Which Way Forward: Marx's Theory or Sraffa's Theory? A Reply to Laibman

This article is a response to David Laibman's review essay, in this journal, on my recent book Money and Totality: A Macro-Monetary Interpretation of Marx's Logic in Capital and the End of the “Transformation Problem.” Laibman argues that Marx's theory is logically incoherent (the well-known “transformation problem”) and that Sraffa's theory is the only coherent theory of prices and income distribution, and therefore the “way forward” for critical economists is Sraffa's theory. I argue, to the contrary (in my book and in this article), that Marx's theory, correctly understood, is logically coherent (no transformation problem) and that Marx's theory has much greater explanatory power than Sraffa's theory, and therefore the “way forward” for critical economists continues to be Marx's theory.