Wal-Mart’s cost efficiencies allow them to put downward pressure on both prices of goods on the market and prices offered by sellers. This contradicts Smith’s theory that the only regulator of market prices should be the self correcting forces of supply and demand. Small scale retailers cannot cope on the massive cost efficient level of the bulk buyers Wal-Mart and no longer have free access to equal resources due to Wal-Mart’s influence on supplier prices. Small and medium retailers are vital to economic development as they promote entrepreneurship, innovation and investment in American markets, provide employment (especially youth employment) and lead to the development of bigger companies and industries. The growth of the nation is stunted by Wal-Mart’s squandering of its competitors and by driving of factories out of America, which can lead to the destabilising of the economy, a reduction in money generated in the country and even to the collapse of various …show more content…
This capitalistic power has lead to Wal-Mart’s development into an oligopoly which would be heavily criticised by Marx. Marx believed that this influential power would result in a tip in the balance of power between the capitalists/bourgeoisie (Wal-Mart) and the labourers/proletariat (Wal-Mart employees). Marx emphasised that this shift of power leads to an exploitation of workers. Wal-Mart exploits employees through low wages, disallowing unions and by not providing insurance or medical aid to its employees enabling the entity itself to generate larger profits and increase its capital. The development of labour in large economic sectors impacts greatly on poverty and the economy, especially if it provides for the general well-being of workers. With the amount of power Wal-Mart yields it is able to provide employment to many, yet, despite this, the employment it provides does not wholly benefit the lives of its employees. The economic development is restricted in terms of uses of the country’s finances as the government has to compensate for Wal-Mart’s lack of basic care for its employees through welfare subsidy programs. The lack of employee protection may lead to a revolt (Predicted by Marx) through which employees could refuse to work for Wal-Mart. The loss of employment numbers will not only result in additional expenses for the government but too will negatively