- 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)
2 thoughts on “Discussion Board 5.2”
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How does a capitalist remain wealthy? Well first you must have the capital (m) to source materials and hire the working class aka “peasants” with the labor power to keep your business afloat. Commodities are defined as “the product of your labor.” Capitalist’s never use their money to buy commodities for personal use like a peasant would. They buy it to resell for a higher profit than what they initially paid.
MCM (Money-Commodity-Money) is capital to purchase a product to make a profit. Capitalists already possess money to buy commodities to make capital. Surplus value can be described as using the working class for their labor power which profits are passed onto the capitalists or owner of the business. Not without the worker’s consent of course. The worker’s labor power is sold at price value and they only profit two hours of an eight hour work day while the remains six hours are given to the capitalist to profit from. With this continuing cycle the rich will remain in a position to exploit the working class.
1. M-C-M stands for Money – Commodity – Money. This cycle is used for capitalists to get more money from labor. The reading explains C-M-C, which shows how one would get money for commodities to purchase different commodities. In terms of capitalists maintaining and increasing their wealth, the diagram changes to M-C-M. This shows that they are starting with money, buying commodities and using these commodities to generate finished products to sell for more money than previously invested. Surplus value comes into play with this diagram because it shows exactly how it works. Capitalists put in little money to buy products and labor and sell the ending result for a higher value to make a profit from the labor of those they initially hired.