Imagine a big lemonade stand economy. 🍋
Capitalists (the lemonade stand owners) make lemonade each year.
Workers help make the lemonade and get paid with money (wages) to buy snacks and toys (MOS).
How it works:
At the end of the year, the owners have lemonade (C') and money (M').
They use some money (M) to buy new supplies (MOP: lemons, sugar) and pay workers (LP) for next year.
Workers spend their wages on snacks and toys (MOS), which buys back some lemonade.
Owners also use leftover money (m) to buy fancy stuff for themselves (like a new bike 🚴).
The tricky part:
If the price of lemons or snacks is too cheap, owners might lose money when selling them (lower profits).
BUT if they buy their own fancy stuff cheaply, they save money personally (yay for bikes!).
What happens?
In the business world, losing money on sales makes profits look smaller. 😢
But the money they save on personal stuff isn’t shown in the business accounts. 😎
So, value “moves” from the business piggy bank to their personal piggy bank.
In short:
When prices don’t match the “true value” of things, money shuffles around. If owners save on personal treats, their business profits look lower, but they’re actually just moving money to their own pockets! 🤑
Think of it like a magic trick: the money isn’t gone—it’s just hiding in a different hat! 🎩✨