- 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)
The diagram M-C-M can be explained as the general formula of capital which means Money-Commodity-Money. Therefore, (M) represents money that capitalist earned/savings which then buys the commodities (C ) such as raw materials, machinery, factories/buildings and labor power which are produced by capitalist. (M) represents more money which is basically the profit that was made when an item is sold however, capitalists can maintain and increase their wealth by making profits and paying workers less and that is implementing the surplus value “Without surplus value the capitalists could not have come into being, nor could they survive, so that it is always in their interests to seek to increase it either by playing on relative or absolute surplus value.”
