- 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)
When the aim is no longer to sell in order to buy but on the contrary, to buy in order to sell, or rather resell. The movement of exchange then becomes M (Money) – C (Commodity) – M’. Capitalists start with money, then use it to purchase commodities, including labor power, and then uses those commodities in production. Labor power then creates new value producing surplus value. The capitalist sells the finished product for more money than they originally invested in which is what M’ means.
