ABSTRACT
Robert Paul Wolff argues that both David Ricardo's and Karl Marx's works suffered from a major theoretical flaw: the inability to articulate fully a labor theory of value that can be transformed into exchange values or prices. Wolff claims that this incomplete treatment of classical analysis as developed by Ricardo and Marx in part accounts for the predominance of marginalist economic theory in the nineteenth century. He then turns to how Piero Sraffa solved the dilemma of the transformation of values to prices.
Once the riddle of the "transformation problem" is solved, Wolff goes on to a discussion of how this has affected the development of political economy and in particular Marxist theory. In the final part of the article he provides a road map of contemporary Neo-Ricardian theories.
