Explain M-C-M’ to show how capitalists maintain and increase their wealth.

The M-C-M model is the capitalist cycle of wealth. Money Commodity and More Money. This is how the wealthy exploits labor by reinvesting in surplus value. They essentially turn money into more money.

The formula describing what the capitalist needs to do in order to create wealth for themselves is : M-C-M

For the capitalist this process begins with them already having capital. They’ve generated so much wealth they have extra. (Money) What they decide to do is invest $50,000 to start a new business that will make commodities. They invest in a warehouse, got the fancy robots, trucks, etc. This is their means of production. (Commodities) They go on to hire over 300 people to now work in this new factory. The employees typically operate the machinery creating products and they go out and deliver the products with the trucks. The employees tend to work 50-60 hours a week earning $20 an hour. This is what we consider labor power. The employees of the factory create, pack, ship, and deliver the products that are worth millions and millions in sales. They generate over $200 million in value but are only paid $10 million. The surplus value (the profit of $190 million) goes to the capitalist who exploited the workers. Thus creating more money for their own pockets (Money)