Socialism or state capitalism? The transformation problem and the theoretical defense of Chinese “socialism”

This essay revisits the transformation problem in Marxist economics and its implications for contemporary Sraffian defenses of “Chinese socialism” that separate profit from exploitation. It critiques Sraffian-derived interpretations of the transformation problem—drawing on Moseley’s extensive criticisms of simultaneist approaches—showing how such frameworks undermine Marx’s value theory. The essay then compares Moseley’s macro-monetary interpretation with the Temporal Single-System Interpretation (TSSI). While both reject simultaneism and treat values and prices as components of a single system, the TSSI preserves Marx’s temporal determination of value by valuing inputs at prices prevailing when production begins and outputs at current prices. This temporal logic resolves the alleged internal inconsistencies in Marx’s theory and clarifies the link between exploitation and profit.