M-C-M’ is a model that explains how capitalists maintain and increase their wealth. It stands for “Money-Commodity-More Money,” and refers to the process by which capitalists invest money in a commodity, sell that commodity for a profit, and then use that profit to reinvest in more commodities.
Here is how the process works:
- Money: A capitalist starts with a certain amount of money, which they use to purchase a commodity.
- Commodity: The capitalist buys the commodity with the intention of selling it for a profit. The value of the commodity is determined by the market, and the capitalist hopes to sell it for more than they paid for it.
- More Money: The capitalist then sells the commodity for a profit, which is the difference between the price they paid for it and the price they sold it for. The profit is the capitalist’s reward for taking on the risk of investing in the commodity.
This process can be repeated indefinitely, as long as the capitalist is able to continue buying and selling commodities for a profit. By doing this, capitalists are able to maintain and increase their wealth over time.
