The diagrams C–M–C and M–C–M’ show two different ways of thinking about economics that are linked to different social classes. In the C–M–C cycle, which is common among small-scale producers or workers, someone sells a good they made (C) to get money (M), which they then use to buy another good they need (C). This process is based on use-value and the need to stay alive. The M–C–M’ cycle, on the other hand, is the general formula for capital. In this cycle, a capitalist starts with money (M), uses it to buy goods (C)—especially labor power—and ends up with more money (M’). M’ stands for surplus value, which is the extra value that workers create that is more than what they are paid. Reading 5.1 says that labor power is special because it can create more value than it costs. This lets capitalists get extra labor, or work done beyond what is needed to pay wages. This is how money turns into capital: not just by being traded, but also by being used. The capitalist reinvests the extra money to start the cycle again, using strategies like speeding up, downsizing, and hiring people on a contract basis to make more money. Over time, this system lets the capitalist class keep and grow its wealth, not by meeting people’s needs, but by controlling production and taking the value, that other people create.
