Respond to the following question: Explain M-C-M’ to show how capitalists maintain and increase their wealth.

A capitalist remains wealthy by using the formula M-C-M’. The wealthy person already has money (M), that they possess from previous wealth or earnings which they use to purchase commodities (C) that are necessary for production, such as buildings, tools, raw materials, equipment, and labor power. Labor power is the most crucial commodity because it is what creates new value. Workers sell their labor in exchange for wages, but their work generates more value than what they are paid. After purchasing the means of production and labor, the capitalist then produces a product and sells or resells it for a value greater than the cost of production. This sale returns more money to the capitalist than they initially invested, and this increase in money is (M’)—the surplus value.

Most of the capitalist’s profit comes from surplus value, which is the unpaid labor from workers. This surplus labor is the additional time workers work after they have already earned their wages during part of their shift. Therefore, capitalists maintain and increase their wealth by exploiting the working class. As society progresses, the constant capital (such as raw materials and equipment) remains largely the same, but it is the variable capital—the wages paid to workers—that ultimately increases the capitalist’s wealth and surplus.