According to the video and reading 5.1, I understand that capitalist and wealthy people maintain and grows their businesses and money by using system M-C-M. Which is:

M- Which means Money. The capitalist and wealthy people already have and they will invest to make more money.

C- Means commodity, which i mentioned already for what capitalist going to spend their money in order to grow and maintain their money.

M- also means money, which comes from investment and labor which their worker brings to them.

In general, capitalist and wealthy people maintain their wealth by investing their money to commodity and machines and workers which brings their labor power to do labor and getting paid less than how much labor they spend. And most of the profits which comes from them gets capitalist and owners of the business which they use cycle of M-C-M.

The capitalist class maintains and grows its wealth by using a cycle called M-C-M’, where money is used to make even more money through the exploitation of labor. It starts with M (money) a capitalist invests money to buy commodities (C) like materials and labor. These are used to produce something that gets sold for M’ (more money than they started with) to gain a profit.

The reason this creates profit is because of surplus labor which is where workers are paid less than the value they actually produce. For example, if a worker produces 8 hours worth of value but is only paid for 4, the extra value from those other 4 hours becomes profit for the capitalist.

Unlike regular people who spend money to buy what they need (C-M-C) capitalists are focused on spending money just to make more and because they can keep repeating this process they continue to build wealth while workers often stay in the same place. This cycle is the foundation of how the wealthy stay wealthy in a capitalist system.

There is a lot to unravel when we talk about how Capitalists remain wealthy. However, from my perspective, and basing my opinion on what reading 5.1 explains. The capitalists started by reselling commodities and then became producers. The diagram of how they remain wealthy M-C-M’ explains as: Money acquires Commodities, which is re-sold by an increment on its original value. However, in this modern society, the capitalists became the producers, and used the original money that was acquired from the formula M-C-M’ to industrialize the product and buy the worker’s labor. However, by industrializing, the capitalist owns now the worker’s labor, and by using a contract now owns the surplus value of what the worker produces. The way I understand it might be all under the capitalists’ actions: The capitalists, by industrializing, acquires machinery and equipment (M) to make a product, then uses the workers labor and gives them a wage (C) which represents a fraction of the total value of the product, and by contract the capitalists own all the Surplus Value for themselves (M’).

From our class I learned about that rich people in society called capitalists stay rich because they already have their own money and lots of other things like buildings, machines, and businesses. These are called the means of production. But they actually keep getting richer with a formula. The formula M-C-M′ helps me to understand.

M– means money. The capitalist starts with money they already have.

C– means commodities. They use that money to buy things they need to run a business, like machines, supplies, and most importantly, worker’s labor power.

M′– means more money. After using the things, they bought to make products, they sell those products and end up with more money than they started with. That extra money is called surplus value.

So, where does that extra money come from? It comes from the workers. When someone works for a company, they get paid a number of wages, but they usually make much more value for the company than what they’re paid. For an example, if you work eight hours and create $120 worth of goods, but you only get paid $60, the extra $60 goes to direct to owner. That’s profit or what we call surplus value. That’s the main point of M-C-M′– the rich people use their money to make more money by buying labor power and selling the products for profit. They stay rich because they have their own the businesses and keep the extra value created by workers.

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)

Both Small-scale commodity production and buying in order to sell, involve the exchange of goods for profit, the key distinction lies in the source of those goods to sell.

Small-scale commodity production can be expressed as C-M-C, meaning selling something you made in order to buy something you need. On the other hand, buy in order to sell can be expressed as M-C-M’, which is buying something with the intent of selling for more money. 

In the context of capitalist societies, Karl Marx used the formula M-C-M’ to explain how capitalists maintain and increase their wealth. 

In summary:

• M: Represents the capital that the capitalist invests.
• C: Represents the commodities the capitalist purchases with that money, ie., raw materials, machinery, and labor power.
• M’: Represents the larger amount of money (M + surplus value) the capitalist receives after selling the produced commodities (also known as profit or surplas value). 

An example of M-C-M’ can be found in the real estate industry, where wealthy businessmen or businesswomen buy real estate with the intention of reselling for a profit, also known as “flipping”. This process involves purchasing a property, often renovating it, and then selling it for a higher price, aiming to get a quick profit, often referred to as a surplus value. The seller then puts their surplus value back into circulation and repeats this as often and quickly as possible.

In the property flipping example:

M: Represents the initial investment or capital that the capitalist puts in.

C: The commodity in this case is the property – the property is often in a state that requires renovation or improvement to increase its value.

M’:The capitalist then sells the renovated property for a higher price (M’) than the initial money. The difference between M’ and M represents the surplus value.

The property flipping example  highlights one of the many ways how capitalists use their money to purchase a property (commodity), invest in its improvement, and then sell it for an increased amount of money, thereby increasing the value of their assets and therefore ensuring that wealth continues to grow and expand, creating a self-reinforcing process across generations.

The formula M–C–M′ stands for Money → Commodity → More Money, and it explains how capitalists grow their wealth.

• M (Money): Capitalists start with money.
• C (Commodity): They use that money to buy the means of production (like machines and materials) and labor power (workers).
• M′ (More Money): They sell what’s produced for more money than they spent — the extra is profit or surplus value.

This profit comes from workers producing more value than they are paid. By repeating this cycle, capitalists keep increasing their wealth. The system isn’t about meeting needs — it’s about turning money into more money through labor.

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)