The Economics Of Santa Claus

The Economics Of Santa Claus Authored by Vincent Cook via The Mises Institute, When I was a junior at a high school in the suburbs of Los Angeles in late 1978, rather uncharacteristically, I took a big risk. The teacher of my American Government class, Mr. Knapp, gave us an assignment to write a serious paper about government economic policy. Instead of doing that, I decided to submit a paper with a satirical theme, estimating what it would cost to become Santa Claus. Not only was I not following instructions, I had no idea how Mr. Knapp would react to my brand of humor. As you read the transcription of my paper below, bear in mind that I wrote it a few years before I learned anything about libertarianism or about Austrian economics. Still, I was under the influence of the libertarian zeitgeist prevailing in California at the time. With inflation raging out of control while traditional statist authority figures in both major parties were lamely touting yet more business-as-usual interventions and tax increases, Californians had had enough by then. In November of 1978, they revolted against property taxes (led by the legendary anti-tax gadfly Howard Jarvis , passing the Proposition 13 voter initiative to amend the state constitution) and even gave a libertarian candidate for governor 5.5 percent of the vote. Reading this work of mine, I’m sure you’ll agree that there was a definite proto-Austro-libertarian influence at work. Keep in mind too that the purchasing power of the dollar in 1978 was at least a factor of ten times greater than it is today, and, of course, the American population has increased a great deal too, so you might find my cost estimates absurdly low. They weren’t low at the time, however. Also be mindful that there was neither an internet nor privacy-unfriendly smart phone service, and personal computers had only just been introduced into the marketplace (in fact, my part-time retail job responsibilities at Radio Shack the previous summer included sales of the primitive TRS-80 computer ), so you’ll have to pardon the technological backwardness of my cost analysis in the information category-that part of Santa’s job could probably be done much more cheaply these days. I have added screenshots of my paper showing a couple of Mr. Knapp’s comments. Figure 1: Important Question Posed by Mr. Knapp Source: Vincent Cook Figure 2: Mr. Knapp’s Overall Comment I’m taking another big risk to spring my youthful joke on you nearly five decades later, hoping that you’ll enjoy it as much as Mr. Knapp did back then-Merry Christmas! Economics of Santa Claus How often have you heard that there is no Santa Claus? If you check your history books, there was a real St. Nicholas who gave gifts to children, and he was given the Santa Claus title. Suppose someone wanted to claim this title now. How much would it cost? (I will restrict this Santa to the United States.) To examine this profound question, I will break...

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