Explain M-C-M’ to show how capitalists maintain and increase their wealth.
Learning about M–C–M’, helped me understand how capitalists stay wealthy. They begin with money (M), and instead of spending it on things for themselves like in C–M–C, they use it to buy commodities (C) such as machines, raw materials, and labor power. Labor power matters because it is the only commodity that can create new value. Workers get paid enough to meet their basic needs, but during their workday, they produce more value than what their wages are worth. The extra unpaid work is surplus labor, and it leads to surplus value. When the products are sold, the capitalist ends up with more money than they started with (M’). That extra money, or profit, keeps the system running. By repeating this cycle over and over, investing money to make more money, the capitalist class maintains and increases its wealth over time.