carry out all this, then it is quite possible that within a year there will not be a single farm that does not have a small research station and a group of vanguard workers. If you try to achieve this through national administration, through circulars, through administrative work, it will never be achieved, but it is achieved with the masses.

All vices must be combated with the masses. Individualistic methods of administration, lack of collective method, you must go to the masses and propose this; lack of technical spirit, you must go to the masses and propose this; lack of accounting, you must go to the masses and propose this. When the masses have all these ideas and all these slogans in their hands, there is no one who can resist the fulfillment of these norms. Neither repression nor punishment.... Punishment, of course, must be applied - some kind of punishment - to those who do not comply, some kind of sanction, but, in the long run, nothing will have as good an effect as when it is carried out with the support of the masses and by appealing to the masses.

This applies to everything, even to repression against counterrevolutionaries. Today, repression, the terror applied to counterrevolutionaries, is something that belongs to the entire mass of the people. Would it have been the same if all the shooting measures, the drastic measures, had emanated from directives of the Revolutionary Government, simply because, analyzing things theoretically, it came to the understanding that it had to be done to defend the Revolution, without the masses understanding it? It may be that then the shootings would have been hated; because the shootings were always hated; Because the execution, with everything that we had associated it with…: such-and-such patriot shot, such-and-such patriot shot, the students of 1871 shot; these were the executions that the exploiters carried out against the exploited who rebelled, and they represented all the abuse of force, colonial power, all those things.

However, today drastic measures are being applied to the counterrevolutionaries, the extermination of every counterrevolutionary who appears fighting the Revolution with weapons, of every worm who infiltrates here.

So, where does this measure come from? It comes from a conviction of all the people; it is all the people who demand this; it is all the people convinced of this. Well, simply, there you have another example.

If the revolutionary leadership advances above the feeling of the masses, or above the conviction that the masses have about the application of a certain measure, then that would have been a mistake. But how completely different it is when it is the masses that are calling for this measure, demanding this measure, promoting this measure! The result is then that the counter-revolutionaries will simply disappear here, because then they are fighting against something that is very serious: they are fighting against the verdict of an entire people, against the measures that are being taken against them in the name of an entire people.

That is why, comrades, the work of revolutionary instruction is so important; the work of spreading revolutionary ideas; the importance it has now and will always have, because we have to keep revolutionary enthusiasm alive, that this enthusiasm grows ever greater, that this enthusiasm is born from the pioneers, continues in the Young Rebels, in the instruction circles, and then continues in the workplaces. Because there is no contradiction that allows, or explains, or causes the weakening of that enthusiasm or the death of that enthusiasm, because with all forms of exploitation disappearing, the result will be that every day there will be better conditions for all those incentives to awaken in the people.

And there is no reason why there should be absolutely nothing in the Cuban Revolution that kills that incentive. Also, think how solid the Revolution will be more and more, to the same extent that the destiny of the country, the destiny of the Revolution, the future of the homeland is in the hands of millions of Cubans; how the people will feel more and more secure with that.

And that is, in my opinion, the greatest value that the Schools of Revolutionary Instruction have. I am not going to talk to you any more, I simply wanted to take advantage of these minutes that I had available to raise these things with you and to urge you, who are working in that field, to study.

The most important duty that you have, in order to be able to teach better and work better in schools, is to improve yourselves. Is there anyone here who thinks that he or she does not have to study any more? (SHOUTS OF: "No!") Well, then.

What you have to do is acquire a library, rereading all the books you have read, because the second time you get more out of them than the first, the third time you get more out of them than the second, and the fourth time more out of them than the third (APPLAUSE).

Whatever you have read, read it again, study it again; whatever you have not read, read it; whatever you have not studied, study it; and each time you expand your knowledge more. And you have to study everything; first the basics, the fundamentals, and then expand your knowledge as the possibilities present themselves.

How many times do we not pass by the libraries and see so many books, and sometimes feel the desire to read not only all the works that speak of revolutionary and political problems, but all the classic works of universal literature? And we think: Why are those books there, if we do not even have time to read them?

There was an idea of some mobile libraries at the Culture Council, and I was very amused when they explained to me that they were asking for some mobile libraries. I said: "Well, but what are the bookmobiles for? Are they going to take a bookmobile to a park from 4:00 to 6:00 in the afternoon? Is there any citizen who can read Capital in a park from 4:00 to 6:00 in the afternoon, waiting for the bookmobile to arrive?" I didn't understand; this doesn't mean that I'm condemning the bookmobile, I just asked them to explain to me what a bookmobile was, and what it was used for. Then came the theory that it was to take books to libraries and replace them; well, that's a book transport truck, but it's not a bookmobile; but I found it funny.

We have to promote the formation of libraries, first with all the classic works, fundamental works, the clearest works. It is indisputable that as soon as the national printing press is up and running and prints a whole series of books... because there are some books that are better than others; there are some manuals that are better than others, and there are some books that are better than others. They explain things more clearly than others, they are more assimilable; and in this it is always essential to go from the simple to the complex, from the easiest to the most difficult. But it is good to promote the greatest number of libraries possible; first those in schools; your books too, where you work and study; libraries in cooperatives, on farms.

It would be good to promote some list of books, to make an effort for the School of Revolutionary Instruction with the national printing press so that tens of thousands of libraries are formed; tens of thousands of libraries everywhere: in factories, in circles, in cooperatives, peasant associations, in Defense Committees, libraries are formed everywhere, with books on revolutionary questions, with revolutionary literature. Because there is also a way of explaining, and cinema, literature, art teach us; all these are ways of creating political and revolutionary culture.

But above all, you must try to specialize. Comrade Lionel explained to us that one of the problems he has is that later the cadres in the schools are changed, and when they have already acquired a little experience, they are changed, they are asked for something else; that it is necessary for the cadres to remain. And that is true. The experience that a school director has in the second course is greater than in the first, in the third course greater than in the second and in the first, in the third course greater than in the second and so on with each course that passes. You are acquiring more experience about the general difficulties, the most common ones, the problems of all kinds that arise in a school. That is to say that you must specialize.

Also from the courses of revolutionary instruction you must choose the comrades who show a greater vocation for teaching, but that, in the end, you have to specialize. And we must ensure that they are not changed from the work they are doing, unless they really prefer another job, or have no real vocation for this work, and then it is convenient to change them; but not to change them because they are more needed somewhere else, or because they believe that they are more needed somewhere else.

That is to say, you have to go on specializing and, at the same time that you are specializing pedagogically, you must also go on improving yourselves intellectually, through study; go on improving yourselves incessantly; go on improving yourselves on your own; go on improving yourselves through special courses; go on improving yourselves through institutes, because we will also have to found here the Institute of Marxism-Leninism, a higher institute (APPLAUSE), a higher center of studies.

And in this way we will have a specialized body of directors and teachers. I believe that, really, it is a very useful job, a very interesting job.

I really believe that the work you have is a pleasant job. And the work your students have is even more pleasant.

I really sometimes feel like spending six or eight months in a School of Revolutionary Instruction (APPLAUSE), because the truth is that when all of us were forced to study, as children, young people and adolescents, we still didn't even really understand why we had to study. And, furthermore, it was an almost obligatory study. It's not the same when one faces life, and then understands the tremendous need to study, to understand, to penetrate deeply into the problems, and an opportunity presents itself.

Think what it means for a revolutionary, for an adult person; to some it will seem like a strange thing: "Look, a man with children, put there as a pupil in the school". No, the strangeness is not in that; The rarity is in the privilege that it implies for a man, after having children and all that, to be able to study and dedicate all the hours of the day to studying. That is not a rarity for a man, that is an extraordinary privilege.

When a man is already burdened with many family and domestic commitments, who has to support his children and his family, then he has the opportunity, when no one else has it, because what I remember as a boy is that I heard the adults say: "Oh, if only I could study, if only I were a boy again and could go to school". And what happens? It is that the longing of people who, because they were from a very humble family, because they had to work, because they did not have school, they saw that others went to study, that others had time, that others had resources; and now they are presented with the opportunity to study in a school. That is, truly, a privilege for any citizen, and the proof that it is a real privilege is shown by the fact that everyone wants to enter the School of Revolutionary Instruction. There is a very interesting phenomenon, and it is the following: I have seen people who I would never have believed had the slightest interest in a book, making arrangements to enter the Schools of Revolutionary Instruction; relatives, worried about their entering the School of Revolutionary Instruction, because it is no longer their concern alone: it is that of the woman, of the brother, of the sister, of the father, of the friends, of everyone.

And men who I believe had never in their life worried about studying and who were, in addition, a little disorganized, worried about entering a School of Revolutionary Instruction, with the privilege of being able to start studying after they are old - this because I call the boys old since they are not 15 or 14 years old, that is, after they are grown - this of being able to start studying after they are grown is not only a privilege that attracts, and because of which the desire to study increases, but there is also another feeling that is pushing people to study, and it is the concern of not being left behind. You will have heard that the expression "I don't want to be left behind" is popular. So there are people who are aware that the Revolution is advancing, the people are advancing, and that anyone who does not improve themselves, anyone who does not study, runs the risk of being left behind.

These two things have come together to awaken interest in studying. Now, we have to make good use of these two feelings. And in school, in addition to teaching them the theoretical part, we also teach them to act in a spirit of camaraderie, as I have seen in some schools where, really, people are transformed, people are transformed in school and learn to live, to live in ways that are absolutely different from those they were used to, they learn to study in a disciplined manner; they learn to stay up at night studying, which is also a fantastic method of self-discipline that is so important in a revolution, because the revolutionary has to be a slave to his obligations; and so, teach them all these things, but also teach them practical things.

It would also be good if, at school, from time to time, they visited a farm, found out how the accounting is, the costs, if they have advance brigades, if they use insemination, if not when they are going to use it; all the problems of the economy. Go to a factory another day, go to a school another day. The problem is that they learn things about practical life, as well as about the Revolution, in addition to theory; criticize everything that is wrong; explain later, when they go to a center, what you think is good, is correct, what deficiencies there are in your opinion, what should be done; the collective method is applied, if the administrator is an individual who likes to work individually. All those things about practical life, because, in addition,

And in order to have a better ideological formation, it is necessary that the comrades leave school very conscious of the evils that we have, because we have many evils, we have many vices, we have many problems, and it is a tremendous, terrible, daily, constant struggle, which can only be overcome with the effort of an ever-increasing number of citizens, with an ever-increasing participation of the masses; shouldering the burden of all these problems. But it is necessary that the comrades who go through school also learn all these practical things.

It is a lot to ask that in four months one can learn all this, but, of course, in four months one can acquire the bases, one can acquire the orientation and one can acquire the drive; and then in the higher schools, more time; and, later, those who stand out the most in the higher organizations.

As for me, since I cannot go to school, I have to take advantage of my free time to study as well, because I begin by applying the advice that I am giving you.

Thank you very much.

(APPLAUSE)
[[Category:Library works by Fidel Castro]]

Library:Interview by Lisa Howard

2024-08-03T23:07:23Z

Ismael: Video embedded from archive.org

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<blockquote>{{Library work|title=Interview by Lisa Howard|author=Ernesto Che Guevara|spoken on=January 22, 1964}}
On February 22, 1964, American journalist Lisa Howard from ABC interviewed Commander Ernesto Che Guevara in his office at the Ministry of Industries. Below is a transcription of 47 minutes of the footage from that interview. Of these, only 22 minutes were broadcast in English on March 22, 1964.</blockquote>

====== Since the triumph of the Revolution, the Cuban economy - according to all reports - has seriously deteriorated in all sectors: industrial production, vegetable cultivation, and last year's sugar harvest, which reached a low of three and a half million tons. How do you explain this economic regression? ======
The question is a statement, first of all. So the first thing to do is to refute the statement and then answer the question. The claim that all aspects of the Cuban economy have deteriorated during the course of the Revolution is false.

Industrial production has increased from 1959 to now. It could have increased much more if it were not so influenced by the sugar industry, which has indeed declined. Industrial production has increased at a rate of 7% annually excluding sugar, and the last two years (1963 and the projections for 1964) will show greater increases; 1963 was 10%, and for 1964 we calculate more, plus sugar will now increase.

In the agricultural sector, there have been some problems, but they are not total. Sugar, which is our fundamental crop (we still have characteristics of monoculture), has decreased significantly. This is due to a poor sugar policy on our part and the extraordinary drought of the past two years. However, in other aspects of agriculture, the situation has not been the same, and we have had some partial successes: cotton is now a fact in Cuba, and kenaf as well (crops previously unknown).

I believe that the analysis should focus on sugar. As you mentioned, sugar production was very weak. Not 3,500,000, but 3,800,000 tons, the lowest in many years. This year it will be higher, though we cannot yet say by how much, nor do we believe it will be a substantial increase because of the cyclone that has affected the harvest, but it will be higher, and from now on, sugar production will increasingly rise.

Industrial production in general, as I have already said, has been steadily increasing. This should be considered a much greater success, given the extraordinary blockade to which Cuba has been subjected...

====== How much does the economic embargo affect the Cuban economy? ======
One cannot provide (at least I cannot provide) an exact figure...

I cannot provide an exact figure on the impact of the blockade on Cuba. This is partly because the blockade has negative and positive aspects. Among the positive aspects is the development of national consciousness and the spirit of struggle of the people to overcome difficulties. But, if you consider that almost all Cuban machinery, some of it exclusive, was sent from the United States, and that Cuba was a receiver of all the old machinery from the U.S. that capitalists sent here to continue accumulating profits and that many products are now discontinued, you can get an idea of the extraordinary effort that has had to be made to overcome this.

The figures cannot be given; I do not know them. It has evidently meant a significant delay. However, it has also been a positive lesson and a teaching on how we must manage our economy in the future.

I think I have more or less answered your question.

====== Russia is injecting a large amount of money into the Cuban economy every day. What would happen to the island's economy if that aid suddenly ceased? ======
These statements about "daily amounts" correspond to American thinking, and the concept of investments might reflect the idea Americans have of what aid is. American aid from the United States is reversed back against the South American states... it is then reversed against those states themselves. In our case, what can be called aid has been the forgiveness of certain commercial debts and long-term loans of an entirely commercial nature. The rest is the natural trade between the two countries. Cuba has ceased to have the United States as its main import and export partner and is now with the Soviet Union.

If your question is about what would happen if Soviet aid ceased, referring to total exchange, I can tell you that it would paralyze the country's life because, for example, all the oil comes from the Soviet Union, almost 4 million tons. But that is not aid; it is commercial exchange in terms of absolute equality, and we pay for it with our sugar and other products.

Aid has been necessary these years of poor harvests with a surplus, an excess of Soviet exports compared to our imports. These years, with the increase in sugar prices, this has decreased a lot. Currently, our terms of trade are relatively balanced, although the Soviet Union always gives us a commercial imbalance. Then there is the aid from investments, which is very substantial, and if it ceased, it would halt our industrial development. So it is important to clarify that the term "aid" is not the most accurate for our relations with the Soviet Union. What we maintain is a relationship of equality between socialist countries, engaging in mutually beneficial exchange.

====== Many critics of the Cuban regime believe that a truly flourishing industry in Cuba is the effort of communist propaganda to hide the difference between the image of Cuba and the reality of Cuba. What is your reaction to this? ======
I think I should rather ask you what your opinion is, because I have an image of the Revolution... mine is perhaps distorted by the position I hold. People in America, our America, and generally around the world have a different image of the Revolution. When they arrive here, the two images clash, and that is when the shock occurs. But that shock happens to those coming from outside. We, used to criticizing everything of ours, seeing everything bad, and having a deeply critical view of the development of the Revolution, sometimes do not realize the advances we have made, and it is you, visitors who come from time to time, who sometimes point out these advances to us. So, as an interviewer, you could ask me that question.

====== Commander Guevara, many external evidences indicate that the Marxist economic system does not work; it does not provide an abundant life for its people. After 47 years, the Soviet Union is still not able to provide adequate food, housing, and clothing for its people. Do you think this is because the Marxist system does not provide the proper incentives to achieve high levels of productivity? ======
You have a tendency to embed assertions within your questions, and I must first refute the assertion before answering the question.

You assert that it is proven that Marxism does not... that the Marxist system does not provide well-being for people. I believe quite the opposite. When compared to the United States, the standard of living in any country is lower, but when you talk about the American way of life and the free world, you must consider, for example, the 200 million people in Latin America who die from hunger and diseases, who do not even reach adulthood because they die of starvation as children. All these people contribute to the economic greatness of the United States, which exploits them in some way. The same happens in Africa and Asia as well. Marxism breaks all that. In Cuba, there is indeed a tighter situation for many people than before, but there is also a much better situation for many more people than before, and you can see that if you travel around the country, if you get to know our peasants and how they lived, and our sugar workers and how they lived. Then you might find the root of the question. At this moment, as we are besieged by North American imperialism, we cannot give our people everything we would like, but we have given them everything we could and everything we have been able to do so far, from ministers to any other government position, and that is the main reason why peoples continue to fight for their liberation. North Vietnam is liberated, and yet South Vietnam did not find the American way of life better; instead, it rebelled, took up arms, and is defeating American intervention. Think about whether there is something behind that which incites peoples to fight and if Marxism does not offer a better life for peoples.

====== But the U.S. government is very aware of the problems in Latin America, and through the Alliance for Progress, it is working hard to raise the standard of living of people throughout the hemisphere. Now, if the ruling classes agree to carry out land reforms and tax reforms, and if the standard of living improves, wouldn’t the message of the Cuban Revolution lose its effectiveness? ======
Of course, it would lose it immediately. The message of the Cuban Revolution has that significance because, by its very nature, imperialism can only make very timid reforms that do not get to the heart of the matter. If all of Latin America were freed from imperialist domination, imperialism itself would face serious problems. The foundation of imperialism, which is the domination of Latin American countries through unequal exchange, the exchange of manufactured goods for raw materials, and the taking of all decisive factors in each government through oligarchies sold out to imperialism... if all that changed, imperialism would lose its power and would then face the general crisis of capitalism, that is, the crisis within the working class of the country itself, exploited today but whose exploitation is not seen because it is shifted to America, Africa, and Asia... and then the conflict would be directly within the United States. Naturally, the message of the Cuban Revolution would lose all its importance at that moment, but it would not be necessary either because that is precisely what we wish for our peoples, for all the peoples of America. And after achieving what we all desire, there would be no need to keep sending messages that would no longer be significant.

====== So, are we agreed on the desire for those reforms to be made? ======
The real reform? The ascent of the people to power. We agree on that.

====== Commander Guevara, do you think this cannot happen through an evolutionary process but must result from violence and revolutionary upheaval? ======
That always depends on the reactionary classes, which are the ones that refuse to relinquish power, to give up the privileges of power. Where the strength of the people is such that it can force the reactionary classes to leave power through peaceful means, it will happen that way, which is much better for everyone. Where the reactionary classes try to maintain power by any means, a spark will arise independently of anyone’s will or desire that will ignite all of America or part of America, and ultimately, the people will come to power.

====== When Cuba was producing raw materials for the United States and had to buy manufactured goods from us, you called that the worst form of economic colonialism; now, once again, Cuba is assuming the same role, predominantly agricultural, within the Soviet economic system. Is this suddenly acceptable? ======
No, it is not accurate by any means. First of all, it must be clarified that it is not only the exchange of raw materials for manufactured goods that defines imperialism but all the apparatuses attached to these exchange relationships. Cuba sold sugar to the United States and received materials, but the sugar sold to the United States was converted into dollars that also went to the United States, and in addition, the materials that came were often for American factories, which processed products sold here, converting pesos into dollars that also went to the United States. This is one phase of imperialist domination over a country.

Now, regarding the direct exchange of raw materials for manufactured goods, we have had extensive discussions with the Soviet Union about this, and from those discussions emerged a special price for sugar. This is precisely the tangible demonstration that socialist relations are based on entirely different principles. At the price paid by the Soviet Union, our sugar allows us to import enough machinery to develop our industry and become an industrial-agrarian country rather than just a single exporter of raw materials.

====== Commander Guevara, when you fought in the mountains of the Sierra Maestra, did you foresee that the Revolution would take such a radical course? ======
At least I had an inkling. Naturally, the form and violent development of the Revolution could not be foreseen. Even in the Marxist-Leninist formulation of the Revolution, it was not predictable. That was the result of a long process you know well. We had a somewhat vague idea of solving the problems we palpably saw in the peasants fighting with us and in the problems of the workers we knew, but it would be very lengthy to recount the entire process of our... of the transformation of our thinking. Now, there is no doubt that the United States and its way of acting played a significant role in the development and acceleration of the Revolution.

====== It is said that communism is incompatible with the Cuban temperament. Do you think that Cubans would be affected by adhering to the strict discipline of communist society? ======
That is one of the many "versions" of communism. Communism is created by peoples, and therefore peoples create it in their own image. The particularities of our ethnic, social, and cultural structure are transplanted into our way of making and building the new society, and... discipline is not something alien to peoples; it simply corresponds to a stage of development. When there is only one harvest a year, and the harvest depends on the wind or the sun or the rain, time is not important, and discipline has very little importance. But when you must adhere to a development rhythm, when there are industries, when every minute is worth its weight in gold, then discipline must come automatically. In our process of industrializing the country, discipline, by its own weight, is established throughout the country. It is a vital necessity, and the people understand it and adapt it immediately to their way of being.

====== To us, observing the Cuban scene, it seems that the two main problems are: the difficulties of disciplining the people for communism and the growing bureaucracy. Do you think these are the two main problems? ======
Our two main problems are imperialism and imperialism. Then the others may come. But now I can answer your question.

Bureaucracy is a problem. It is the product of a society that has to develop very quickly with cadres who are not prepared for that stage of development. So there is a bit of a shift from quantity to quality: where one efficient person can do a job, 10 people are needed to discuss, exchange ideas, doubt, and even make mistakes to do the same job. At this moment, bureaucracy is a burden in Cuba, but it is a transitional burden, the burden of a learning period, and we will eliminate it afterward.

Discipline, I do not consider to be an absolute problem for Cuba. If you had been here on January 2, you would have seen our armed forces parade, and they were all Cubans (there were neither Congolese, nor Chinese, nor Soviets parading), and it was a real army. We made it ourselves... our people made it. So discipline is not a problem for our people.

====== What is being done to counter the problem of terrible bureaucracy and the lack of organization that we have seen? ======
First, we need to start studying what we have done to see where the root of the bureaucracy lies. We consider that the root of bureaucracy is [in what] we have called "a certain lack of internal drive" from some officials; that is, they lack a personal sense of the problem at hand... a certain fear of the consequences of acts that necessitate protecting the paperwork... always a paper in front...

...which also develops in the United States. It is not exclusive to communism. There is a lot of paperwork in U.S. public offices as well.

And lastly... that real lack of understanding of the problem. So now we are carefully studying these causes to see how they can be eliminated and we consider that bureaucracy is a burden but not a danger and will be eliminated with the development of the revolution.

====== Do you believe that bureaucracy is an intrinsic problem of the communist system? ======
No. I said no. We inherited bureaucracy as an element of the Cuban past, and it also exists in the United States. It may be that at certain moments in the development of socialism, bureaucracy increases excessively... it could be... I am not a theorist to speak on this point... but evidently, bureaucracy exists in both capitalism and socialist systems. In both.

====== Commander Guevara, Dr. Castro has frequently expressed his desire to normalize relations between Cuba and the United States. Do you wish for this normalization to happen? ======
On the basis of principles, of course! And perhaps more than anyone, because the industry suffers the blockade... industry and transportation are perhaps the sectors of production that suffer the blockade the most. Transportation has now been freed, but not us... So on the basis of principles and absolute equality, we think an ideal normalization of relations is possible.

====== Dr. Guevara, do you believe that the restoration of diplomatic relations between Cuba and the United States would be beneficial for the Cuban economy? ======
Diplomatic?

====== ...and commercial. ======
Well... it would be beneficial, but of course...

====== Sorry, I will rephrase the question: Dr. Guevara, what do you think the restoration of diplomatic and commercial relations between Cuba and the United States would mean for the Cuban economy? ======
At the present moment, naturally, if we were to start these relations again, they would have to be gradual. We have redirected our major export products to other markets, but evidently, it would always be easier for us to obtain products, especially spare parts, which are very close and are manufactured precisely by Americans. However, at the moment it seems that this is not a very close reality, and we can manage perfectly without these relations as well.

====== Isn't it difficult that the main supply lines are 7,000 miles away? ======
It is difficult. It was extremely difficult and complicated things at the beginning. But it is being overcome more and more. Soon we will be able to create reserves, and with the reserves already... our warehouses will be here [and] we will be able to remedy most of the difficulties. As time goes by, the distance to achieve our supplies becomes less difficult. Additionally, the relationship becomes closer, we know more about the needs from one year to the next so that our suppliers can prepare the shipments in advance, and year after year this is noticeable in the Cuban economy.

====== Could you analyze how effective the U.S. blockade has been? ======
It seems to me that this is almost an invitation to a crime of infidelity... we have recognized the importance of the blockade, we also announced and with the same calm that the blockade will not prevent us from advancing, but... first it is difficult to specify, and then it is not so convenient either. Even with their good intentions, we are still enemies, and it is good for the enemy to know only the generalities of their opponent.

You have assumed several things during the course of our interview, among them, that communism has no influence, that it is a setback to productivity, that the blockade is very effective (the latter deduction), that bureaucracy is stifling... At the same time, you say that something different is noticeable since your last interview with us in Cuba. I also deduce that you have seen progress in the Cuban revolution, and I could ask you if everything is so bad and if the blockade is so effective, why is the Cuban revolution advancing?

====== It is often said that the most straightforward, most sincere man on the Island is Che Guevara. Therefore, I hope you can tell me how effective the blockade has been. ======
I repeat that I cannot say. From the point of view of the figures, it would be a lie, whatever it may be, because I have also said that the blockade has had both positive and negative aspects. But even assuming that I were the most straightforward person, I do not believe that I would have that special credit in Cuba where we are all straightforward, but even so, sometimes with complete frankness, there are things that one cannot answer, and that is also frankness.

====== Cuba recently purchased buses in London, is negotiating the purchase of ships in Spain, and I understand there is an economic mission in Switzerland. Does this represent a fundamental change in the Cuban economy? ======
Are you referring to a change in the economy or in economic policy?

====== I am referring to a change in economic policy. ======
I do not think so. There has been a certain change in the economic policy of some countries, a certain breaking of the monolithic unity of the free world, and now there is more trade with Cuba. Our willingness to trade has always been the same on the same bases, that is, the merchandise is merchandise, and it should be of mutual benefit to both the buyer and the seller in that transaction. On those bases, we have always traded with everyone, and also with the United States even after not having relations. The United States had influenced a lot to prevent us from buying certain things, and you are well aware of the debate that has occurred over the buses sold by Leyland, but it is not us who have changed. There are certain aspects of international policy that have changed; I do not know if we have anything to do with that, we do not consider ourselves so important.

====== Do you think that trade with the West that you have now will continue and expand in the future? ======
I have hope. That is, we hope.

====== I would like you to elaborate on this. ======
In the beginning, we sent... (when the revolution began, even before having serious problems with the United States) we had sent several delegations to various countries in Europe. In general, there was abstention; people did not have much confidence in our ability to survive. This was accentuated more when the contradictions with the United States were intensified. There came a moment when the exchanges were practically decreasing year by year and very rapidly. However, after the Bay of Pigs and especially after the October Crisis, there has been a gradual and now more accelerated change from all European countries towards the Cuban revolution. We are confident of our permanence as a revolutionary government, of the permanence of the Revolution, and it seems that this faith has also transcended through our actions and our capacity for defense to traders in other capitalist countries, and they have decided to maintain relations that were traditional in many cases with Cuba. So it all indicates that these relations will continue and that even [unintelligible] because there was always insecurity about how to bring spare parts if trade was closed. But above all, England and France have maintained very good relations with us in that sense and have guaranteed spare parts for the machinery they sold us during the revolutionary period. And that has also increased our confidence in the possibility of importing new machinery and increasing with first-quality, world-advanced technological equipment, a whole series of industries we have in development.

====== What would happen to the Cuban economy if suddenly this trade with the West were suppressed? ======
Nothing.

====== Do you think it is necessary? ======
It is convenient.

====== What would you like to see the United States do towards Cuba? ======
It is very difficult to specify that question. It is a bit unrealistic. The frankest and most objective answer would be "nothing." Nothing in all senses, nothing in favor and nothing against, just leave us alone in a word.

====== Do you feel optimistic about the normalization of relations between Cuba and the United States? ======
I think it is also difficult to answer. We are expectant. Observing the situation, simply. Taking precautions for one path or another that may be followed. It depends on a series of circumstances of the characteristics of the U.S. government and also on how well it understands the situation in the world. So far, it has not given clear indications that it understands the correlation of forces in the world, so there are no clear indications that normalization will be total. Now, there are certain signs that despite the latest provocations, like this absolutely piratical imprisonment of our fishermen, things are being conducted with a different tone. If that were the case, we could... coexist, at least... friends, we could hardly be during many years of the U.S. government. Against the American people, I think you have seen here that we have absolutely nothing and there is no hatred in our country against the American people.

====== Thank you very much, Mr. Guevara. ======
I don’t know how to say "you’re welcome" [in English], so I have to say it in Spanish.

====== If something were to happen to Fidel Castro, what do you think would be the fate of the Cuban Revolution and who do you think would take power here? ======
Given the nature of the question, I suppose you are referring to something violent happening. It would naturally and... we cannot deny it, be a very severe blow to the Cuban Revolution. Fidel is our undisputed, unquestioned leader, and our true guide through a series of extraordinarily difficult situations that Cuba has faced, in which he has demonstrated his world-class leadership. I believe none of us have that stature, but we have acquired revolutionary experience over years of struggle, in years of fighting by his side, we have been trained in a unique school, a school of audacity, sacrifice, and determination to defend principles, and of problem analysis. Together, we could move forward even if something were to happen to him. Who would replace him? That would be a matter to discuss later. We do not engage in such analysis now, nor do any of us have such aspirations, but logically, his brother Raúl, not because he is his brother, but because of his own merits, is the Vice Prime Minister and is the most suitable among us to continue the same course of the Cuban Revolution.
[[Category:Library works by Che Guevara]]

Library:Interview by Lisa Howard

2024-08-02T19:56:07Z

Ismael: Embedded video of the interview

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<blockquote>{{Library work|title=Interview by Lisa Howard|author=Ernesto Che Guevara|spoken on=January 22, 1964}}
On February 22, 1964, American journalist Lisa Howard from ABC interviewed Commander Ernesto Che Guevara in his office at the Ministry of Industries. Below is a transcription of 47 minutes of the footage from that interview. Of these, only 22 minutes were broadcast in English on March 22, 1964.</blockquote>

====== Since the triumph of the Revolution, the Cuban economy - according to all reports - has seriously deteriorated in all sectors: industrial production, vegetable cultivation, and last year's sugar harvest, which reached a low of three and a half million tons. How do you explain this economic regression? ======
The question is a statement, first of all. So the first thing to do is to refute the statement and then answer the question. The claim that all aspects of the Cuban economy have deteriorated during the course of the Revolution is false.

Industrial production has increased from 1959 to now. It could have increased much more if it were not so influenced by the sugar industry, which has indeed declined. Industrial production has increased at a rate of 7% annually excluding sugar, and the last two years (1963 and the projections for 1964) will show greater increases; 1963 was 10%, and for 1964 we calculate more, plus sugar will now increase.

In the agricultural sector, there have been some problems, but they are not total. Sugar, which is our fundamental crop (we still have characteristics of monoculture), has decreased significantly. This is due to a poor sugar policy on our part and the extraordinary drought of the past two years. However, in other aspects of agriculture, the situation has not been the same, and we have had some partial successes: cotton is now a fact in Cuba, and kenaf as well (crops previously unknown).

I believe that the analysis should focus on sugar. As you mentioned, sugar production was very weak. Not 3,500,000, but 3,800,000 tons, the lowest in many years. This year it will be higher, though we cannot yet say by how much, nor do we believe it will be a substantial increase because of the cyclone that has affected the harvest, but it will be higher, and from now on, sugar production will increasingly rise.

Industrial production in general, as I have already said, has been steadily increasing. This should be considered a much greater success, given the extraordinary blockade to which Cuba has been subjected...

====== How much does the economic embargo affect the Cuban economy? ======
One cannot provide (at least I cannot provide) an exact figure...

I cannot provide an exact figure on the impact of the blockade on Cuba. This is partly because the blockade has negative and positive aspects. Among the positive aspects is the development of national consciousness and the spirit of struggle of the people to overcome difficulties. But, if you consider that almost all Cuban machinery, some of it exclusive, was sent from the United States, and that Cuba was a receiver of all the old machinery from the U.S. that capitalists sent here to continue accumulating profits and that many products are now discontinued, you can get an idea of the extraordinary effort that has had to be made to overcome this.

The figures cannot be given; I do not know them. It has evidently meant a significant delay. However, it has also been a positive lesson and a teaching on how we must manage our economy in the future.

I think I have more or less answered your question.

====== Russia is injecting a large amount of money into the Cuban economy every day. What would happen to the island's economy if that aid suddenly ceased? ======
These statements about "daily amounts" correspond to American thinking, and the concept of investments might reflect the idea Americans have of what aid is. American aid from the United States is reversed back against the South American states... it is then reversed against those states themselves. In our case, what can be called aid has been the forgiveness of certain commercial debts and long-term loans of an entirely commercial nature. The rest is the natural trade between the two countries. Cuba has ceased to have the United States as its main import and export partner and is now with the Soviet Union.

If your question is about what would happen if Soviet aid ceased, referring to total exchange, I can tell you that it would paralyze the country's life because, for example, all the oil comes from the Soviet Union, almost 4 million tons. But that is not aid; it is commercial exchange in terms of absolute equality, and we pay for it with our sugar and other products.

Aid has been necessary these years of poor harvests with a surplus, an excess of Soviet exports compared to our imports. These years, with the increase in sugar prices, this has decreased a lot. Currently, our terms of trade are relatively balanced, although the Soviet Union always gives us a commercial imbalance. Then there is the aid from investments, which is very substantial, and if it ceased, it would halt our industrial development. So it is important to clarify that the term "aid" is not the most accurate for our relations with the Soviet Union. What we maintain is a relationship of equality between socialist countries, engaging in mutually beneficial exchange.

====== Many critics of the Cuban regime believe that a truly flourishing industry in Cuba is the effort of communist propaganda to hide the difference between the image of Cuba and the reality of Cuba. What is your reaction to this? ======
I think I should rather ask you what your opinion is, because I have an image of the Revolution... mine is perhaps distorted by the position I hold. People in America, our America, and generally around the world have a different image of the Revolution. When they arrive here, the two images clash, and that is when the shock occurs. But that shock happens to those coming from outside. We, used to criticizing everything of ours, seeing everything bad, and having a deeply critical view of the development of the Revolution, sometimes do not realize the advances we have made, and it is you, visitors who come from time to time, who sometimes point out these advances to us. So, as an interviewer, you could ask me that question.

====== Commander Guevara, many external evidences indicate that the Marxist economic system does not work; it does not provide an abundant life for its people. After 47 years, the Soviet Union is still not able to provide adequate food, housing, and clothing for its people. Do you think this is because the Marxist system does not provide the proper incentives to achieve high levels of productivity? ======
You have a tendency to embed assertions within your questions, and I must first refute the assertion before answering the question.

You assert that it is proven that Marxism does not... that the Marxist system does not provide well-being for people. I believe quite the opposite. When compared to the United States, the standard of living in any country is lower, but when you talk about the American way of life and the free world, you must consider, for example, the 200 million people in Latin America who die from hunger and diseases, who do not even reach adulthood because they die of starvation as children. All these people contribute to the economic greatness of the United States, which exploits them in some way. The same happens in Africa and Asia as well. Marxism breaks all that. In Cuba, there is indeed a tighter situation for many people than before, but there is also a much better situation for many more people than before, and you can see that if you travel around the country, if you get to know our peasants and how they lived, and our sugar workers and how they lived. Then you might find the root of the question. At this moment, as we are besieged by North American imperialism, we cannot give our people everything we would like, but we have given them everything we could and everything we have been able to do so far, from ministers to any other government position, and that is the main reason why peoples continue to fight for their liberation. North Vietnam is liberated, and yet South Vietnam did not find the American way of life better; instead, it rebelled, took up arms, and is defeating American intervention. Think about whether there is something behind that which incites peoples to fight and if Marxism does not offer a better life for peoples.

====== But the U.S. government is very aware of the problems in Latin America, and through the Alliance for Progress, it is working hard to raise the standard of living of people throughout the hemisphere. Now, if the ruling classes agree to carry out land reforms and tax reforms, and if the standard of living improves, wouldn’t the message of the Cuban Revolution lose its effectiveness? ======
Of course, it would lose it immediately. The message of the Cuban Revolution has that significance because, by its very nature, imperialism can only make very timid reforms that do not get to the heart of the matter. If all of Latin America were freed from imperialist domination, imperialism itself would face serious problems. The foundation of imperialism, which is the domination of Latin American countries through unequal exchange, the exchange of manufactured goods for raw materials, and the taking of all decisive factors in each government through oligarchies sold out to imperialism... if all that changed, imperialism would lose its power and would then face the general crisis of capitalism, that is, the crisis within the working class of the country itself, exploited today but whose exploitation is not seen because it is shifted to America, Africa, and Asia... and then the conflict would be directly within the United States. Naturally, the message of the Cuban Revolution would lose all its importance at that moment, but it would not be necessary either because that is precisely what we wish for our peoples, for all the peoples of America. And after achieving what we all desire, there would be no need to keep sending messages that would no longer be significant.

====== So, are we agreed on the desire for those reforms to be made? ======
The real reform? The ascent of the people to power. We agree on that.

====== Commander Guevara, do you think this cannot happen through an evolutionary process but must result from violence and revolutionary upheaval? ======
That always depends on the reactionary classes, which are the ones that refuse to relinquish power, to give up the privileges of power. Where the strength of the people is such that it can force the reactionary classes to leave power through peaceful means, it will happen that way, which is much better for everyone. Where the reactionary classes try to maintain power by any means, a spark will arise independently of anyone’s will or desire that will ignite all of America or part of America, and ultimately, the people will come to power.

====== When Cuba was producing raw materials for the United States and had to buy manufactured goods from us, you called that the worst form of economic colonialism; now, once again, Cuba is assuming the same role, predominantly agricultural, within the Soviet economic system. Is this suddenly acceptable? ======
No, it is not accurate by any means. First of all, it must be clarified that it is not only the exchange of raw materials for manufactured goods that defines imperialism but all the apparatuses attached to these exchange relationships. Cuba sold sugar to the United States and received materials, but the sugar sold to the United States was converted into dollars that also went to the United States, and in addition, the materials that came were often for American factories, which processed products sold here, converting pesos into dollars that also went to the United States. This is one phase of imperialist domination over a country.

Now, regarding the direct exchange of raw materials for manufactured goods, we have had extensive discussions with the Soviet Union about this, and from those discussions emerged a special price for sugar. This is precisely the tangible demonstration that socialist relations are based on entirely different principles. At the price paid by the Soviet Union, our sugar allows us to import enough machinery to develop our industry and become an industrial-agrarian country rather than just a single exporter of raw materials.

====== Commander Guevara, when you fought in the mountains of the Sierra Maestra, did you foresee that the Revolution would take such a radical course? ======
At least I had an inkling. Naturally, the form and violent development of the Revolution could not be foreseen. Even in the Marxist-Leninist formulation of the Revolution, it was not predictable. That was the result of a long process you know well. We had a somewhat vague idea of solving the problems we palpably saw in the peasants fighting with us and in the problems of the workers we knew, but it would be very lengthy to recount the entire process of our... of the transformation of our thinking. Now, there is no doubt that the United States and its way of acting played a significant role in the development and acceleration of the Revolution.

====== It is said that communism is incompatible with the Cuban temperament. Do you think that Cubans would be affected by adhering to the strict discipline of communist society? ======
That is one of the many "versions" of communism. Communism is created by peoples, and therefore peoples create it in their own image. The particularities of our ethnic, social, and cultural structure are transplanted into our way of making and building the new society, and... discipline is not something alien to peoples; it simply corresponds to a stage of development. When there is only one harvest a year, and the harvest depends on the wind or the sun or the rain, time is not important, and discipline has very little importance. But when you must adhere to a development rhythm, when there are industries, when every minute is worth its weight in gold, then discipline must come automatically. In our process of industrializing the country, discipline, by its own weight, is established throughout the country. It is a vital necessity, and the people understand it and adapt it immediately to their way of being.

====== To us, observing the Cuban scene, it seems that the two main problems are: the difficulties of disciplining the people for communism and the growing bureaucracy. Do you think these are the two main problems? ======
Our two main problems are imperialism and imperialism. Then the others may come. But now I can answer your question.

Bureaucracy is a problem. It is the product of a society that has to develop very quickly with cadres who are not prepared for that stage of development. So there is a bit of a shift from quantity to quality: where one efficient person can do a job, 10 people are needed to discuss, exchange ideas, doubt, and even make mistakes to do the same job. At this moment, bureaucracy is a burden in Cuba, but it is a transitional burden, the burden of a learning period, and we will eliminate it afterward.

Discipline, I do not consider to be an absolute problem for Cuba. If you had been here on January 2, you would have seen our armed forces parade, and they were all Cubans (there were neither Congolese, nor Chinese, nor Soviets parading), and it was a real army. We made it ourselves... our people made it. So discipline is not a problem for our people.

====== What is being done to counter the problem of terrible bureaucracy and the lack of organization that we have seen? ======
First, we need to start studying what we have done to see where the root of the bureaucracy lies. We consider that the root of bureaucracy is [in what] we have called "a certain lack of internal drive" from some officials; that is, they lack a personal sense of the problem at hand... a certain fear of the consequences of acts that necessitate protecting the paperwork... always a paper in front...

...which also develops in the United States. It is not exclusive to communism. There is a lot of paperwork in U.S. public offices as well.

And lastly... that real lack of understanding of the problem. So now we are carefully studying these causes to see how they can be eliminated and we consider that bureaucracy is a burden but not a danger and will be eliminated with the development of the revolution.

====== Do you believe that bureaucracy is an intrinsic problem of the communist system? ======
No. I said no. We inherited bureaucracy as an element of the Cuban past, and it also exists in the United States. It may be that at certain moments in the development of socialism, bureaucracy increases excessively... it could be... I am not a theorist to speak on this point... but evidently, bureaucracy exists in both capitalism and socialist systems. In both.

====== Commander Guevara, Dr. Castro has frequently expressed his desire to normalize relations between Cuba and the United States. Do you wish for this normalization to happen? ======
On the basis of principles, of course! And perhaps more than anyone, because the industry suffers the blockade... industry and transportation are perhaps the sectors of production that suffer the blockade the most. Transportation has now been freed, but not us... So on the basis of principles and absolute equality, we think an ideal normalization of relations is possible.

====== Dr. Guevara, do you believe that the restoration of diplomatic relations between Cuba and the United States would be beneficial for the Cuban economy? ======
Diplomatic?

====== ...and commercial. ======
Well... it would be beneficial, but of course...

====== Sorry, I will rephrase the question: Dr. Guevara, what do you think the restoration of diplomatic and commercial relations between Cuba and the United States would mean for the Cuban economy? ======
At the present moment, naturally, if we were to start these relations again, they would have to be gradual. We have redirected our major export products to other markets, but evidently, it would always be easier for us to obtain products, especially spare parts, which are very close and are manufactured precisely by Americans. However, at the moment it seems that this is not a very close reality, and we can manage perfectly without these relations as well.

====== Isn't it difficult that the main supply lines are 7,000 miles away? ======
It is difficult. It was extremely difficult and complicated things at the beginning. But it is being overcome more and more. Soon we will be able to create reserves, and with the reserves already... our warehouses will be here [and] we will be able to remedy most of the difficulties. As time goes by, the distance to achieve our supplies becomes less difficult. Additionally, the relationship becomes closer, we know more about the needs from one year to the next so that our suppliers can prepare the shipments in advance, and year after year this is noticeable in the Cuban economy.

====== Could you analyze how effective the U.S. blockade has been? ======
It seems to me that this is almost an invitation to a crime of infidelity... we have recognized the importance of the blockade, we also announced and with the same calm that the blockade will not prevent us from advancing, but... first it is difficult to specify, and then it is not so convenient either. Even with their good intentions, we are still enemies, and it is good for the enemy to know only the generalities of their opponent.

You have assumed several things during the course of our interview, among them, that communism has no influence, that it is a setback to productivity, that the blockade is very effective (the latter deduction), that bureaucracy is stifling... At the same time, you say that something different is noticeable since your last interview with us in Cuba. I also deduce that you have seen progress in the Cuban revolution, and I could ask you if everything is so bad and if the blockade is so effective, why is the Cuban revolution advancing?

====== It is often said that the most straightforward, most sincere man on the Island is Che Guevara. Therefore, I hope you can tell me how effective the blockade has been. ======
I repeat that I cannot say. From the point of view of the figures, it would be a lie, whatever it may be, because I have also said that the blockade has had both positive and negative aspects. But even assuming that I were the most straightforward person, I do not believe that I would have that special credit in Cuba where we are all straightforward, but even so, sometimes with complete frankness, there are things that one cannot answer, and that is also frankness.

====== Cuba recently purchased buses in London, is negotiating the purchase of ships in Spain, and I understand there is an economic mission in Switzerland. Does this represent a fundamental change in the Cuban economy? ======
Are you referring to a change in the economy or in economic policy?

====== I am referring to a change in economic policy. ======
I do not think so. There has been a certain change in the economic policy of some countries, a certain breaking of the monolithic unity of the free world, and now there is more trade with Cuba. Our willingness to trade has always been the same on the same bases, that is, the merchandise is merchandise, and it should be of mutual benefit to both the buyer and the seller in that transaction. On those bases, we have always traded with everyone, and also with the United States even after not having relations. The United States had influenced a lot to prevent us from buying certain things, and you are well aware of the debate that has occurred over the buses sold by Leyland, but it is not us who have changed. There are certain aspects of international policy that have changed; I do not know if we have anything to do with that, we do not consider ourselves so important.

====== Do you think that trade with the West that you have now will continue and expand in the future? ======
I have hope. That is, we hope.

====== I would like you to elaborate on this. ======
In the beginning, we sent... (when the revolution began, even before having serious problems with the United States) we had sent several delegations to various countries in Europe. In general, there was abstention; people did not have much confidence in our ability to survive. This was accentuated more when the contradictions with the United States were intensified. There came a moment when the exchanges were practically decreasing year by year and very rapidly. However, after the Bay of Pigs and especially after the October Crisis, there has been a gradual and now more accelerated change from all European countries towards the Cuban revolution. We are confident of our permanence as a revolutionary government, of the permanence of the Revolution, and it seems that this faith has also transcended through our actions and our capacity for defense to traders in other capitalist countries, and they have decided to maintain relations that were traditional in many cases with Cuba. So it all indicates that these relations will continue and that even [unintelligible] because there was always insecurity about how to bring spare parts if trade was closed. But above all, England and France have maintained very good relations with us in that sense and have guaranteed spare parts for the machinery they sold us during the revolutionary period. And that has also increased our confidence in the possibility of importing new machinery and increasing with first-quality, world-advanced technological equipment, a whole series of industries we have in development.

====== What would happen to the Cuban economy if suddenly this trade with the West were suppressed? ======
Nothing.

====== Do you think it is necessary? ======
It is convenient.

====== What would you like to see the United States do towards Cuba? ======
It is very difficult to specify that question. It is a bit unrealistic. The frankest and most objective answer would be "nothing." Nothing in all senses, nothing in favor and nothing against, just leave us alone in a word.

====== Do you feel optimistic about the normalization of relations between Cuba and the United States? ======
I think it is also difficult to answer. We are expectant. Observing the situation, simply. Taking precautions for one path or another that may be followed. It depends on a series of circumstances of the characteristics of the U.S. government and also on how well it understands the situation in the world. So far, it has not given clear indications that it understands the correlation of forces in the world, so there are no clear indications that normalization will be total. Now, there are certain signs that despite the latest provocations, like this absolutely piratical imprisonment of our fishermen, things are being conducted with a different tone. If that were the case, we could... coexist, at least... friends, we could hardly be during many years of the U.S. government. Against the American people, I think you have seen here that we have absolutely nothing and there is no hatred in our country against the American people.

====== Thank you very much, Mr. Guevara. ======
I don’t know how to say "you’re welcome" [in English], so I have to say it in Spanish.

====== If something were to happen to Fidel Castro, what do you think would be the fate of the Cuban Revolution and who do you think would take power here? ======
Given the nature of the question, I suppose you are referring to something violent happening. It would naturally and... we cannot deny it, be a very severe blow to the Cuban Revolution. Fidel is our undisputed, unquestioned leader, and our true guide through a series of extraordinarily difficult situations that Cuba has faced, in which he has demonstrated his world-class leadership. I believe none of us have that stature, but we have acquired revolutionary experience over years of struggle, in years of fighting by his side, we have been trained in a unique school, a school of audacity, sacrifice, and determination to defend principles, and of problem analysis. Together, we could move forward even if something were to happen to him. Who would replace him? That would be a matter to discuss later. We do not engage in such analysis now, nor do any of us have such aspirations, but logically, his brother Raúl, not because he is his brother, but because of his own merits, is the Vice Prime Minister and is the most suitable among us to continue the same course of the Cuban Revolution.
[[Category:Library works by Che Guevara]]

Library:Interview by Lisa Howard

2024-08-02T19:55:32Z

Ismael: Chatgpt translation of the same interview on the spanish wiki

<blockquote>{{Library work|title=Interview by Lisa Howard|author=Ernesto Che Guevara|spoken on=January 22, 1964}}
On February 22, 1964, American journalist Lisa Howard from ABC interviewed Commander Ernesto Che Guevara in his office at the Ministry of Industries. Below is a transcription of 47 minutes of the footage from that interview. Of these, only 22 minutes were broadcast in English on March 22, 1964.</blockquote>

====== Since the triumph of the Revolution, the Cuban economy - according to all reports - has seriously deteriorated in all sectors: industrial production, vegetable cultivation, and last year's sugar harvest, which reached a low of three and a half million tons. How do you explain this economic regression? ======
The question is a statement, first of all. So the first thing to do is to refute the statement and then answer the question. The claim that all aspects of the Cuban economy have deteriorated during the course of the Revolution is false.

Industrial production has increased from 1959 to now. It could have increased much more if it were not so influenced by the sugar industry, which has indeed declined. Industrial production has increased at a rate of 7% annually excluding sugar, and the last two years (1963 and the projections for 1964) will show greater increases; 1963 was 10%, and for 1964 we calculate more, plus sugar will now increase.

In the agricultural sector, there have been some problems, but they are not total. Sugar, which is our fundamental crop (we still have characteristics of monoculture), has decreased significantly. This is due to a poor sugar policy on our part and the extraordinary drought of the past two years. However, in other aspects of agriculture, the situation has not been the same, and we have had some partial successes: cotton is now a fact in Cuba, and kenaf as well (crops previously unknown).

I believe that the analysis should focus on sugar. As you mentioned, sugar production was very weak. Not 3,500,000, but 3,800,000 tons, the lowest in many years. This year it will be higher, though we cannot yet say by how much, nor do we believe it will be a substantial increase because of the cyclone that has affected the harvest, but it will be higher, and from now on, sugar production will increasingly rise.

Industrial production in general, as I have already said, has been steadily increasing. This should be considered a much greater success, given the extraordinary blockade to which Cuba has been subjected...

====== How much does the economic embargo affect the Cuban economy? ======
One cannot provide (at least I cannot provide) an exact figure...

I cannot provide an exact figure on the impact of the blockade on Cuba. This is partly because the blockade has negative and positive aspects. Among the positive aspects is the development of national consciousness and the spirit of struggle of the people to overcome difficulties. But, if you consider that almost all Cuban machinery, some of it exclusive, was sent from the United States, and that Cuba was a receiver of all the old machinery from the U.S. that capitalists sent here to continue accumulating profits and that many products are now discontinued, you can get an idea of the extraordinary effort that has had to be made to overcome this.

The figures cannot be given; I do not know them. It has evidently meant a significant delay. However, it has also been a positive lesson and a teaching on how we must manage our economy in the future.

I think I have more or less answered your question.

====== Russia is injecting a large amount of money into the Cuban economy every day. What would happen to the island's economy if that aid suddenly ceased? ======
These statements about "daily amounts" correspond to American thinking, and the concept of investments might reflect the idea Americans have of what aid is. American aid from the United States is reversed back against the South American states... it is then reversed against those states themselves. In our case, what can be called aid has been the forgiveness of certain commercial debts and long-term loans of an entirely commercial nature. The rest is the natural trade between the two countries. Cuba has ceased to have the United States as its main import and export partner and is now with the Soviet Union.

If your question is about what would happen if Soviet aid ceased, referring to total exchange, I can tell you that it would paralyze the country's life because, for example, all the oil comes from the Soviet Union, almost 4 million tons. But that is not aid; it is commercial exchange in terms of absolute equality, and we pay for it with our sugar and other products.

Aid has been necessary these years of poor harvests with a surplus, an excess of Soviet exports compared to our imports. These years, with the increase in sugar prices, this has decreased a lot. Currently, our terms of trade are relatively balanced, although the Soviet Union always gives us a commercial imbalance. Then there is the aid from investments, which is very substantial, and if it ceased, it would halt our industrial development. So it is important to clarify that the term "aid" is not the most accurate for our relations with the Soviet Union. What we maintain is a relationship of equality between socialist countries, engaging in mutually beneficial exchange.

====== Many critics of the Cuban regime believe that a truly flourishing industry in Cuba is the effort of communist propaganda to hide the difference between the image of Cuba and the reality of Cuba. What is your reaction to this? ======
I think I should rather ask you what your opinion is, because I have an image of the Revolution... mine is perhaps distorted by the position I hold. People in America, our America, and generally around the world have a different image of the Revolution. When they arrive here, the two images clash, and that is when the shock occurs. But that shock happens to those coming from outside. We, used to criticizing everything of ours, seeing everything bad, and having a deeply critical view of the development of the Revolution, sometimes do not realize the advances we have made, and it is you, visitors who come from time to time, who sometimes point out these advances to us. So, as an interviewer, you could ask me that question.

====== Commander Guevara, many external evidences indicate that the Marxist economic system does not work; it does not provide an abundant life for its people. After 47 years, the Soviet Union is still not able to provide adequate food, housing, and clothing for its people. Do you think this is because the Marxist system does not provide the proper incentives to achieve high levels of productivity? ======
You have a tendency to embed assertions within your questions, and I must first refute the assertion before answering the question.

You assert that it is proven that Marxism does not... that the Marxist system does not provide well-being for people. I believe quite the opposite. When compared to the United States, the standard of living in any country is lower, but when you talk about the American way of life and the free world, you must consider, for example, the 200 million people in Latin America who die from hunger and diseases, who do not even reach adulthood because they die of starvation as children. All these people contribute to the economic greatness of the United States, which exploits them in some way. The same happens in Africa and Asia as well. Marxism breaks all that. In Cuba, there is indeed a tighter situation for many people than before, but there is also a much better situation for many more people than before, and you can see that if you travel around the country, if you get to know our peasants and how they lived, and our sugar workers and how they lived. Then you might find the root of the question. At this moment, as we are besieged by North American imperialism, we cannot give our people everything we would like, but we have given them everything we could and everything we have been able to do so far, from ministers to any other government position, and that is the main reason why peoples continue to fight for their liberation. North Vietnam is liberated, and yet South Vietnam did not find the American way of life better; instead, it rebelled, took up arms, and is defeating American intervention. Think about whether there is something behind that which incites peoples to fight and if Marxism does not offer a better life for peoples.

====== But the U.S. government is very aware of the problems in Latin America, and through the Alliance for Progress, it is working hard to raise the standard of living of people throughout the hemisphere. Now, if the ruling classes agree to carry out land reforms and tax reforms, and if the standard of living improves, wouldn’t the message of the Cuban Revolution lose its effectiveness? ======
Of course, it would lose it immediately. The message of the Cuban Revolution has that significance because, by its very nature, imperialism can only make very timid reforms that do not get to the heart of the matter. If all of Latin America were freed from imperialist domination, imperialism itself would face serious problems. The foundation of imperialism, which is the domination of Latin American countries through unequal exchange, the exchange of manufactured goods for raw materials, and the taking of all decisive factors in each government through oligarchies sold out to imperialism... if all that changed, imperialism would lose its power and would then face the general crisis of capitalism, that is, the crisis within the working class of the country itself, exploited today but whose exploitation is not seen because it is shifted to America, Africa, and Asia... and then the conflict would be directly within the United States. Naturally, the message of the Cuban Revolution would lose all its importance at that moment, but it would not be necessary either because that is precisely what we wish for our peoples, for all the peoples of America. And after achieving what we all desire, there would be no need to keep sending messages that would no longer be significant.

====== So, are we agreed on the desire for those reforms to be made? ======
The real reform? The ascent of the people to power. We agree on that.

====== Commander Guevara, do you think this cannot happen through an evolutionary process but must result from violence and revolutionary upheaval? ======
That always depends on the reactionary classes, which are the ones that refuse to relinquish power, to give up the privileges of power. Where the strength of the people is such that it can force the reactionary classes to leave power through peaceful means, it will happen that way, which is much better for everyone. Where the reactionary classes try to maintain power by any means, a spark will arise independently of anyone’s will or desire that will ignite all of America or part of America, and ultimately, the people will come to power.

====== When Cuba was producing raw materials for the United States and had to buy manufactured goods from us, you called that the worst form of economic colonialism; now, once again, Cuba is assuming the same role, predominantly agricultural, within the Soviet economic system. Is this suddenly acceptable? ======
No, it is not accurate by any means. First of all, it must be clarified that it is not only the exchange of raw materials for manufactured goods that defines imperialism but all the apparatuses attached to these exchange relationships. Cuba sold sugar to the United States and received materials, but the sugar sold to the United States was converted into dollars that also went to the United States, and in addition, the materials that came were often for American factories, which processed products sold here, converting pesos into dollars that also went to the United States. This is one phase of imperialist domination over a country.

Now, regarding the direct exchange of raw materials for manufactured goods, we have had extensive discussions with the Soviet Union about this, and from those discussions emerged a special price for sugar. This is precisely the tangible demonstration that socialist relations are based on entirely different principles. At the price paid by the Soviet Union, our sugar allows us to import enough machinery to develop our industry and become an industrial-agrarian country rather than just a single exporter of raw materials.

====== Commander Guevara, when you fought in the mountains of the Sierra Maestra, did you foresee that the Revolution would take such a radical course? ======
At least I had an inkling. Naturally, the form and violent development of the Revolution could not be foreseen. Even in the Marxist-Leninist formulation of the Revolution, it was not predictable. That was the result of a long process you know well. We had a somewhat vague idea of solving the problems we palpably saw in the peasants fighting with us and in the problems of the workers we knew, but it would be very lengthy to recount the entire process of our... of the transformation of our thinking. Now, there is no doubt that the United States and its way of acting played a significant role in the development and acceleration of the Revolution.

====== It is said that communism is incompatible with the Cuban temperament. Do you think that Cubans would be affected by adhering to the strict discipline of communist society? ======
That is one of the many "versions" of communism. Communism is created by peoples, and therefore peoples create it in their own image. The particularities of our ethnic, social, and cultural structure are transplanted into our way of making and building the new society, and... discipline is not something alien to peoples; it simply corresponds to a stage of development. When there is only one harvest a year, and the harvest depends on the wind or the sun or the rain, time is not important, and discipline has very little importance. But when you must adhere to a development rhythm, when there are industries, when every minute is worth its weight in gold, then discipline must come automatically. In our process of industrializing the country, discipline, by its own weight, is established throughout the country. It is a vital necessity, and the people understand it and adapt it immediately to their way of being.

====== To us, observing the Cuban scene, it seems that the two main problems are: the difficulties of disciplining the people for communism and the growing bureaucracy. Do you think these are the two main problems? ======
Our two main problems are imperialism and imperialism. Then the others may come. But now I can answer your question.

Bureaucracy is a problem. It is the product of a society that has to develop very quickly with cadres who are not prepared for that stage of development. So there is a bit of a shift from quantity to quality: where one efficient person can do a job, 10 people are needed to discuss, exchange ideas, doubt, and even make mistakes to do the same job. At this moment, bureaucracy is a burden in Cuba, but it is a transitional burden, the burden of a learning period, and we will eliminate it afterward.

Discipline, I do not consider to be an absolute problem for Cuba. If you had been here on January 2, you would have seen our armed forces parade, and they were all Cubans (there were neither Congolese, nor Chinese, nor Soviets parading), and it was a real army. We made it ourselves... our people made it. So discipline is not a problem for our people.

====== What is being done to counter the problem of terrible bureaucracy and the lack of organization that we have seen? ======
First, we need to start studying what we have done to see where the root of the bureaucracy lies. We consider that the root of bureaucracy is [in what] we have called "a certain lack of internal drive" from some officials; that is, they lack a personal sense of the problem at hand... a certain fear of the consequences of acts that necessitate protecting the paperwork... always a paper in front...

...which also develops in the United States. It is not exclusive to communism. There is a lot of paperwork in U.S. public offices as well.

And lastly... that real lack of understanding of the problem. So now we are carefully studying these causes to see how they can be eliminated and we consider that bureaucracy is a burden but not a danger and will be eliminated with the development of the revolution.

====== Do you believe that bureaucracy is an intrinsic problem of the communist system? ======
No. I said no. We inherited bureaucracy as an element of the Cuban past, and it also exists in the United States. It may be that at certain moments in the development of socialism, bureaucracy increases excessively... it could be... I am not a theorist to speak on this point... but evidently, bureaucracy exists in both capitalism and socialist systems. In both.

====== Commander Guevara, Dr. Castro has frequently expressed his desire to normalize relations between Cuba and the United States. Do you wish for this normalization to happen? ======
On the basis of principles, of course! And perhaps more than anyone, because the industry suffers the blockade... industry and transportation are perhaps the sectors of production that suffer the blockade the most. Transportation has now been freed, but not us... So on the basis of principles and absolute equality, we think an ideal normalization of relations is possible.

====== Dr. Guevara, do you believe that the restoration of diplomatic relations between Cuba and the United States would be beneficial for the Cuban economy? ======
Diplomatic?

====== ...and commercial. ======
Well... it would be beneficial, but of course...

====== Sorry, I will rephrase the question: Dr. Guevara, what do you think the restoration of diplomatic and commercial relations between Cuba and the United States would mean for the Cuban economy? ======
At the present moment, naturally, if we were to start these relations again, they would have to be gradual. We have redirected our major export products to other markets, but evidently, it would always be easier for us to obtain products, especially spare parts, which are very close and are manufactured precisely by Americans. However, at the moment it seems that this is not a very close reality, and we can manage perfectly without these relations as well.

====== Isn't it difficult that the main supply lines are 7,000 miles away? ======
It is difficult. It was extremely difficult and complicated things at the beginning. But it is being overcome more and more. Soon we will be able to create reserves, and with the reserves already... our warehouses will be here [and] we will be able to remedy most of the difficulties. As time goes by, the distance to achieve our supplies becomes less difficult. Additionally, the relationship becomes closer, we know more about the needs from one year to the next so that our suppliers can prepare the shipments in advance, and year after year this is noticeable in the Cuban economy.

====== Could you analyze how effective the U.S. blockade has been? ======
It seems to me that this is almost an invitation to a crime of infidelity... we have recognized the importance of the blockade, we also announced and with the same calm that the blockade will not prevent us from advancing, but... first it is difficult to specify, and then it is not so convenient either. Even with their good intentions, we are still enemies, and it is good for the enemy to know only the generalities of their opponent.

You have assumed several things during the course of our interview, among them, that communism has no influence, that it is a setback to productivity, that the blockade is very effective (the latter deduction), that bureaucracy is stifling... At the same time, you say that something different is noticeable since your last interview with us in Cuba. I also deduce that you have seen progress in the Cuban revolution, and I could ask you if everything is so bad and if the blockade is so effective, why is the Cuban revolution advancing?

====== It is often said that the most straightforward, most sincere man on the Island is Che Guevara. Therefore, I hope you can tell me how effective the blockade has been. ======
I repeat that I cannot say. From the point of view of the figures, it would be a lie, whatever it may be, because I have also said that the blockade has had both positive and negative aspects. But even assuming that I were the most straightforward person, I do not believe that I would have that special credit in Cuba where we are all straightforward, but even so, sometimes with complete frankness, there are things that one cannot answer, and that is also frankness.

====== Cuba recently purchased buses in London, is negotiating the purchase of ships in Spain, and I understand there is an economic mission in Switzerland. Does this represent a fundamental change in the Cuban economy? ======
Are you referring to a change in the economy or in economic policy?

====== I am referring to a change in economic policy. ======
I do not think so. There has been a certain change in the economic policy of some countries, a certain breaking of the monolithic unity of the free world, and now there is more trade with Cuba. Our willingness to trade has always been the same on the same bases, that is, the merchandise is merchandise, and it should be of mutual benefit to both the buyer and the seller in that transaction. On those bases, we have always traded with everyone, and also with the United States even after not having relations. The United States had influenced a lot to prevent us from buying certain things, and you are well aware of the debate that has occurred over the buses sold by Leyland, but it is not us who have changed. There are certain aspects of international policy that have changed; I do not know if we have anything to do with that, we do not consider ourselves so important.

====== Do you think that trade with the West that you have now will continue and expand in the future? ======
I have hope. That is, we hope.

====== I would like you to elaborate on this. ======
In the beginning, we sent... (when the revolution began, even before having serious problems with the United States) we had sent several delegations to various countries in Europe. In general, there was abstention; people did not have much confidence in our ability to survive. This was accentuated more when the contradictions with the United States were intensified. There came a moment when the exchanges were practically decreasing year by year and very rapidly. However, after the Bay of Pigs and especially after the October Crisis, there has been a gradual and now more accelerated change from all European countries towards the Cuban revolution. We are confident of our permanence as a revolutionary government, of the permanence of the Revolution, and it seems that this faith has also transcended through our actions and our capacity for defense to traders in other capitalist countries, and they have decided to maintain relations that were traditional in many cases with Cuba. So it all indicates that these relations will continue and that even [unintelligible] because there was always insecurity about how to bring spare parts if trade was closed. But above all, England and France have maintained very good relations with us in that sense and have guaranteed spare parts for the machinery they sold us during the revolutionary period. And that has also increased our confidence in the possibility of importing new machinery and increasing with first-quality, world-advanced technological equipment, a whole series of industries we have in development.

====== What would happen to the Cuban economy if suddenly this trade with the West were suppressed? ======
Nothing.

====== Do you think it is necessary? ======
It is convenient.

====== What would you like to see the United States do towards Cuba? ======
It is very difficult to specify that question. It is a bit unrealistic. The frankest and most objective answer would be "nothing." Nothing in all senses, nothing in favor and nothing against, just leave us alone in a word.

====== Do you feel optimistic about the normalization of relations between Cuba and the United States? ======
I think it is also difficult to answer. We are expectant. Observing the situation, simply. Taking precautions for one path or another that may be followed. It depends on a series of circumstances of the characteristics of the U.S. government and also on how well it understands the situation in the world. So far, it has not given clear indications that it understands the correlation of forces in the world, so there are no clear indications that normalization will be total. Now, there are certain signs that despite the latest provocations, like this absolutely piratical imprisonment of our fishermen, things are being conducted with a different tone. If that were the case, we could... coexist, at least... friends, we could hardly be during many years of the U.S. government. Against the American people, I think you have seen here that we have absolutely nothing and there is no hatred in our country against the American people.

====== Thank you very much, Mr. Guevara. ======
I don’t know how to say "you’re welcome" [in English], so I have to say it in Spanish.

====== If something were to happen to Fidel Castro, what do you think would be the fate of the Cuban Revolution and who do you think would take power here? ======
Given the nature of the question, I suppose you are referring to something violent happening. It would naturally and... we cannot deny it, be a very severe blow to the Cuban Revolution. Fidel is our undisputed, unquestioned leader, and our true guide through a series of extraordinarily difficult situations that Cuba has faced, in which he has demonstrated his world-class leadership. I believe none of us have that stature, but we have acquired revolutionary experience over years of struggle, in years of fighting by his side, we have been trained in a unique school, a school of audacity, sacrifice, and determination to defend principles, and of problem analysis. Together, we could move forward even if something were to happen to him. Who would replace him? That would be a matter to discuss later. We do not engage in such analysis now, nor do any of us have such aspirations, but logically, his brother Raúl, not because he is his brother, but because of his own merits, is the Vice Prime Minister and is the most suitable among us to continue the same course of the Cuban Revolution.
[[Category:Library works by Che Guevara]]

Nguyễn Phú Trọng

2024-07-19T15:43:10Z

Ismael: changes some "is" for "was"

{{Infobox person|name=Nguyễn Phú Trọng|honorific prefix=General Secretary|birth_date=14 April 1944|birth_place=Đông Hội, [[French Indochina]]|nationality=Vietnamese|image=Nguyen Phu Trong.png|image_size=200|death_date=19 July 2024|death_place=[[Hanoi]], [[Vietnam]]}}

'''Nguyễn Phú Trọng''' (14 April 1944 – 19 July 2024) was a General Secretary of the [[Communist Party of Vietnam]].<ref>{{News citation|journalist=Nikos Mottas|date=2021-02-01|title=Nguyen Phu Trong re-elected as the General Secretary of the Communist Party of Vietnam|url=https://www.idcommunism.com/2021/02/nguyen-phu-trong-re-elected-as-general-secretary-of-communist-party-vietnam.html|newspaper=In Defense of Communism|archive-url=https://web.archive.org/web/20210416080132/https://www.idcommunism.com/2021/02/nguyen-phu-trong-re-elected-as-general-secretary-of-communist-party-vietnam.html|archive-date=2021-04-16|retrieved=2022-01-30}}</ref> He was the paramount leader of the [[Socialist Republic of Vietnam]]. In 2012, he was awarded the Order of José Martí on a visit to [[Republic of Cuba|Cuba]].<ref>{{News citation|journalist=Luis Chirino|date=2012-04-13|title=Vietnam´s Communist Leader Wound up Official Visit to Cuba|url=http://www.radiohc.cu/ing/news/cuba/6467-vietnamas-communist-leader-wound-up-official-visit-to-cuba.html|newspaper=Radio Havana Cuba|archive-url=https://web.archive.org/web/20130801084504/http://www.radiohc.cu/ing/news/cuba/6467-vietnamas-communist-leader-wound-up-official-visit-to-cuba.html|archive-date=2013-08-01}}</ref>

== References ==
[[Category:Vietnamese communists]]
<references />
[[Category:Former heads of state]]

Ludwig Feuerbach

2024-07-15T22:29:04Z

Ismael: Portrait added to infobox

{{Adapted article}}{{Infobox philosopher|name=Ludwig Feuerbach|birth_name=Ludwig Andreas von Feuerbach|birth_date=28 July 1804|birth_place=Landshut, Electorate of Bavaria|death_date=13 September 1872 (aged 68)|death_place=Rechenberg, German Empire|nationality=German|school_tradition=[[Materialism]]|image=File:Feuerbach.jpg}}
'''Ludwig Feuerbach''' {{Datebio|birthmonth=July|birthday=28|birthyear=1804|deathmonth=September|deathday=13|deathyear=1872}} was a German [[Materialism|materialist]] philosopher, son of a once-famous criminologist Paul-Anselme Feuerbach. Was obliged to give up his academic career because of his philosophical ideas and so lived in the countryside in straitened circumstances. From [[Young Hegelians|young Hegelianism]] he evolved to materialism. “Thought came from being, not being from thought.” Man is the product of nature; [[religion]] is the mythical reflection of human nature. “In man’s God, you can recognize man and in man you can also recognize his God; the two things are identical.” It is not God who created man, but man who created God in his image. Feuerbach’s philosophy provided the intermediary link between [[Dialectics|Hegel’s]] and [[Dialectical materialism|Marx’s]] philosophy. Although somewhere he wrote with scorn of the [[French Republic|French]] materialism of the 18th century, nevertheless, Feuerbach was in fact the restorer of 18th century materialism, with all its great merits and all its faults with its noble, proud and revolutionary hatred for all “theology” and its tendency towards [[idealism]] when explaining social acts and phenomena.
[[Category:Philosophers]]
[[Category:German philosophers]]
[[Category:Young Hegelians]]
[[Category:Theologians]]

Ahí les va

2024-07-01T15:42:57Z

Ismael: Redirected page to ¡Ahí les va!

#REDIRECT [[¡Ahí les va!]]

__NOTOC__

¡Ahí les va!

2024-07-01T00:59:40Z

Ismael: To be edited by Comrade Rick

Requested by Comrade Rick.

To be edited.

Library:Memorandum of conversation between Mao Zedong and Ernesto Che Guevara

2024-06-15T23:40:22Z

Ismael: To be transcribed. (Creation requested by Comrade Rick)

To be transcribed.

(Requested by Comrade Rick)

File:FidelYoungLawyer.jpg

2024-03-07T16:37:22Z

Ismael: More precise date

== Summary ==
[[Marxist]] revolutionary [[Fidel Castro]] as a young lawyer c.1952

Economic history of socialist Cuba

2024-03-03T02:22:39Z

Ismael: linked spanish essay under construction

This page will be based on the translation of [[:es:Ensayo:Historia_económica_de_la_Cuba_socialista|this Spanish essay]] currently being redacted.

== Specificity of the Cuban socialist transition ==

== Political radicalization and transition to a socialist economy (1959 - 1961) ==

== Between Guevara's Budgetary Financial System and soviet Economic Calculus (1961 - 1965) ==

== Idealist phase (1966 - 1970) ==

== Correcting idealist errors (1971 - 1975) ==

== Economic Planning and Management System (1976 - 1990) ==

== Special Period in Time of Peace and reforms (1991 - 1999) ==

== Battle of Ideas (2000 - 2006) ==

== Updating of the Cuban economic model (2006 - present) ==

Economic history of socialist Cuba

2024-03-02T15:37:35Z

Ismael: Major sections/structure of the article

== Initial character of the Cuban Revolution ==

== Political radicalization and transition to a socialist economy (1959 - 1961) ==

== Between Guevara's Budgetary Financial System and soviet Economic Calculus (1961 - 1965) ==

== Idealist phase (1966 - 1970) ==

== Correcting idealist errors (1971 - 1975) ==

== Economic Planning and Management System (1976 - 1990) ==

== Special Period in Time of Peace and reforms (1991 - 1999) ==

== Battle of Ideas (2000 - 2006) ==

== Updating of the Economic Model (2006 - present) ==