1 Introduction
As the most important critique of the Marxian labor theory of value, the
transformation problem has long been discussed. It is century-long
controversy and has not perfectly been settled. Why has not it been
settled? We consider that behind the Marxian labor theory of value, an
important problem currently exists in our understanding of numeration of
value, which is the process that underlies all economic activities. The
purpose of this study is to explore this problem as the theoretical
standpoint of economics.
Numeration of value is the process of converting commodity values into
prices. We assume that a price has relation with value. Many people
suppose, like neo-classical economists do, that a price is determined by
supply and demand at a market. However, the marginal utility theory
cannot move back before the determination at a market to explain the
mechanism how a price is generated. Therefore, the theory of supply and
demand cannot argue value before markets.
This theoretical limitation is linked with the fact that in economics
the theory of supply and demand and the labor theory of value have not
been united. In economics after the marginal revolution neo-classical
economics became to be a mainstream school, it does not mean the two
theories united. Theoretically, there is a significant gap between the
theory of supply and demand and the labor theory of value.
There is the gap within the Marxian theory too, and it became an issue
of the transformation problem. In the disputation of the transformation
problem, the labor theory of value was difficult to be reconciled to a
price, and arguments have been entangled. The reason is that the
mechanism of numeration of value is not understood.
Marx explained this process through the concept of transformation. He
presumed that value and prices naturally coincide and therefore
‘equivalents are exchanged’ (Marx 2014 [1867]: 117). The concept of
numeration of value is similar to Marx’s transformation as both are
processes of conversion. However, the two concepts differ in their
underlying mechanisms and assumptions. The term ‘transformation’ is not
used to explain our theme because we regard Marx’s transformation
concept as being erroneous.
The transformation problem has long been discussed primarily as an
instance of internal inconsistency within Marxian theory. This study,
however, seeks to reconsider the domain of numeration of value separate
from Marx to reframe the concept. When or how is value numerated? We
define prenumerated value as ideas. The labor theory of value is one of
the ideas and the expectation of supply-side and demand-side is too.
This is a different definition with Marx’s.
Many problems are entangled in a complex way, and we discuss two types
of approaches to disentangle them. The first step is examining the
numeration of value and the measurement problem. The disputation in
economics what point of time numerical value is determined has not been
settled. The reason is a confusion of causal recognition. After
resolving it, we reveal a deeper issue: a fundamental confusion over the
mechanism of numeration of value. Although the transformation problem
delves into an extremely mathematical argument, a mechanism of
numeration of value cannot be represented as equations. In the process
of explaining our proposed conception, we highlight the crucial error in
the Marxian labor theory of value and, thus, settle the long dispute
plaguing the transformation problem.
Second, we use a structuralist approach11Structuralism has
developed under the influence of the Marx’s historical materialism. We
appreciate the contribution of Marx to structuralism.. Numeration of
value includes currently unknown dynamics. Marx was interested in the
mystery of value to argue the fetishism of commodities (Marx 2014
[1867]: 46). We seek another path from Marx to determine this
mystery by structurally exploring the process by which value turns into
prices. We refer to the point where prestructural value turns into a
price within a structure as a singular point . The problem
surrounding the singular point is related to the theoretical change that
occurs at the point where economic thought shifts from the classical to
neoclassical school. It marks a change in the theoretical standpoint of
economics. By the structuralist approach, it is clarified that the
standpoint of all economics has a fundamental problem.