- 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)
Capitalist remains wealthy because they already have money they can use to buy products to create more products and sell them for more money. Something that explained that in the article was “the owners of capital can always put their money back into circulation and repeat their operations as often and as quickly as possible: buying to sell, starting with money to acquire more money, which thus enables them to increase their capital. This shows a reason of why they stay wealthy. Business owners can’t create wealth or profit without labor power. They make a profit off what they sell since they sell it for more than what it’s actually worth this is called surplus value which is all the extra money that goes into the owner’s money, not the worker’s. MCM’ The first M stands for money which is used to create commodities which is C. Then C is the amount of work/labor that it took in order to produce the final product and lastly M’ is money at the end of the transaction it is not the same as the first M it has a greater value.