The diagram M–C–M’ shows how capitalism works at its core. It starts with M (Money). A capitalist begins with money, this is their starting point. But unlike a regular person who uses money to buy things they need, the capitalist’s goal is not consumption. Their goal is to make more money. Next comes C (Commodity). The capitalist uses their money to buy commodities. But these commodities aren’t for personal use , they include things like raw materials, machines, buildings, and most importantly, labor power (workers’ ability to work). These are the things needed to produce goods. After production happens, the capitalist sells the new commodities on the market. This leads to M’ (Money Prime). The prime symbol ( ’ ) is important because it means the capitalist ends up with more money than they started with. So: M’ = M + surplus value (profit). That extra amount ,the profit, is what keeps the capitalist wealthy and allows their wealth to grow. The key idea from the reading is that capitalists don’t just sell to buy like peasants or artisans once did (C–M–C). Instead, they buy to sell in order to gain more money. And they can repeat this process continuously. Every time they reinvest their money into production, they aim to end up with even more money than before. So how do they maintain and increase their wealth? They do it by constantly reinvesting their money into commodities (including labor power), producing goods, selling them, and keeping the surplus value. Since workers are paid wages that are less than the total value they produce, the difference becomes profit for the capitalist. That profit is added to the original money, creating M’, which can then be reinvested again.
