M-Money

C-Commodity

M-Money 

The way capitalists maintain and increase their wealth is by M-C-M. They start with money to be able to purchase commodities and labor which means this allows for production to move forward. Workers are then paid less than the value that they create, this is called surplus value and then their work gets sold on the market to make more money and capitalists end up with the money. Over time the capitalist class maintains and increases their wealth over time following this cycle.

1. “M-C-M” in the article refers to a capitalist investing money to end up with more money. The first “M” represents the money a capitalist begins with, which transitions into the “C,” representing the commodities a capitalist invests in to make more money, such as buildings and machinery. This lets workers use their labor power and materials to create new products. Lastly, after the products are sold, the final “M” represents the original money plus the surplus value generated. Capitalists can reinvest the surplus value in more resources to produce more products and gain more profit.

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)