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I propose here the introduction to the work of D. Colognesi entitled Production prices in a steady-state system: a “weak” version of K. Marx’s transformation procedure. Colognesi has been for a short while a member of the SPGB. He is a knowledgeable Marxist and a fine physicist.    Historical introduction to the ‘Transformation Problem’The transformation of commodity values into production prices in the framework of the Marxian economic system has been presented in the third volume of Capital [1], published by F. Engels in 1894, eleven years after K. Marx's death, but certainly written between 1863 and 1880. Immediately after the publication of this book, the thesis that there was a contradiction between the first and the last volume of Capital became one of the preferred arguments for the critics of K. Marx, such as W. Mühlpfordt, E. von Böhm-Bawerk, and J. V. Komorzynski. In particular, the second, a well-known Austrian academic economist, issued a radical critique [2] of all the Marxian economic system claiming that the results obtained in the first volume of Capital [3], and fully based on the labor theory of value, were in complete contradiction with those contained in the third volume of the same work.A famous reply [4], defending the coherence of K. Marx's research program, was written in 1904 by one of the leading theoreticians of the German working-class movement of that time, R. Hilferding. Additional studies on this subject were performed in the first quarter of the XX century by several authors, including V. K. Dmitriev, M. Tugan-Baranovskij, L. von Bortkievicz, G. von Charasov, and N. Moszkowska. In this respect, it is particularly worth mentioning the first complete critical analysis of what will be known as the Transformation Problem (TP), which was operated by an outstanding statistician and economist, the mentioned L. von Bortkiewicz [5,6], in two detailed essays which, unfortunately, did not immediately obtain the complete attention that they surely deserved. The attitude of L. von Bortkiewicz was completely different from E. von Böhm-Bawerk’s one, since the former was openly a neo-Ricardian, while the latter was one of the strongest supporters of the neo-classical approach to economic sciences. Thus, L. von Bortkiewicz did not mean to completely invalidate K. Marx's results concerning both the labor theory of value and the formation of a general profit rate. Quite the opposite: he analyzed K. Marx’s procedure, discovered what he considered two serious errors, and, finally, proposed a new amended approach based on a more advanced mathematical treatment of the TP. First, according to his interpretation, prices and values of the inputs into a production process should be determined simultaneously with prices and values of the outputs emerging from this process. So prices (and values) of the inputs and prices (and values) of the outputs must be necessarily identical. Second, according to L. von Bortkiewicz’s interpretation of the labor theory of value, values and prices form two distinct and independent systems. With respect to their relative magnitudes, prices do not depend on values and vice versa. So the prices of the outputs depend on the prices of the inputs used to produce them, while the values of the outputs depend on the values of the inputs used to produce them. On the neo-Ricardian side, L. von Bortkiewicz’s work was carefully studied by P. Sraffa in the period 1943-1945, and, later, largely expanded and generalized in his famous book Production of commodities by means of commodities [7]; while on the Marxist side it was P. Sweezy who made the TP known in 1942 [8], especially in the Anglo-Saxon world. In this way the TP became a major issue in the Marxist and neo-Ricardian currents of economic sciences, involving a large number of researchers such as J. Winternitz, K. May, F. Seton, P. Samuelson, M. Dobb, and R. L. Meek, just to cite a few. Mainly based on the results of the mentioned P. Sraffa's work, the contemporary neo-Ricardian interpretation generally presumes that production prices and general rate of profit can be obtained directly from technological matrices (for sector expenditures of means of production) and real wages, as prerequisites. However, the final reformulation of the Sraffian approach to the TP in Marxian terms was fully accomplished only in 1977 by I. Steedman, who, at least temporarily, settled the controversy clearly in favor of the Sraffian school [9]. It had become gradually clear that so-called von Bortkiewicz-Sraffa corrections to K. Marx's economic system were not minor points, but, on the contrary, implied a general revision of various key concepts, e.g. the tendency of the profit rate to fall had to be rejected, and the value system, although formally legitimate, was found to be completely redundant, depriving the concept of working class exploitation of a firm an objective base.At the same time, there appeared a different way of addressing the TP, called Iterative Solution to the Transformation Problem (ISTP). It was developed more or less simultaneously by A. Brody, N. Okishio, A. Shaikh [10], M. Morishima [11], and then perfected by M. Morishima and G. Catephores [12], followed by A. Shaikh and E. Tonak [13], although the ISTP had an interesting precedent in an old article by K. Shibata published in 1934. As a matter of fact, an accurate analysis shows that the ISTP is only a clever mathematical iterative way of solving the system of price equations for the given neo-Ricardian postulates, but is not an alternative approach to solve the Marxian TP.Since the 1980’s there has been an increasing number of responses to the dominant neo-Ricardian interpretation of K. Marx's theory. The first was the so-called New Solution, or better New Interpretation (NI) of the TP. It was first presented, independently, by G. Duménil [14] and D. K. Foley [15]. Since then, it has been developed by A. Lipietz, M. Glick and H. Ehrbar, J. N. Devine, S. Mohun, A. Campbell, F. Moseley etc. It had been the Sraffian attack on the special and privileged status of the so-called "variable capital" (i.e. wages and salaries) in the Marxian system that prompted the two mentioned Marxist economists, G. Duménil and D. K. Foley, to react questioning the legitimacy to consider the variable capital in a dual way through the two aspects of the goods consumed by workers: their prices and their values. However, a critical analysis of the NI is given by A. Saad-Filho [16], as well as by T. Nakatani and Dong-Min Rieu [17].The birth of the NI was later followed by an even more radical approach [labeled Single-System Interpretation (SSI)], where the existence of the dual system (prices and values) is altogether rejected: prices of production and average profit rate depend on the value- based general profit rate, so there is no distinct price system; prices influence value magnitudes, so there is not distinct value system either. In this way, it was possible to recover the three famous Marx’s aggregate equalities (MAEs): the sum of all the values coincides with the sum of all the prices; the sum of all the profits coincides with the sum of all the surplus values; the economy-wide price-based and value-based profit rates are identical. The SSI was originally proposed by R. A. Wolf, B. Roberts, and A. Callari [18,19], but critical comments on this approach are contained in a long article by J. G. Loranger [20].The most drastic rejection of the two von Bortkiewicz-Sraffa corrections came only with the so-called Temporal Single-System Interpretation (TSSI) [21,22], in which the valuation is temporal, so input and output prices can differ. This approach was proposed independently by A. Freeman and G. Carchedi on one side, and by A. J. Kliman and T. McGlone on the other. In the TSSI the original Marxian conditions of transformation are seen by the authors as logically consistent since the approach is based on the use of dynamic transformation models. However, a critical analysis of this temporal approach was carried out by G. Duménil and D. Levy [23], later followed by Dong-Ming Rieu [24].Needless to say that all the three non-Sraffian interpretations in general, and the TSSI in particular, immediately started a lively controversy which has been lasting for more than two decades and was carefully summarized by one of the TSSI proponent, A. J. Kliman, in his stimulating and provocative book Reclaiming Marx's Capital [25]. A particularly interesting topic in this debate is the possibility to describe K. Marx's simple reproduction schemes in the framework of TSSI, since L. von Bortkievicz made use of one of these schemes (namely, a three-sector model) to prove the supposed inconsistency of the original Marxian transformation method. Now, TSSI is seen by its proponents as the exact philological reconstruction of K. Marx’s method; so A. J. Kliman and T. McGlone had necessarily to provide a refutation of L. von Bortkievicz’s proof of K. Marx's errors concerning the simple reproduction scheme. This has been done in 1988 (actually for a slightly simpler two-sector model [26]), showing that a reproduction equilibrium exists between cycles even though input and output prices differ.Despite the ingenuous character of all the three aforementioned non-Sraffian approaches and the huge effort to philologically reconstruct K. Marx’s genuine thought, one has to honestly admit that the TP has not yet been completely resolved: 1) The NI is actually unable to recover all the three MAEs at the same time [25,27], having to give up either on the labor theory of value (i.e. the sum of all the values coincides with the sum of all the prices), or to the surplus-value theory of profit (i.e. the sum of all the surplus values coincides with the sum of all the profits).2) Both the SSI and the TSSI succeed in their common task, but, as clearly noted by G. Duménil and D. Levy [23], after paying the price of a complete redefinition of the concept of value: the value of a new commodity is now the sum of the labor needed to produce it plus the prices (expressed in standard labor equivalent), not the values, of goods and tools consumed in this production process. In this way, following an old idea by W. Mühlpfordt, one has deeply modified the labor theory of value, which, strictly speaking, should be now called “labor theory of new added value”. Once again, whether this is a plausible labor theory of value in Marxian terms or not is still a matter of debate [28].3) As we have seen, the TSSI is rigorously applying K. Marx’s transformation algorithm (although not once, but several times), while the SSI is not and has established its own algorithm. However, as pointed out by F. Moseley [28], the final effect is that the TSSI gives up on the important concept of a stable “equilibrium price”, or better, as recently shown by D. Colognesi [29], regains it only asymptotically where the SSI equilibrium prices are exactly recovered.4) Finally, but this is really an extremely controversial point, there is the question of the so-called “physicalism”, raised by A. J. Kliman [25]. According to this author, the fact that in the reproduction schemes all the prices, values and profit rates can be derived from physical data only (i.e. the quantities of goods and tools utilized in the production process) is thoroughly incompatible with K. Marx’s theory, where, on the contrary, “the value rate of profit determines the price rate, and the physical rate plays no role at all” [25]. In addition, it also claimed that any “simultaneist” approach (either Sraffian, or NI, or even SSI), in which input and output prices/values are determined at the same time, would necessarily lead to mere “physicalism”. For this reason, only the TSSI would escape from the “physicalist” trap, managing to fully accomplish the TP in the spirit of Marxian economic thought. Needleless to say, this statement is not accepted by most of the Marxist economists.Given the mentioned TP scenario and taking inspiration from the important remarks by F. Moseley [28] that associates the value theory described in volume I of Capital with the microeconomic point of view, and the price theory described in volume III of Capital with the macroeconomic one, we have conceived the idea to explore the TP from a slightly different perspective: the labor theory of value would absolutely hold at the microeconomic level (i.e. the individual production sector), while the formation of an average profit rate and, consequently, of the various production prices would give rise to a change in the physical side system in order to guarantee its steadiness, as wisely noted by V. Kalyuzhnyi in his two pioneering papers [27]. Consequently, the labor theory of value would become confined to the so-called “net product” at the very end of the economic process, just before the final consumption. This would result in an apparent violation of the labor theory of value, at least in its strict sense, but actually would ideally reply to F. Engels, who, in the introduction to volume II of Capital, asked the economists (nine years before the publication of volume III) the following intriguing question:"… how can and should a uniform average rate of profit be formed, not only without the violation of the law of value, but just on its basis?" [30]. [1] K. Marx, Capital: A critique of political economy, vol. III (Penguin, London, 1991).[2] E. von Böhm-Bawerk, Karl Marx and the Close of His System (Augustus M. Kelley,New York, 1949).[3] K. Marx, Capital: A critique of political economy, vol. I (Penguin, London, 1990).[4] R. Hilferding, Böhm-Bawerk’s Criticism of Marx (Evergreen Review, New York, 2009).[5] L. von Bortkiewicz, On the Correction of Marx’s Fundamental Theoretical Constructionin the Third Volume of Capital, in appendix to Ref. [2].[6] L. von Bortkiewicz, Value and Price in the Marxian System, reprinted in InternationalEconomic Papers 2, 5 (1952).[7] P. Sraffa, Production of Commodities by Means of Commodities. Prelude to a Critiqueof Economic Theory (Cambridge University Press, Cambridge, 1960).[8] P. Sweezy, The Theory of Capitalist Development (D. Dobson Ltd., London, 1946).[9] I. Steedman, Marx after Sraffa (NLB Editions, London, 1977).[10] A. Shaikh, The so-called transformation problem: Marx vindicated (mimeograph) (NewSchool for Social Research, New York, 1973).[11] M. Morishima, Marx’s Economics: A Dual Theory of Value and Growth. (CambridgeUniversity Press, Cambridge,1973).[12] M. Morishima and G. Catephores, The Transformation Problem: a Markovian Process,in Value, Exploitation and Growth, M. Morishima and G. Catephores eds., Chap. 6(McGraw-Hill, New York, 1978).[13] A. Shaikh and E. Tonak, Measuring the Wealth of Nations (Cambridge UniversityPress, Cambridge, 1994).[14] G. Duménil, De la Valeur aux Prix de Production: Une réinterprétation de latransformation (Economica, Paris, 1980).[15] D. K. Foley, The Value of Money, The Value of Labour Power and the MarxianTransformation Problem, Review of Radical Political Economics 14, 37 (1982).[16] A. Saad-Filho, The value of money, the value of labour power and the net product: anappraisal of the ‘New Approach’ to the transformation problem, in A. Freeman and G.Carchedi eds., Marx and Non-Equilibrium Economics (Edward Elgar, Cheltenham, 1996).[17] T. Nakatani and D.-M. Rieu, On the ‘New Interpretation’ of Marxian labor theory ofvalue, Kobe University Economic Review 49, 51 (2003).[18] R. A. Wolff, B. Roberts, and A. Callari, Marx's (not Ricardo's) ‘transformation problem’:a radical reconceptualization, History of Political Economy 14, 564 (1982).[19] R. A. Wolff, A. Callari, and B. Roberts, A Marxian Alternative to the traditional‘Transformation Problem’, Review of Radical Political Economics 16, 115 (1984).[20] J. G. Loranger, A profit-rate invariant solution to the Marxian transformation problem,Capital and Class 82, 23 (2004).[21] see the various contribution by A. Freeman, G. Carchedi and W. de Haan in A.Freeman, G. Carchedi eds., Marx and Non-Equilibrium Economics (Edward Elgar,Cheltenham, 1996).[22] A. J. Kliman and T. McGlone, A Temporal Single-System Interpretation of Marx’sValue Theory, Review of Political Economy 11, 33 (1999).[23] G. Duménil and D. Levy, The Conservation of Value: A Rejoinder to Alan Freeman,Review of Political Economy 32, 119 (2000).[24] D.-M. Rieu, The Temporal Single-System Interpretation of Marx’s Value Theory: ACritical Appraisal, Korean Economic Review 19, 81 (2003).[25] A. J. Kliman, Reclaiming Marx's Capital: A refutation of the myth of inconsistency(Lexington Books, Lanham (MD), 2007).[26] A. J. Kliman and T. McGlone, The Transformation non-Problem and the non-Transformation Problem, Capital and Class 12, 56 (1988).[27] V. Kalyuzhnyi, The Full Solution of a Problem of Commodity Values Transformationinto Production Prices, Ukrainian Journal Ekonomist 6, 25 (2006); V. Kalyuzhnyi, TheTransformation Problem: Erroneous Arguments of Tugan Baranowsky, Bortkiewicz andSteedman, unpublished (2014). Available at SSRN:http://dx.doi.org/10.2139/ssrn.2520362%5B28%5D F. Moseley, Money and the totality (Haymarket Books, Chicago (IL), 2016).[29] D. Colognesi, La TSSI alla prova: l’andamento a tempi lunghi negli schemi marxiani diriproduzione semplice, appendix I in V. Orati, Marx “scienziato”: disvelato (Wolters Kluver ,Padova, 2018).[30] K. Marx, Capital: A critique of political economy, vol. II (Penguin, London, 1992).

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If interested here you can find a point counterpoint to the book review.Please scroll down to the bottom. Btw with Carla I meant Clara. Sorry for the typos.https://johnriddell.wordpress.com/2017/12/05/clara-zetkin-and-the-struggle-against-fascism/

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Brian wrote:

Good.  Can you post the disclaimer on their site?

 I am not sure they will allow us,  but we will try, in any case we'll post it on our italian blog. 

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Be aware that Convergenza Socialista is a Reformist Party. We (the italian folks) are preparing a disclaimer to distingish the SPGB from them. 

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jondwhite wrote:

ISR Winter 2016 cover Labriola herehttp://isreview.org/issue/103/critical-communism-antonio-labriola

 In my opinion this assay by Doug Enaa Greene on Labriola’s thoughts is a good one. I can only find one point, which is not historically correct:“In contrast to the deterministic and economistic orthodoxy, there were a host of revolutionaries in the Second International such as Lenin, Trotsky, Plekhanov, Luxemburg, and Gramsci who were antideterministic and held to the view that rather than collapsing on its own, capitalism would have to be consciously overthrown. What was needed was a revolutionary break with previous Marxist orthodoxy and revisionism.”Gramsci was not active in the Second International.  He joined the PSI in 1913 and his figure was rather marginal up to the end of WWI. One of the first popular article he wrote was in 1914 to prize Mussolini’s active and operational neutrality. He founded Ordine Nuovo in 1919 when the Second International was rather “dead”.   I do not agree with the attribution of Trotsky theorization of permanent revolution to Labriola.“It is no accident that Trotsky’s conception of Marxism with the theory of permanent revolution, critical dialectical method, and anti-economism owed a great deal to his engagement with Antonio Labriola”In fact, as written in the Standard’s February article, “Labriola had already anticipated that Russia’s so-called ‘agrarian communism’ could not be a path to socialist revolution and, in agreement with Engels, that Russia had to first go through a bourgeois phase of development (commodity production) before it could host a real emergence of socialist ideas.” I am also not aware that “By the time Labriola died in 1904, he had grown increasingly pessimistic about the validity of Marxism”. And this surprises me quite a bit. Other than those points, I agree with the author’s take on Antonio Labriola. He definitely “deserves to be known and studied based on his own merits.”. 

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errata corrigeI just wanted to report an important typo, the PSI was founded in 1892 and not in 1882.Cesco 

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 To DJP & ALB: first of all I did not have any direct contact with the people involved in the occupy movement, so the “label” I gave to them of being middle class was merely based on the impression that I got from the media.  ALB has been there and says that I am wrong and this makes me feel more positive.About the precise definition of what is middle class and what is working class this is a complex and long matter. If it is needed I will explicit it later. Anyway, ALB feeling is right, I inadequately considered middle class, in fact, the reactionary part of the workers, that is, university-educated people, let’s say the ones for which their work should be simplified several times to obtain the unit of simple abstract labour.  My point was, that by being, nowadays, the bargaining power of the majority of workers very very low they cannot afford to demonstrate. Who can do it, so? Unemployed people, people without job uncertainty, pensioners? This does not make this protest less important, but if it was down to reactionary ‘alternative’ people, no-global kind of types, that would make me pessimist. That’s all. To ALB: Please do not get me wrong I was not criticizing the SPGB of being amorphous, but I was just saying like SussexSocialist puts that this movement seemed to me like a ‘lets-have-nicer-capitalism-with-honest-politicians-and-less-greed’ kind of movement. I think you are doing a good job being there and spreading the “Magic”  

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I agree with ALB…the lack of a concrete knowledge of the causes of the crisis of the Captalist system, and the lack of social awareness, makes an interesting movement like the Occupy-movement to be reactionary and reformist. Its spontaneity, which is the good news, reflects what has already happened in the past with the soviets in Russia, the councils in Germany, the ‘consigli di fabbrica’ in Italy and so on. But the lack of consciousness determins their lack of structure and the lack of structure it’s the bad news. So, I think that the SPGB should try to show what the real core of the social-economic problem is, and what Socialism really means, to the Occupy-people. However, I am a bit pessimist about the outcome, since I see this as a middle class movement rather than a working class movement. I am afraid that the working class, in particular in the so called rich countries, has no bargaining power whatsoever so they won’t openly follow this movement. It is true that if unemployment keeps growing there won’t be any other choice, but occupying every possible place. But again is it matter of convincing a few occupy-people or the large majority of workers and unemployed?

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Hi All,I agree with you guys, we should not be dismissive. However, the lack of social awareness, or in traditional terms class consciousness, will determine the usual reactionary and reformist solutions to the old flaws of the capitalist system. I fear that the dominat class’ ideology will work well in covering up the historical materialistic analysis of capitalism and that those Occupy-people will end up like all the other petit bourgeois movements. Now the question is, is it worth trying to introduce the basis of Marxism and Socialism into such middle class oriented movement or is it better to expose ourselves with such demostrations?   

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