English 200

Source: Hacker Handbooks (Boston: Bedford/St. Martin’s, 2013). This paper follows the style guidelines in the Publication Manual of the American Psychological Association, 6th ed. (2010).

Analytical Essay, APA Style (Sociology)

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Running head: SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 1

The Secret of Walmart’s Success: A Marxian Analysis

Hannah Elwell

University of Southern Maine

Author Note

This paper was prepared for SOC 300, Sociological Theory,

taught by Professor Cheryl Laz.

Full title, writer’s name, and school halfway down the page.

An author’s note (optional) gives the writer’s affiliation and specific information about the course. It can also provide acknowledgments and contact information.

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6/12

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SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 2

The Secret of Walmart’s Success: A Marxian Analysis

What do big-screen TVs, bar soap, plastic building blocks,

and strawberry toaster pastries have in common? All of these

seemingly disparate items—along with many more—can be found

on the shelves of your local Walmart. The retail chain offers a

stunning variety of consumer goods and groceries all under one

roof, from electronics to apparel to cleaning supplies to frozen

food. Walmart also offers certain services along with its products.

A number of stores contain their own hair salons, photography

studios, auto centers, or pharmacies, and some even provide

health care, boasting walk-in clinics and vision centers where

customers can receive eye examinations and other routine clinical

services from independent health care professionals.

In every sense, Walmart is a massive corporation. The

buildings that house the shelves full of consumer goods are

colossal, with the average Walmart Supercenter measuring 185,000

square feet (“About Us,” n.d.). Walmart stores are large not just

in size but also in number: There are more than nine thousand

stores across 15 different countries, and they collectively employ

2.1 million people (“Walmart Stores,” 2011). As the world’s largest

company, Walmart is enormously successful and powerful. Writer

Charles Fishman (2007) noted in his article “The Wal-Mart You Don’t

Know”1 that the retailer “does more business than Target, Sears,

Kmart, J.C. Penney, Safeway, and Kroger combined.”

1In 2008, Wal-Mart changed the name of its stores to

Walmart.

A short analytical paper often does not require an abstract or headings.

A source with no author is cited in text with the first word or two of the title; “n.d.” indicates that the source has no date.

Elwell begins by describing Walmart’s size and scope physically and economically.

Elwell uses a footnote to explain why Walmart is spelled in different ways in her own text and in her sources.

Full title, repeated and centered, not boldface.

Source: Hacker Handbooks (Boston: Bedford/St. Martin’s, 2013).

SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 3

So what is the secret to its economic success? Although

Walmart is a modern phenomenon, the answer to this question

can be found in the nineteenth-century teachings of one of

modern economics’ most influential thinkers, Karl Marx. From

a Marxian perspective, Walmart can be seen as the epitome of

capitalism. Its success is born from the exploitation of waged

labor and the fetishism of commodities—two defining aspects of

our modern capitalist, consumer culture.

The capitalist system is marked by a concentration of

wealth and resources—instead of being equally divided among all

members of society, wealth and resources end up in the hands of

a select few (the bourgeoisie), who then gain control over those

with little or no resources (the proletariat), thus creating class

antagonism between the two. In The Communist Manifesto, Marx

(1848/2011) noted that industrial society was characterized by a

“distinct feature: it has simplified class antagonisms: Society as a

whole is more and more splitting up into two great hostile camps,

into two great classes directly facing each other: bourgeoisie and

proletariat” (p. 53).

It is important to note that as a corporation and not a group

of people, Walmart does not have any actual class interests of its

own. However, those who stand to make a profit from Walmart’s

capitalist enterprises are certainly members of the bourgeoisie

and thus are representatives of that class. Similarly, those who

work for Walmart are members of the proletariat. Thus, Walmart

becomes a perfect example of the class antagonism that Marx

described in The Communist Manifesto.

Elwell states her thesis and indicates that she will organize her analysis around two Marxian concepts.

For a republished work, the date of original publication is given before the date of publication of the current source.

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SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 4

An examination of the ways in which these two classes work

against each other is key to understanding how Walmart is so

profitable. In Capital, Marx (1867/2011) explained the difference

between the ways in which the owners (the bourgeoisie) and the

workers (the proletariat) relate to capital when he noted that

“the circulation of commodities is the starting-point of capital”

(p. 73). However, for the bourgeoisie and the proletariat, the

form that this circulation takes is markedly different. For the

proletariat, it can be illustrated by the formula C-M-C: exchanging

a commodity (C) for money (M) and then exchanging that money

for another commodity (C). For the bourgeoisie, the formula

changes to M-C-M’, or exchanging money for a commodity that

is then exchanged for more money (M’). Marx elaborated on this

distinction:

The circuit C-M-C starts with one commodity, and finishes

with another, which falls out of circulation and into

consumption. Consumption, the satisfaction of wants, in one

word, use-value, is its end and aim. The circuit M-C-M, on

the contrary, commences with money and ends with money.

Its leading motive, and the goal that attracts it, is therefore

mere exchange-value. (p. 74)

Of course, the bourgeoisie is not simply exchanging one sum of

money for the same sum of money, but rather for a greater sum.

In the case of the M-C-M’ circuit, in Marx’s words, “More money

is withdrawn from circulation at the finish than was thrown into

it at the start. . . . The . . . process is therefore M-C-M’ . . . the

original sum advanced, plus an increment. This increment or

excess over the original value I call ‘surplus-value’” (p. 74).

Topic sentence provides a transition to a fuller explanation of “class antagonism.”

A quotation longer than 40 words is indented without quotation marks.

The page number is given in parentheses after the final period of the quotation. No period is used after the parentheses for an indented quotation.

Ellipsis dots indicate words omitted from the source. Four dots indicate that a complete sentence has been omitted.

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SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 5

This surplus-value is how Walmart makes its profit—spending

money to get commodities and then selling the commodities for a

higher price. The secret to this formula is production. Producers,

or suppliers, do not simply buy a commodity and then somehow

sell that same commodity back at a higher price. Rather, they buy

commodities—for example, cloth, thread, and cotton stuffing—and

with them produce a new commodity—perhaps a throw pillow—

that they can then sell for a new, higher price. As a retailer,

Walmart does not produce its own commodities, so it does in

fact buy and then sell the same commodities (the throw pillows,

for example) at a profit. It counts on its suppliers for the actual

production work. Walmart also counts on its suppliers (or rather,

pressures them very strongly) to keep the cost of their production

work low so that Walmart can make a profit from the commodities

it buys from them.

Labor is a necessary part of production. Fortunately for

Walmart and its suppliers, it is quite easy for someone who owns

the means of production to take advantage of others’ labor. Human

labor, according to Appelrouth and Edles in their introduction

to Marx’s Capital (1867/2011), is unique because it is “the one

commodity that is exchanged for its value while being capable of

producing more than its value” (p. 64). So when workers are being

paid a wage to produce certain products, the profit these products

will bring the employer is greater than the workers’ wages. Suppose

workers are paid a wage of $9.00 per hour to produce throw

pillows, and in one hour one worker can make three throw pillows,

which are then sold for $15.00 each. The employer has made

Elwell connects Marxist theory with Walmart’s practices.

Elwell begins to discuss the first part of her analysis.

Elwell uses a concrete example to explain the theory of exploitation of labor.

In a signal phrase, “and” links the names of two authors. In parentheses, an ampersand (&) is used in place of “and.”

Source: Hacker Handbooks (Boston: Bedford/St. Martin’s, 2013).

SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 6

$45.00 from each worker’s labor and paid the worker only $9.00,

leaving the employer with $36.00.

This is what is meant by the exploitation of labor. The

workers do not get to keep the fruits of their labor; instead,

most of the profit goes directly to the employer, while the

workers keep only a small portion. The workers have exchanged

a commodity (labor) for money. They must then exchange that

money for necessary commodities like food and gas. These

commodities are quickly used up, meaning that the worker is then

left with nothing and must continue to go back to work every

day, exchanging labor for more money to then exchange for new

commodities. It is very difficult for workers to get ahead, because

any money they make must go toward the purchase of quickly

consumed commodities.

Because employers own the means of production, they

have a distinct advantage over the workers. With no choice but

to operate by the C-M-C circuit, the workers must sell the only

commodity they own (labor) to the employers, and the money

earned in return is soon spent on more commodities, so the

workers never earn a profit. The employers, however, use money to

buy commodities, including the labor of the workers, and through

the process of production transform these commodities into more

money, which is then used to buy more commodities, and on

and on, reaping more profit along the way. In this manner, the

bourgeoisie exploits the labor of the proletariat for profit, growing

increasingly wealthy while the workers continue to struggle to

get by.

Source: Hacker Handbooks (Boston: Bedford/St. Martin’s, 2013).

SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 7

This is a key element in Walmart’s success. The retail chain is

famous for its low prices, enticing customers to shop at Walmart

and save money rather than shop somewhere else and spend

more. The irresistibly low prices, however, have a very high human

cost; that is, Walmart is able to keep its prices low because, in

addition to forcing its suppliers to exploit their workers’ labor, it

keeps the wages it pays its own workers low to increase its profit.

These low prices are related to another element of Walmart’s

success: the fetishism of commodities, or treating items as if

they possess what Marx (1867/2011) referred to as a “mystical

character” (p. 70). In other words, there is something about

commodities, in addition to the low prices, that induces us to

buy them. In Capital, Marx (1867/2011) explored the interesting

relationship between people and the products of their labor.

He wrote, “There is a definite social relation between men, that

assumes, in their eyes, the fantastic form of a relation between

things” (p. 70). To put it another way, we as a society have

stopped relating so much to people and started relating to the

things that other people make. But we don’t see these things as

the result of the labor of our fellow human beings. Instead, we

view them as taking on qualities and powers of their own—the

“mystical character” that Marx described. We buy consumer goods

because of what we perceive they can do for us. For instance,

when we buy lipstick, the thought of who made that lipstick very

seldom, if ever, crosses our mind. Instead, we see the lipstick as

its own entity, possessing a special ability that its purchase will

then pass on to us: Perhaps it will make us more sophisticated

Elwell sums up the first part of her analysis and connects the exploitation of labor directly to Walmart’s low prices.

Because the source is cited in the signal phrase at the beginning of the sentence, only the dates and page numbers are given in parentheses.

Elwell provides a transition to the second part of her analysis.

An example illustrates what mystical character means in modern terms.

Source: Hacker Handbooks (Boston: Bedford/St. Martin’s, 2013).

SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 8

or elegant. This is the power of consumer goods. It becomes

even more potent when coupled with the power of money, which

Marx (1844/2011), in his Economic and Philosophic Manuscripts

of 1844, described in this way: “It [money] converts my wishes

from something in the realm of imagination, translates them

. . . from imagination to life, from imagined being into real being.

In effecting this mediation, money is the truly creative power”

(p. 49). Money can make us whatever we want to be, if we can

only afford the right consumer goods. The attraction of Walmart is

that its prices are so low that when we shop there we can afford

to buy, and thus to be, whatever we desire.

The secret to Walmart’s success, then, is not a fresh one.

Walmart profits off the labor of the workers who manufacture

its products in factories and the workers who sell the products

in Walmart’s stores. The low cost of this labor enables Walmart

to keep its prices low, thus enticing consumers to buy the

products it offers. It counts on our national obsession with

consumer goods, as we are so attracted to these low prices that

we generally fail to consider how they are so low. This is not

revolutionary; it is simply an example of capitalism at its best—or

worst, as Marx perhaps would see it. The exploitation of labor and

the fetishism of commodities were explained by Marx generations

ago, long before the existence of Walmart was even dreamed of.

Walmart is thus a model of a modern application of these old

concepts, refined and made more effective over the years. While

these concepts are far from new, they are still very powerful and

relevant.

Vivid quotation from Marx reinforces Elwell’s analysis.

Elwell establishes a link between Walmart’s profitability and Marx’s theory.

Elwell concludes by summing up her thesis, showing that Marxian analysis can be applied to a modern phenomenon.

Source: Hacker Handbooks (Boston: Bedford/St. Martin’s, 2013).

SECRET OF WALMART’S SUCCESS: A MARXIAN ANALYSIS 9

References

About us. (n.d.). Walmart corporate. Retrieved from http://

walmartstores.com/AboutUs/7606.aspx

Fishman, C. (2007, December 19). The Wal-Mart you don’t know.

Fast Company. Retrieved from http://www.fastcompany.com

/magazine/77/walmart.html

Marx, K. (2011). Capital. In S. Appelrouth & L. D. Edles, Classical

and contemporary sociological theory (pp. 63-76). Los Angeles,

CA: Pine Forge Press. (Original work published 1867)

Marx, K. (2011). The Communist manifesto. In S. Appelrouth &

L. D. Edles, Classical and contemporary sociological theory

(pp. 50-63). Los Angeles, CA: Pine Forge Press. (Original work

published 1848)

Marx, K. (2011). Economic and philosophic manuscripts of 1844.

In S. Appelrouth & L. D. Edles, Classical and contemporary

sociological theory (pp. 41-50). Los Angeles, CA: Pine Forge

Press. (Original work published 1844)

Walmart Stores, Inc. data sheet: Worldwide unit details. (2011,

April). Walmart corporate. Retrieved from http://walmartstores

.com/pressroom/news/10594.aspx

List of references begins on a new page. The first line of each entry is at the left margin; subsequent lines indent ½". Double- spacing is used throughout.

List is alphabetized by authors’ last names or by titles for works with no authors. All authors’ names are inverted.

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For an older work contained in a more recent work, the date of original publication is given in parentheses at the end of the entry.

The abbreviation "n.d." is used for a source with no date of publication or update.