The understanding of the capitalist class and their maintaining of the increase of their wealth, the contrast of the difference of social classes operating with the use of the economic formulas that go into detail from the reading from “How Capitalism Works”

From then up until now, everyday life follows this formula it being C-M-C (Commodity–Money–Commodity). For example, a worker brings a commodity, their labor power to the market to sell for money and they use that to purchase more commodities like food and housing that they personally need. This cycle shows the value is equal from beginning to end with the goal being survival. The capitals operates the opposing way using thus formula of M-C-M (Money–Commodity–Money). The money is what the capitalist starts with . The commodities bought for manufacturing. Instead of just trading finished goods, it explained that the capitalists realized they can’t create endless wealth from buying and selling to each other . Instead, they must become manufacturers using their money from the start (M) to buy specific commodities (C). This is the means of production (buildings, machinery and raw materials ) and the labor force. The unique role of labor shows these elements being brought together, the physical means of production are transferred with their value towards the new products . The human labor and exercising of the labor force is active and transformative, leading to labor being the sole source of new economic value. Money prime and the surplus value are the capitalist buying labor power at the market value which in turn generates a higher amount of the actual labor during production, the workers gain more value instead of wages. The capitalist sells the final products for a higher sum of money (M). This mathematical relationship is M’=M+m leading m to be the gain, profit, or surplus value. Capitalists maintain and increase their wealth by reinvesting over and over again M’ back into that cycle to grow steadily with their means of ownership while capturing the surplus value that comes from the working class.

M -C – M means a capitalists starts with money that being the M. Uses that money to buy commodities that being C which can be materials, equipment, and labor power. The last M would stand for more money after they sell the product. The extra money that comes is called the surplus value created by workers. It allows capitalists to make profit, reinvest their money, and then continue to increase their wealth.

M-C-M’ shows how a capitalist starts with money and uses it to make more money. The first M is the money they already have. C is the use of the money to buy things needed for production such as materials, equipment, and labor power. The workers then create a product using their labor. The product is sold for more than what the capitalist originally spent. That extra amount is the surplus value. M’ is the money they are left with after making a profit. The profit is then used to repeat the process and continue building their wealth.

From the reading, before capitalism, small producers followed the C-M-C pattern. A weaver would sell cloth for money, then use that money for food and other necessities. The value at the end would be the same as the start, and since a weaver couldn’t sell more cloth than they’d already made, there was a natural limit. The general formula of capital, M-C-M’, reverses this. The capitalist buys a commodity specifically to resell it for more money than what they spent. M’ equals M plus a surplus, called surplus value.
Labor power is the one commodity that produces more value than it costs, and that value is created inside the production process itself, not at the moment of sale. Part of the working day is necessary labor, the time it takes a worker to produce value equal to their own wage. Everything after that is surplus labor, unpaid, and its output is surplus value. In the reading’s example, a worker paid 60 units for an 8-hour day needs about four hours to cover their own wage. The other four hours go unpaid, a 100% rate of exploitation. Unlike the C-M-C pattern, M-C-M’ has no natural limit, capitalists reinvest the M’ as new capital and repeat the cycle on a larger scale each time. The actual mechanism behind staying wealthy means no personal production, but buying labor power for less than the value it creates and reinvesting the surplus. Extracting surplus value isn’t a personal choice, it’s built into the system itself. This is why the reading argues there’s no such thing as a good capitalist, only more or less bad ones.
Take a furniture manufacturer with $10000; they then spend it on lumber, machinery, time on the machine, and a day of labor. By the end of that day, the workers have produced furniture worth $14000, the $4000 difference is the surplus value, created during the labor hours beyond what it took to cover the workers’ wages, and it becomes next day’s/month’s larger starting capital.

I understand M-C-M’ as the process of creating surplus value and the end goal of the capitalist. Capitalists maintain and increase their wealth by making a profit through surplus value. This means purchasing labor power and using it in the production process. We understand from the reading that money becomes capital when it is used in a process aimed at generating more money through production and the creation or extraction of surplus value. The M represents the money the capitalist starts with, while M’ represents the money they end with after gaining surplus value. Marx also argues that the special characteristic of labor power is that, when it is put to work, it can create more value than what the capitalist paid for that labor power.

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.I). 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).

M-C-M’ means money is used to buy things needed for production, like materials and labor. Those things are used to make products that are sold for more money. The extra money is the profit, which allows the capitalist to increase their wealth.

so the formula M-C-Mprime basically means money, commodity, and more money. the capitalist starts with money (M) and buys commodities (C), which includes things like equipment, raw materials, and paying workers their hourly wages. then, those workers use their labor power to make the products, which brings us back to the labor theory of value showing that human labor is what actually creates all the worth and wealth. after that, the capitalist sells the finished goods on the market for more money (Mprime) than they started with. the main way they stay rich and keep increasing their profits is by paying workers lower wages than the actual value of what they produce. on top of that, they use tactics like downsizing, speedups, and contract labor to cut costs and squeeze more out of working people.

1. 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. 

1. 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)