Understanding M-C-M’ and How Capitalists Maintain Wealth
The diagram M-C-M’ stands for Money → Commodity → More Money. This represents the process by which capitalists make a profit.
- M (Money): The capitalist starts with money.
- C (Commodity): They use this money to buy a commodity, which often includes labor power—the ability of workers to work.
- M’ (More Money): After using labor to produce goods or services, the capitalist sells these for more money than they spent. The extra money, or surplus value, is profit.
This process shows how capitalists maintain and increase their wealth: by investing money into commodities (especially labor) and selling the resulting products for more money, capturing the surplus value created by workers.
