In Reading 5.1, the formula M–C–M’ explains how capitalists stay wealthy. They start with money, which is (M), use it to buy commodities (C) like labor and the materials that are needed, and then sell the complete finished product for way more money (M’). The difference between M and M’ is the surplus value, which comes from workers producing more than they’re paid for. Labor power is key here—it’s a unique commodity because it creates new value. Through surplus labor, capitalists begin to gain a profit. The cycle of buying to sell for more allows them to reinvest and grow their wealth consistently.
Unlike small producers (C–M–C), capitalists aim for endless profit. M–C–M’ shows how the system keeps wealth in the hands of those who own the means of production.