Marx’s Theory of Value Transformation: Interpretation of Its Meaning and Mathematical Analysis

The transformation from value to production price in Capital is, in a methodological sense, a shift from the abstract to the concrete and from the general to the specific. In this sense, the price distortion in neoclassical economics, that is, the deviation from the optimal price to the sub-optimal price, is also a kind of value transformation. In terms of economic implications, both value transformation and price distortion are caused by the inconsistency between the private costs of economic actors and the real social costs, and both will produce resource allocation effects and income distribution effects. From a methodological perspective, neoclassical economists do not deny the neoclassical price theory due to price distortion, nor do they have any reason to deny the labor theory of value simply because of the transformation of value. Furthermore, after taking into account the transformation of constant capital, the reason why the equations of total value equal to total production price and total surplus value equal to total profit cannot hold simultaneously under general conditions is that the “total surplus value” in the existing literature is actually only a part of all the surplus values involved in redistribution. If the calculation scope of total surplus value is expanded from the last production stage to all production stages, that is, the surplus value contained in the constant capital is also included, and it is assumed that the total exploitation rate remains unchanged before and after the transformation, then both total equations can and must hold simultaneously.