Where do capitalists get their wealth?
Means of production.
I call it C(mp)
People's ability to work.
Their labor power. I call it C(lp)
The stuff the capitalist buys, those
commodities are made up of means
of production, C(mp), and labor power, C(lp).
Before the capitalist makes
more money, he first
returns to market to sell.
materials for the machinery
and tools to be used on.
C . . . C'
So the
source of profit
can't be in the tools,
machines, and
raw materials.
Then where do profits
generally come from?
By the way, Adam Smith saw it this way too.
He wrote this in his book The Wealth of Nations:
“The value which the workmen add to the materials resolves itself into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced. He could have no interest to employ them, unless he expected from the sale of their work something more than what was sufficient to replace his stock, to him.”
Most people live at the bottom. We build the pyramid that's resting on our backs.
At the top, capitalists
and their governments.
They pay a range of people to protect them
from us, and to keep us in our place.
Some people say that some of the people who keep us in our places are also workers. If someone is beating, pepper spraying, detaining, deporting, and shooting us, it doesn't really matter if they're workers or not. They're not on our side.
M-C...P...C'-M'
That peculiar commodity? It's
our ability to work.
Let's make a new society,
one that isn't pyramid shaped.
One based on principles like
"To each according to need"
and "Everything for everyone."
I call it
labor power.
Hungry? Need shelter?
Better have money to
pay.
We have to sell our labor power to get money for the things we want and need.
Moneybags must be so lucky
as to find in the market a
commodity with the peculiar
property of being a source of
value greater than what it
costs to purchase.
Commodification of what we need
compels us to sell our labor power,
our time and energy, to enrich
capitalists. And if no one wants
to buy our labor power, well...
Every capitalist buys from one and sells to another. If it was all a rip-off then every capitalist would rob as a seller and then be robbed as a buyer. In the end it would all come out even. How is it that every Moneybags comes out ahead?
We have to sell our labor power to get money for the things we want and need.
Moneybags buys something then sells something for more than he paid. Is it all just a rip-off? Capitalist robbing capitalist?
The key has something to do with the commodities in the
middle, the C in the middle of M-C-M'
I will call it M-M'
... but how does it
work?
Ah! It's not just M-M'. He buys and sells commodities. I call it M-C-M'
Capitalists turn money
into more money.
M- C -M'
He buys stuff.
Let's look closer.
He return to market
with some things to sell.
M- -M'
He buys stuff.
He return to market
with some things to sell.
He buys stuff.
M- C -M'
He return to market
with some things to sell.
He buys stuff.
A capitalist goes to
market with money.
He sells those things
for more money than
he spent at first.
A capitalist goes to
market with money.
He returns with
more money.
He sells those things
for more money than
he spent at first.
A capitalist goes to
market with money.
He sells those things
for more money than
he spent at first.
A capitalist goes to
market with money.
He sells those things
for more money than
he spent at first.
M- -M'
He buys stuff.
M-
A capitalist goes to
market with money.
He return to market
with some things to sell.
-M'
He sells those things
for more money than
he spent at first.
A capitalist goes to
market with money.
He returns from market
with more money.
What sort of stuff can
make value greater than
what it took to buy? What
is the capitalist actually
spending money on?
M- C
It's all M-C-M' but there's different kinds of commodities bought, different kinds of C.
A range of stuff.
He spends the
money on stuff.
A capitalist goes to
market with money.
What sort of stuff?
He spends money on
machinery and tools.
M- C -M'
He return to market
with some things to sell.
He buys stuff.
A capitalist goes to
market with money.
He sells those things
for more money than
he spent at first.
Of course, what he sells is different from
what he bought in the first place. There's
some change in the commodities. I call the
changed commodities C'. So really it's
M-C...C'-M'. But where does that
change come from?
A capitalist goes to
market with money.
So the capitalist's M-C-M' is really
M-C(mp+lp)-M' but that
doesn't tell us much more. How
does the capitalist end up
with more money?
He buys stuff.
C
C . . . C'
He buys stuff.
He return to market
with some things to sell.
A capitalist goes to
market with money.
He spends money on materials for the
machinery and tools to be used on.
He sells those things
for more money than
he spent at first.
He spends money on machinery and tools.
He spends money on materials for the
machinery and tools to be used on.
He sells those things
for more money than
he spent at first.
M- C
He spends money hiring people to use the
machinery and tools on the materials.
He spends the
money on stuff.
A capitalist goes to
market with money.
He spends money hiring people to use the
machinery and tools on the materials.
The heart of the matter must be
something that takes place between
C and C', during the ... the time away
from the market.
The capitalist buys machinery and tools,
from another capitalist who sells them.
Capitalists generally
buy things at their full
price. And they
generally sell things
at a price high enough
to make a profit.
Otherwise the sellers
of the machines,
tools, and materials
would be getting ripped
off regularly. They would
go out of business
and the buyer would not
be able to purchase
these products.
He return to market
with some things to sell.
C . . . C'
He buys stuff.
He return to market
with some things to sell.
He sells those things
for more money than
he spent at first.
A capitalist goes to
market with money.
The stage M-C represents the capitalist appearing on the market as an owner of money, M, looking to buy commodities, C. These commodities consist of a variety of objects (means of production) and of labor power.The stage C…P…C’ represents the process of production. The workers hired (ie, the labor power purchased) are set to work in production, P, using the other objects purchased – raw material, tools, machines, the physical space of the work place. The produce new commodities, C’.The stage C’-M’ represents the capitalist returning to the market as an owner of commodities, the end result of the production process P. The capitalist sells the products for more money than he spent over all.
He sells those things
for more money than
he spent at first.
The capitalist buys materials for the
machinery and tools to be used on.
These too are bought from another
capitalist who sells them.
Protecting the current wealth of capitalists and continuing the flow of wealth into capitalists' pockets are two of the main organizing principles behind capitalist society.
What happens after the capitalist
buys things in the market and before
the capitalist returns to market?
This is part of why capitalist societies are pyramid shaped.
M is money. The dashes are exchanges where one capitalist buys a product that another capitalist sells. C is the commodities that a capitalist buys. The elipses ... represent the passage of time in production. P is production. C' is the new commodities, the product of production. The capitalist sells these for M'. M' is a greater amount of money than the initial amount, M.
Capitalists get to
own that wealth.
This is exploitation.
Workers do
the work that
makes the wealth.
C'
-M'
Workers make things
and perform services
that a capitalist sells.
In general the money employers make from selling the products of workers' labor is greater than what employers pay out in wages. Otherwise they start to fire people. Capitalists make more money from our labor than we get paid in wages. Why else would companies hire people? Surplus value, the source of capitalist wealth, comes from workers. Our labor produces wealth. Capitalists pay us a portion of that wealth, and keep the rest.
By the way...
to summarize
my abbreviations
and formulas...
The capitalist takes the
new commodities back
to market to sell.
M- C
He spends the
money on ...
A capitalist goes to
market with money.
The capitalist
pays people to
use the machinery
and tools on
the materials...
This produces new commodities, C'. That is, employees make new stuff that the capitalist owns.
He sells those things
for more money than
he spent at first.
He buys stuff.
He return to market
with some things to sell.
So the real source of
capitalist wealth is
outside the market,
in production, P.
Surplus value comes from
production, but where,
exactly? Let's go back
to the market.
So the real formula
for capitalism is
M-C...P...C'-M'
The difference between the money at
the start, M, and the money at the end,
M', is what I call surplus value.
M - C . . . P . . . C' - M'
He buys stuff.
He returns to
market with
some things
to sell.
A capitalist goes to
market with money.
He sells those things
for more money than
he spent at first.
M - C . . . P . . . C' - M'
He returns to
market with
some things
to sell.
A capitalist goes to
market with money.
He buys stuff.
He sells those things
for more money than
he spent at first.