Marx, M-C-M and Capital
This is a response to a recent article posted on medium titled ‘Explaining Marx’s M-C-M Formula for Capital, in which the author writes, “Money that circulates in the form of commodities is capital.” This is not accurate and confuses the issue. Money circulates in the form of money for the exchange of goods and services, that’s what an economy is. A commodity of one kind or another has been used for money but was never a very successful monetary system at creating prosperity for the general welfare of the economy. Today credit is created by the banking system monopoly as money for profit, which is the root problem in this system, the fatal structural flaw causing massive economic distortions. Money massively accumulated (BlackRock/Vanguard) becomes capital, an instrument of power able to dominate a market, an industry, or a government. Today accumulated money, capital, dominates all markets, industries, and most governments.
The M-C-M formula (money-commodity-money) is not a formula for capital. Every farmer invests and produces for a yield, that does not describe capitalism. What it describes is ‘free enterprise’ not capitalism, though they are often and wrongly conflated. The owner of the factory is not the capitalist but in this monetary system he is dependent on the capitalist. We have all been made dependent on the capitalist because they create all the money and very little can happen without money and money can be used to prevent things from happening as well. The capitalist provided the money (M) to the ‘owner’ at the very beginning as interest bearing debt, used to secure the labor and materials to produce the product © and the factory owner may also pay his workers less than the produce is worth in order to gain enough of a yield (M) to pay his debt to the capitalist who profits without having done anything but provide the contract and create the money out of thin air. The owner must deal with the liabilities of ownership in gaining his profits, the capitalist just profits. So, capitalism dominates the ownership of the means of production, exploits earth’s resources and labor, concentrates wealth, creates inequity, drives destructive growth, predatory competition and more. That is what capitalism does …but what IS capitalism?