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)
After reading Pierre Jalee: ‘How Capitalism Works”, (Monthly Review Press, 1977), p. 22-31, in my understanding M-C-M is usually utilized by the capitalist class as you must have money beforehand, to obtain your commodity. M-C-M means you use money to obtain a product and then make money from selling the product. It is different from C-M-C where you make your commodity to sell and obtain more means of production. The last M in M-C-M shows how capitalists use surplus value to avoid using their own capital to fund their production. The amount of money put into the commodity needs to be lower than what is received from selling the product so that business leaders can continue to maintain and increase their wealth.
