Santa and the Economic Institutions of the North Pole

In the modern social image of Santa Claus it is widely assumed that Santa is the boss and directs the production of toys at the North Pole.  Movies typically portray Santa as a kind of CEO of Christmas, Inc. Santa determines production needs and quotas and the elves all work for him producing the toys he orders.  But is that really so?  Or is this our own projection of our society’s economic institutions based on hierarchy, scarcity, and consumption upon the Christmas enterprise?

Let me propose an alternative.  Perhaps Santa isn’t really the boss at the North Pole.  And the North Pole isn’t organized as some hierarchical factory.  What if the elves are independent producers who are incredibly productive all year long because they are so happy and they gain joy from producing, not just consuming? Suppose these highly productive elves have discovered the secrets of increasing returns-to-scale production. If that’s so, then there’s always going to be a huge surplus production of toys at the North Pole – more toys than they can either consume or store themselves.  So what to do?

Perhaps the elves, as independent producers and citizens, have together voted and elected someone to whom they delegate the responsibility for distributing the surplus? That someone could be Santa. And Santa, in order to reduce the giant surplus of toys has taken to distributing them for free throughout the world tonight for all kids, even if they aren’t from the elf community.

Santa works for the elves.  I like it.

One thought on “Santa and the Economic Institutions of the North Pole

  1. Maybe Santa’s sleigh is a helicopter?…Does the North Pole have a Federal Reserve Chairman to dictate Interest Rates and set Quantitative Easing policies?
    ..sorry for getting too political (and cynical). It’s a good blog entry… if only it were true that people worked for the joy of producing.

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