> Most wealth is produced by science &
> technology, with labor remaining a
> very small element. That qshes out any
> particular relation between value and
> prices.
The only way I can make sense of these statements is by association with Adam Smith's fatal leap from his "esoteric" theory of value (value = labor time) to his "exoteric" theory (value = wages + profits + rents). This blatant logical contradiction in Smith drove Marx nuts.
Just to make this clear. Marx aimed at showing that, even though under capitalism things appear upside down (as if prices had nothing to do with social labor time requirements and were, instead, determined by mark-ups proportional to the sizes of capital stocks), in fact the opposite was true: ultimately, prices were regulated by (relative) values. Carrol seems to be saying that Smith was right, that once science and technology developed under capitalism (i.e. once we moved beyond the "rude state of society" where no "accumulated stock" existed), the relationship between values and prices got severed.
Just a curious thing to note. Mike Beggs recently noted that Ricardo (and seemingly Marx as well) believed that the equalization of profit rates across capitals of different value compositions had a minimal influence on overall price variations, i.e. that the bulk of price changes was due to changes in overall labor time requirements, that changes in capital compositions amounted to small disturbances. And I told the story of how I used BLS data on labor time requirements and found that Ricardo (and Marx?) was (were?) remarkably accurate in this empirically guess. In brief, assuming we had good data on both, if we want to anticipate changes in relative prices in the most economical manner, we should look at changes in labor time requirements rather than at changes in capital compositions. (Of course, if you combine both, you improve on your prediction, but that is more costly.)
> The 'theory' of the tendency of rate of
> profit to drop is clearly false as an
> economic 'thoery.' It is a fine metaphor
> for the decreasing element of labor in
> wealth (as opposed to value).
I'd need to scan your brain to determine what exactly you mean by "economic" and what by "'theory'." As for your statement taken as a whole, maybe what you meant to say was that, not the "tendency of the rate of profit to drop," but the tendency of the value composition of capital to increase, is a "fine metaphor for"... etc. The increase of the capital composition does not necessarily lead to a drop in the profit rate.