Posted on by YIYING

Yiying Wu-“M-C-M”-Module 5.2

M-C-M’ is the basic cycle that capitalists use to make money. The capitalist starts with M(money). They use this money to buy things they need for production. This leads to C (commodities), which include the means of production and labor power. Means of production includes buildings, machines, and raw materials. Under capitalism, these are privately owned. Labor power is what workers sell when they go to work. Workers sell their ability to work in exchange for wages. After production, the capitalist has M’ (more money) than they started with. The extra money (M’ – M) is their profit. 

The secret to making profit is in labor power. When working-class people sell their labor power, they get paid wages. These wages cover their basic needs like food and housing. But workers must work longer hours than what their wages actually pay for. 

Capitalists try to increase their profits in several ways. They use downsizing, speedups, and contract labor. These methods help them get more work from fewer people. They can also make workers work longer hours or work more intensely during the same hours. This cycle never stops. 

Capitalists use M-C-M’ over and over again. Each time, they reinvest their profits to make even more money. This is why most wealthy Americans stay wealthy through ownership and investment, not through working. Many also start with inherited wealth from their families. When few people control most of the financial power, they can manipulate prices more easily. Meanwhile, workers’ wages don’t keep up with rising prices. This pushes working people deeper into debt while capitalist wealth keeps growing.​​​​​​​​​​​​​​​​

Posted on by Dakota Dickey · 1 Comment

Dakota Dickey – Module 5.2 The Ownership Equation

  1. Explain M-C-M’ to show how capitalists maintain and increase their wealth.
  • The owning class is able to not only make money on their investments but as well continue the growth of their wealth by payments of dividends from their investments.  When the capitalist makes a purchase they in turn are looking for a payment from the purchase, but different from the laboring class who trades time for money, the owner does not trade; he is still in possession of the purchase and receives a payment for putting the system in place.  So in the end they have the money which is used to purchase (M which then goes to the C) and in turn pays out a dividend on their principle (M`).  In the end they are left with more money because they did not trade Time for Money (T-M) they created a system of owning principle and they paid a dividend. 
Posted on by Arto Artinian

Discussion Board 5.2

  1. 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)