- As we learned thus far, the capitalist class consists of people who own wealth, as well as the means of production in American society. An important question in understanding how this class works is to ask: how does a capitalist remain wealthy? The answer to this question depends largely on understanding the diagram M-C-M’. So, let’s practice by explaining what happens in this diagram in our own words (but basing our ideas on Reading 5.1). Respond to the following question: Explain M-C-M’ to show how capitalists maintain and increase their wealth. (hint: your answer should weave a summary that includes what you reviewed in the self-assessment exercise question 1-7)
11 thoughts on “Discussion Board 5.2”
Leave a Reply
You must be logged in to post a comment.
The diagram M-C-M stands for Money → Commodity → More Money. A capitalist begins with money, which is the M in the diagram. They use this money to purchase commodities, represented by C, such as raw materials, machines, and labor power. These commodities are then used in production to create goods that can be sold. When the capitalist sells the finished product, they end up with M, which is more money than they had in the beginning.
The difference between the original money (M) and the larger amount of money (M) comes from surplus value, which is the extra value workers create beyond what they are paid in wages. This surplus value is the source of profit for the capitalist. In this way, capitalists maintain and increase their wealth by continuously reinvesting money into commodities and selling the products for more than the cost of production.
The diagram M–C–M’ represents how capitalists maintain and increase their wealth. The “M” stands for money, “C” stands for commodities (like raw materials, machines, and labor power), and “M’” is the original money plus extra profit (surplus value). In this cycle, a capitalist starts with money, invests it into the means of production and labor, and then sells the finished goods for more money than they originally spent.
The key is that workers create more value through their labor than they are paid in wages, and this extra value (the surplus) goes to the capitalist as profit. For example, a factory owner may pay workers $100 to produce goods that sell for $300. the $200 difference is surplus value, which helps the capitalist grow wealth. By repeating this cycle over and over, and by using strategies like downsizing, speedups, and contract labor, capitalists expand their profits and strengthen their class position in society.
Hi Divya, thats a really great example to show how the M-C-M works.
The diagram M-C-M’ describes the process in which capitalist’s increase their wealth or just maintain it in the business industry. The M in the beginning of this diagram stands for the initial amount of money a capitalist starts off with. The C stands for commodities which the capitalist then uses their money that they start off with to buy. These include things such as raw materials, machines and labor power. These commodities are then used to produce goods that the capitalist can then sell to make more money. The M at the end of the diagram stands for the amount left after selling the product.
The difference between the first and second M is that while the first M stands for the initial amount of money started off with and the second M stands for the final amount which should be more than the initial start. The final M comes from the surplus value. The surplus value is the extra value workers create with the amount of labor they put in which is worth more than they are paid in wages. This is the way a capitalist maintains and increases their wealth. They continue to reinvest money into more commodities to then sell it for way more than they pay their workers.
MCM shows how capitalist keep and grow their wealth. The first M is for money. C is for commodities like resources, tools and workers. The use to make products And the second M is for more money they make from the products they sell. For example, for a bakery the commodity includes flour, eggs, ovens, etc. then the baker sells the sweets for money they made before. To make extra profit
That’s a really clear explanation, Rosie. I like how you broke down the M–C–M cycle with the bakery example. It really shows how capitalists don’t just use money to buy commodities but mainly to get back more money through profit. It makes sense how reinvesting keeps the cycle going and helps them grow their wealth.
The diagram MCM shows how capitalist increase their wealth. The M represents money, the C represents commodities and the M is the original money and the extra profit.
1. CMC is when you sell something you made (commodity) get money for it and then using that money to purchase another commodity you need. You prioritize getting what is needed, as opposed to intending on profit.
2. MCM entails with the start of money which buys a commodity then sells it for more money. In this situation the goal is to create a profit.
3. Capitalists maintain their wealth by repeating the MCM cycle. Every time there is a surplus value from a worker the profit goes straight to capitalist as extra profit. By doing this consistently they keep their wealth and grow it over time
The formula M–C–M′ explains how capitalists grow wealth by starting with money (M), buying commodities (C) like labor power and raw materials, and ending with more money (M). The difference between M and M′ is surplus value, created when workers produce more value than the wages they receive. Jalée shows that this system works because capitalists pay for “necessary labor time” but benefit from the extra hours of surplus labor, which they don’t pay for. In simple terms, money becomes capital when it is used not to meet needs but to generate profit, and this cycle repeats, ensuring that wealth keeps accumulating for the capitalist class.
Hey Cherub, I like how explained what M-C-M means, why it was created and how it works. I agree that capitalist pays for necessary labor time because, without labor or the working class, the wealth owners would not be able to make any profits or maintain their wealth.
The M-C-M cycle shows how capitalism grows wealth by turning money into more money. The cycle goes as follows: M(Money)-> used to buy C(Commodities) like materials and labor-> then sold for a higher price and ends with more M(money). The surplus Value, the extra money, comes from workers producing more labor than they are paid for. The surplus gets reinvested back into the business to provide profit that allows consistent increases in wealth. It’s a self-feeding loop that is driven by labor, goods and markets.