In Reading 5.1, the diagram M–C–M′ helps explain how capitalists maintain and grow wealth. The idea is that capitalists begin with money (M), which they use to buy commodities (C). Commodities include not only raw materials and machines but also labor power—the ability of workers to do productive work. Workers then transform those commodities into finished goods, which are sold for a greater amount of money (M′). The difference between M and M′ is surplus value, which comes from the fact that workers create more value than what they are actually paid in wages.

This process shows how the cycle keeps capitalism going. For example, a factory owner might spend money to buy cotton, machines, and hire workers. The workers produce clothes that are sold for more than the total cost of wages and materials. The owner takes the surplus and reinvests it into another round of production, expanding wealth. This cycle is why capitalists are able to stay wealthy and even increase their wealth over time.