74 SOCIAL SCIENTIST theory of value and exploitation. It does not succeed. Instead we get a mystifying interpretation of the Marxian theory of exploitation: ^the appropriation of surplus value by capitalists represents exploitation not only because it is contrary to the socialist sense of morality (which Marx shared) but because Marx's analytical theory of capitalism predicts the inevitable collapse of the capitalist system."8 The essence of the Marxian theory of exploitation seems to be misunderstood. Put very simply it says that the surplus produced in the process of production is appropriated by the capitalist class so that ownership of capital does not represent a productive activity. This is not an ethical statement but merely a crucial aspect of the relations of production under capitalism.' The author proceeds to examine whether the Marxian theory of exploitation can be reconciled with a long-run theory of competitive equilibrium and in doing so, comes up against the well-known transformation problem. Here he appears to be terribly confused: first,, it is not at all clear why the transformation is a ^falsely constructed problem."* Secondly., if modern work (which the book holds in great reverence) has proved what is now known as the fundamental Marxian theorem that the rate of profit is positive only if the rate of exploitation is positive,5 what is all the fuss about the transformation problem and in what sense was Marx's way of posing the problem irrelevant ?® Logic, but No Theory The much awaited ^post-Marxian theory of capitalist exploitation59 appears in chapter 6. It turns out partly to be a summary of the points of similarity between Sraffa's analysis/ referred to as ^modern commodity production theory'5, and the Marxian theory of value, capital and exploitation. Some of the points of similarity are now fairly well known and are: there is (i) a maximum rate of profit compatible with all-positive prices; (ii) an inverse relation between profits and wages, and (iii) no place for treating capital as a quantity of waiting in Sraffa's analysis. The reader, however^ searches in vain for a theory of exploitation in Sraffa's analysis. Demonstrating the inverse relation between profits and wages does not constitute a theory of exploitation: Sraffa's analysis is purely logical in character and does not contain a theory of exploitation. Chapter 6 has a strange appendix in which an attempt is made to relate the modern theory of collective choice (inspired by the work of Arrow and Sen) to the Marxian theory of exploitation. The second half of the book attempts in part to apply Sraffa's analysis (referred to as ^the commodity production model of the post-Marxiam theory of capitalist exploitation") to explain the ^institutional changes in advanced and backward societies, capitalist and socialist. The following set of concepts are used throughout the analysis: (a) an indecomposible system of production;8 (b) the maximum rate of profit in an indecomposable system; (c) the aggregate rate of surplus value (ARSV) of an indecomposable system which is the '"'ratio of the