- 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)
4 thoughts on “Discussion Board 5.2”
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Through the M-C-M’ cycle, which Karl Marx has put forward, capitalists hold on to and even enhance their wealth. It starts with **M (Money)**, where capitalists begin with an investment; they then use this money to buy **C (Commodities),** which include raw materials, machinery and labour power. After the production these commodities are sold at a higher price than the initial investment, leading to M’ (more money), profit.
The center of gravity of this process is surplus value which is drawn from labour. Workers produce articles which can be sold at a price that is more than the cost of wages and other production expenses, resulting in the generation of profit for the capitalists. With a view to preserving and even enhancing their wealth, capitalists restrict the wages, enhance the productivity of workers and cut down on the production costs through automation and enhancement of efficiency. Moreover, they also seek to enlarge their enterprises on new markets, practice oppressing cheap labor, and employ financial tools, such as investing in stocks or real estate.
This way, by repeating this cycle and reinvesting the profits, capitalists ensure that the wealth remains in their ownership and contributes to the increasing gap between the wealthy and the rest, and their position as the owners of the means of production is secured.
Your summary of the M-C-M’ cycle effectively highlights the core dynamics of capitalist accumulation. It’s striking to see how the focus on surplus value and labor exploitation leads to a self-reinforcing cycle of wealth concentration. The points about how capitalists cut costs and expand into new markets reflect the ongoing challenges faced by workers today. Great job on recognizing the nuances of the situation.
Hi Anjel, I agree with you that Karl Marx’s cycle explains how capitalists grow and keep their wealth. It starts with M capitalists invest money to buy C, such as raw materials, machines, and workers’ labor. After production, they sell these goods for M’ making a profit. The key to this process is surplus value, which comes from workers. Workers create products that sell for more than what they are paid, allowing capitalists to keep the extra profit. To maximize this profit, capitalists keep wages low, push workers to produce more, and reduce costs through automation. They also expand their businesses into new markets, exploit cheap labor, and invest in things like stocks or real estate.
Hi! I really appreciate how your discussion gets right to the point, and I think you did a great job explaining the process of MCM. It’s cool to see that we share some similar viewpoints too. Well done!