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- 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)
1. M-C-M’ is how capitalist stay healthy. In order to do M-C-M’ you must buy in order to sell for a greater amount. M is how much money was put into production , C is labor or commodity and M’ is how much money was mad but with a greater amount. The capitalist would never put in the same amount made M-C-M’ in order to get M’ your would have to use less money which is M. You can’t resell more than spent.M’ is the “general formula of capital.”
Hi Morayma, good anology. I also believe that in order for the capitalist to stay wealthy the solely depend on surplus plus value. Without attaining a profit the capitalist would not survive. Absolute and relative surplus value plays a pivotal part for the capitalist.
this is very detailed, good job
Yes, that’s the general idea. In my summary video, I’ll go over a specific example as well.
1. Explain M-C-M’ to show how capitalists maintain and increase their wealth.
In the article they dicussed the “M-C-M” which is how the capitalist become wealthy. To follow the concept M-C-M we need to ” buy in order to sell or in other words resell” what this means is that they need to buy in order to sell it a higher price than what they paid. In this case M stands for money and C stands for Commodity and M stands for the Money they spent except more of it. Capatalist maintain and increase their wealth because they want to make sure that they make more of M in the end , it always has to be more of it in the end then what they initially spent.
Good, also think of an example to illustrate your point explicitly. I’ll give one as well in my summary video for Module 5 this week.
1. Capitalists remain wealthy by exploiting the workers labor force, instead of having them put labor in for a longer period of time they cut this short and increase the surplus value time being spent on. The diagram M-C-M is showing the relationship between capitalists and production. They use their wealth that is established already and purchase commodities such as labor, resources and material for the job. They do this for the sole purpose to sell production for a profit. This will maintain wealth because as money is being spent each day by the capitalists they are still receiving profit from it at the end and increase their wealth by using the extra labor hours for surplus value.
Hey i like your statement “capitalist remain wealthy by exploiting the workers labor force.” workers are given a lot of work, long hours for a little bit of money which is unfair,
I like how you decided to format your answer!
Ok, you mention a lot of the key ideas, but how exactly do capitalists make their profit at the end of this M-C-M’ cycle?
1. According to the capitalists’ formula, M-C-M’, is the key to gain wealth. They start by buying in order to sell, rather than selling in order to buy. This is how they become wealthier in time. They buy products and sell it to an even larger amount then what they bought it for. For capitalists’ is an never ending cycle because the end product is simply more money.
hey, your example made me understand MCM better. I like your example”they buy products and sell it to an even large amounts” because that is whats going on in todays world with young entrepreneurs selling items off vendors and selling it for a more greater price.
Hi Bianka, I like your analysis. Additionally, I believe that relative and absolute surplus value. Capitalist exploit the labor power of workers to sustain their lives.
Yes, but if we had to give additional detail, what about this process makes them increase their wealth?
This article shows how capitalist become rich. MCM is the transformation of money into commodities and the change of commodities back again into the money of altered value. Meaning, they need to buy in order to sale. A better meaning would be, they need to buy in order to sell at a higher cost than what they paid for.
Hey Jasmine, your example helped me a little better. I like how you explained and gave examples.
Hello Jasmine, great explanation of the graph it is straightforward and shows the connection between capitalists and how they keep wealth.
Excellent summary – you mean to say, “they need to buy in order to sell for a higher PRICE”?
Question:
Explain M-C-M’ to show how capitalists maintain and increase their wealth.
Answer:
Capitalist maintain and increase their wealth thats associated with the M-C-M by displaying the strategies they use to increase and maintain their wealth by depending on relative and absolute surplus value. They will never use their money to purchase commodity that they could not resell. The greater the M’ equals M plus m, and “m” signifies the surplus value. Capitialist buys the labour power of workers but also the same capital to maintain means of production. For this system to work capitalist requires workers to work the same eight hours without increasing their wages and more strenious work production. Without surplus value capitalist can not stay rich.
yes, and what is “surplus value” here? The value that the worker produces by working, that he/she does not keep as salary, but goes in the pocket of the business owner. Or, in other words, the amount of value created by a worker, which is remains outside their salary (doing work for which you don’t get paid, because you’ve already created enough value for the boss, equivalent to the salary you agreed to work for).
To begin, it is important to acknowledge that the term, M-C-M’ is how companies remain profitable. M-C-M’ stands for, money – commodity – money’. predominantly, the function of it refers to buying in order to sell; it is a movement of exchange. Within the idea, a cost is made for an inexpensive item and is then sold for greater than what was spent. Evidently, money leaves and enters an enterprise daily, it’s the main fundamentals of a business. And so this diagram is regarded as the “general formula of capital.” It is referred to as so because in performing these manners is the true reason why capitalists are able to succeed. If not, no improvements would be shown but instead remain in place, which in fact is not desired by anyone.
Nice use of the key terms: connecting the formula to the profits of capitalist firms, and that fact that it represents an exchange of commodities (money is exchanged for commodity, which is itself exchanged for even more money).
M-C-M stands for money- commodity-money , and the meaning of it is based off of wealth. In the article they discussed M-C-M meaning how companies stay consistent with their wealth. They begin by buying in order to sell. They buy an item for a certain price and sell it for a larger amount and make a greater profit.
Hello Krisnelly,
I completely understood your response, it was very clear to me. I like your idea.
Hello Krinselly, Great response. The capitalists will buy and sell higher to remain wealthy and will gain more though the workers surplus hours.
Yes, and the big puzzle here is how/where the profits come from: surplus value and its extraction from the value created by the workers, makes possible such profits…
1. As indicated by the capitalists formula recipe, M-C-M’, is the way to pick up riches. They start by purchasing so as to sell, as opposed to selling so as to purchase. This is the way they become wealthier in time. They purchase items and offer it to a much bigger sum then what they got it for. For industrialists’ is an endless cycle in light of the fact that the finished result is just more cash.
and perhaps, that the main reason wealthy capitalists can’t stop being capitalists: the more wealthy they become, the more wealthy they wanna become…. forever…
M-C-M’ was seen as a new stage that the capitalist brought into play so that they can buy in order to sell unlike C-M-C which is selling in order to buy to stay alive and this was a basic diagram for labor power. In the eyes of the Capital (M’) means to become wealthier. (M’) is the money at the end of the transaction and its not the same as the money at the beginning of the transaction. Capitalist purchase everything including labor power for the price of “M” and labor power is used almost like a commodity . Money is transformed into the capital by changing into productive capitalism which includes buildings, tools, equipment, labor power, raw materials, and supplies
Nice summary using the main concepts!
1. Before capitalism came into the picture, there was a small-scale commodity production where peasants, as well as artisans, went to the market to acquire goods from the product of their labor (Jalee 22). At that time, the movement of the money could be described as:
Commodity (C) → Money (M) → Commodity (C)
The interesting thing about that transaction is that the commodity’s value in the beginning and the last stage was the same. However, after the introduction of capitalism, people bought to sell, and that changed the whole concept of exchange to become:
Money (M) → Commodity (C) → Money (M’)
In this case, the value of exchange M’ was more than that of M. That is because money was used to purchase commodities at a lower price than that intended for resell. As such, profit was made, and that is how capitalists made money. The difference between M’ and M is what makes a profit, and it is considered the surplus value (Jalee 23). As such, there was a need to ensure commodities were acquired at a lower price. When the peasants could not supply the capacity required, the capitalist opted to manufacture, thus starting the industrial revolution.
In M-C-M’ the second M is M prime which represents the initial investment and the surplus value or profit gained on top of the first capital after labor power is applied. M prime can never be the same as M because a capitalists goal is to eventually resell and make more from the money put in to buy the commodity. How this differs from the traditionally used CMC which has been used for centuries is that that there is no surplus value or profit involved after selling a commodity whereas the sole purpose of the capitalist is to obtain a surplus value even if it’s to come at the cost of the exploitation of workers. Although some framework has been made to protect the working class as to how much labour power can be obtained but despite that, the capitalists are always busy trying to find ways to increase that surplus value by increasing the labour while maintaining the same labour power.