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)
Jalee outlines how capitalists increase their money in the text “How Capitalism Works.” Capitalists remain wealthy because Capitalism is an economic system in which private individuals own the means of production, and production levels are determined by free-market competition. Capitalism can cause inequality, failure to markets, resulting in busting their economic cycles. Capitalists gain a lot of money from doing this, while their vendors don’t earn as much.