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Ricardo’s and Marx’s Conception of Absolute and Relative Value: A Critical Overview

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  • Miguel D. Ramirez

    (Trinity College)

Abstract

This paper examines Ricardo’s and Marx’s views on absolute and relative value, focusing on the parallels and differences in their analysis of labor values. Next, it discusses Marx’s ingenious but incomplete “solution†to the problem of how it is possible for a rigorous and consistent labor theory of value to operate in a competitive capitalist economy. It then gives an overview of Sraffa’s seminal contribution to the problem of constructing an invariable standard of value which meets Ricardo’s exacting criteria, as well as resolving Marx’s transformation conundrum—one which involves abandoning the labor theory of value. The latter comes at the heavy price of discarding those qualitative and dialectal (dynamic) elements in Marx’s class-based and historical approach which, more so than the classical (surplus) approach, make it such a valuable tool for understanding the social (power) relations of capitalism, as well as cutting through its ideological obfuscations.

Suggested Citation

  • Miguel D. Ramirez, 2022. "Ricardo’s and Marx’s Conception of Absolute and Relative Value: A Critical Overview," Bulletin of Political Economy, Bulletin of Political Economy, vol. 16(2), pages 103-132, December.
    • Handle: RePEc:awu:journl:v:16:y:2022:i:2:p:103-132
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    References listed on IDEAS

    as
    1. Fabio Petri, 2015. "On Some Modern Reformulations of the Labour Theory of Value," Contributions to Political Economy, Cambridge Political Economy Society, vol. 34(1), pages 77-104.
    2. Wolfson, Murray, 1990. "The Transformation Problem: Exposition and Appraisal," Journal of the History of Economic Thought, Cambridge University Press, vol. 12(2), pages 179-195, October.
    3. Miguel D. Ramirez, 2019. "Credit, Indebtedness and Speculation in Marx's Political Economy," Economic Thought, World Economics Association, vol. 8, pages 46-62, December.
    4. F. Seton, 1957. "The "Transformation Problem"," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(3), pages 149-160.
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    More about this item

    Keywords

    Absolute value; constant capital; fetishism; invariable standard; labor theory of value; prices of production; profit; relative value; surplus-value; standard commodity; value; variable capital.;
    All these keywords.

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian

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