Explanation :In the capitalist class, individuals possess both wealth and the means of production. To comprehend how capitalists sustain and augment their wealth, we delve into the concept of M-C-M’. This diagram encapsulates the process where money (M) is initially used to acquire commodities ©, which are then sold to yield more money (M’). The essence lies in the circulation of capital the continuous cycle of investing in goods, selling them at a profit, and reinvesting. This mechanism, as explored in the self-assessment exercise questions 1-7, underlines the capitalist strategy of accumulating and expanding wealth through strategic financial transactions.

Answer:M-C-M’ represents the capitalist cycle of investing money to acquire commodities, selling them at a profit, and reinvesting to sustain and increase wealth.

Capitalists accumulate and grow their wealth by paying workers less than the value of the products they produce. This disparity allows capitalists to retain a larger share of the revenue generated by the sale of those products. It’s important to note that capital itself doesn’t set prices; rather, prices are determined by the labor invested in creating goods and services. This dynamic often results in workers receiving a smaller portion of the overall value they help to create, while capitalists profit disproportionately.

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)

• 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.

1. Capitalists maintain and increase their wealth by for example the worker creating the product for the capitalist pays him a lower salary than the value of the product . The capitalists ends up getting a larger amount of money while the worker earns less . Capital cannot price anything it is thing that is produced by labor .

Capitalists maintain and increase their wealth because they start the equation M-C-M off with money. This means that they don’t even sell a commodity in order to receive money to buy another commodity. It is harder when somebody has to sell a commodity to gain money because now they have to buy something more valuable than the commodity they have sold for the same price they were given for said commodity. When M-C-M ends with money or capital, more money than the initial amount, the capitalists can invest and keep the trend going.

1. Capitalists come to the table with capital and are able to buy themselves into the market as opposed to trading a product for money in order to create more products. The model M-C-M implies the capitalist uses their money to purchase a commodity in which they sell for a higher price than they originally obtained it for. Because capitalists do not create anything themselves, they are able to turn over profit at a higher rate by simply putting more of their money back in circulation and buying more product to sell, rather than spending time having to make it themselves. Eventually, as history has shown, the capitalist decides to become the overall manufacturer in which they can hire labor to make the product at a wage, and claim the surplus profit for themselves. This is how they are able to maintain their wealth.

M-C-M is a process used by capitalists to increase their wealth. The first stage is M, which stands for Money. Money is essential to establish a business. The second stage is C, which stands for Commodity. It refers to the investment made in materials, building, and labor power. The third stage is M, which represents the gain on investment. It includes labor, labor power, and means of production. This stage represents surplus value. Since the capitalists profit from these steps, they reinvest their surplus labor to maintain or grow their wealth. In this process, employees are responsible for all the hard work while the boss profits from their labor. This is an ongoing cycle of exploitation and abuse of power.

1. M-C-M’ (money-commodity-the starting value + the surplus values). We have seen that capitalists don’t produce labor power by them self but they have money and they are trying to increase the amount. In order to do that they use the (M-C-M’) where in this process they are going to buy a commodity with the money they have. In other words, they are going to invest this money. After acquiring this commodity they will increase its value making people put some labor in those commodities without rewarding them as they deserve in order to get more surplus money and reinvest it. This process of M-C-M’ basically explain how capitalist invest their money and exploit working class labor in order to maintain and increase their wealth.

1. What is the distinction that Reading 4.3 makes between owners and employees? Give an example of each.
2. How do you understand the quote by Adam Smith on pg. 28? What is it saying about labor?
3. What are your thoughts on the main argument of Reading 4.4 that class is NOT an identity?
4. How do you understand the argument Reading 4.4. makes when stating that “class structures are built around a close form of dependency”? What is this close form of dependency, and can you think of an example?