Unlike small-scale commodity production (C–M–C), where people sell commodities in order to buy what they need for daily consumption, capitalist production (M–C–M’) buys things in order to sell them for a profit. In C-M–C, people cannot get many profits because the money they earn has to be spent on maintaining lives. However, capitalists use their initial money(M) to buy the means of production(factories, machines, and materials) and labor power of the working class to run their business. 

During a typical 8 hour workday, a worker’s shift is divided to two parts:

Necessary labor time: For example, in the first 4 hours, the worker creates value equal to their daily wage($150), which covers their basic living subsistence.

Surplus labor time: In the remaining 4 hours, the worker continues to produce products without receiving extra pay. 

During this process, workers’ labor creates tremendous value, but they barely get paid by a small part of it. Capitalists buy their labor power based on the wages covering workers’ daily subsistence; the rest value, which is surplus value(m), is the main reason that capitalists can increase their wealth. The result in M’=M+m, where M’ is the total expanded money the capitalist receives. After this cycle, capitalists can use these profits to enter the next cycle and keep increasing their wealth.