| ABSTRACT: In this paper I argue that the long-lasting analytical controversy over Marx’s value theory has altogether been made considerably worse by reason of the following fallacies. (i) Economists have commonly overlooked the divergence between two distinct definitions of the exchange value in terms of “socially necessary” labour time, the first being outlined in Capital, Volume I, (the only volume Marx actually published) and the second appearing in the manuscripts for Volume III (edited posthumously together with Volume II by Engels). (ii) By assuming that by the expression “socially necessary” Marx meant just the prevailing “technical” conditions, labour power has usually been treated analytically as a physical coefficient of production shaping, alongside to others, the interindustry input-output schemes and, likewise, its “value” as being predictable beforehand. (iii) On the other hand little attention has been given to the alternative meaning referring to the fact that in a non-planned economy labour time actually applied to particular goods may not correspond to the scale of the social demand. Consequently the labour time embodied in commodities offered in the market turns out to be “socially necessary” only in that market transactions allow it to match the labour time requested and, accordingly, it can only be known ex post, i.e., after the balance of supply and demand is accomplished. (iv) This is why in Volume I values are kept analytically distinct from prices of production, instead of being improperly treated as their ex ante direct conditions and, thereafter, “transformed” into the latter as suggested in Volume III. (v) The mathematical attempts to provide the value theory and the transformation problem with a rigorous foundation have generally ignored the above mentioned theoretical knot which, if recognized, would eventually render the transformation problem altogether meaningless. As a consequence this paper asserts that, to detach Marx’s value theory from its shortcomings - and their proliferation throughout the subsequent economic theory - it is essential to set the value theory free from the misconceptions he himself contributed to create, although not necessarily endorsed, since he left a substantial part of his manuscripts unpublished.
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