Capitalists create wealth, by turning money into capital. This can better be understood, by understanding the contrast, inhabited by laborers. If we look at a wood sculpture, they sell their sculptures to buy food, to eat. That’s their cost. The money they make, they use to buy the things it cost to continue making money. This is called Small-Scale Commodity Production. Represented as C – M – C. But, for them, the money they make remains the same as the amount of money they need to afford their cost. Creating a linear cycle of wealth, that remains the same.

Capitalist’s on the other hand, don’t need commodity for necessity, because they already have money. So in their case, they don’t buy in order to consume. But rather, buy in order to resell. Which looks like: M – C – M’. Where the commodity and money of laborer remains the same, the money of a capitalist grows. This is because of surplus value. A capitalist purchases ventures, that use the labor of workers, to create goods. Because of the nature of human labor, they create much more value then it costs to maintain them. This allows the capitalists to continue to pay the workers. Which is how they sell their commodity for money. But for the capitalists, that surplus they make, is larger then the money they put into the venture, because of the labor power of their workers. This money, they put into other ventures. So that they can continue generating money, which allows them to ultimately own more. Which explains why the rich can continue to get richer.

One thought on “DB 5.2”

  1. Hi Annette, great breakdown. I like how you framed the laborer’s cycle as linear the sculptor just converts one use-value into another, so value in and out stay equal.
    One thing to add on surplus value it comes from labor-power being a unique commodity. A worker might only need 4 hours of labor to cover their own wage, but they’re contracted for 8 those extra hours are where surplus value comes from. The exchange itself can look fair, while the exploitation happens inside the production process, not the market transaction.
    Curious what you think does the reinvestment cycle accelerate naturally, or is it more that competition forces capitalists to reinvest just to survive?

Leave a Reply