ABSTRACT
One of the key contributions of the so-called “New Interpretation” formulated by Duménil (1980) and Foley (1982) is the idea that there really is no “transformation problem” to be solved in Marx's Labor Theory of Value (LTV). 1 The attempt to “transform” labor values into production prices is theoretically dubious and empirically meaningless. In the New Interpretation, the focus of the LTV is on aggregate relationships, on the essential monetary dimension of the economy, and on the relation between actual money magnitudes and their labor counterparts. One of the key assumptions of the New Interpretation is that the value of labor power was measured by the actual wage share, and not by the labor embodied in some bundles of goods consumed by, or affordable to workers.
