The Economics in Roald Dahl’s Charlie and the Chocolate Factory

by The Literat

Introduction

A childhood classic, Roald Dahl’s critically-acclaimed novel Charlie and the Chocolate Factory is a familiar story to many of us. Its popularity is evident even in its adaptations into video games, musicals, plays and movies. However, within the chocolate-filled world of Willy Wonka, it is interesting to note the slight nods to Economics within the plot. In our bid to present Economics in a more appealing and simpler digestible way, this report thus seeks to examine the Economics in Roald Dahl’s Charlie and the Chocolate Factory, proving the ubiquity of Economics in the literature we ingest and by extension, our lives. Even in the fictional world of Willy Wonka, the omnipresence of economics guiding the rational decisions of economic agents is ostensible. Our economic analysis of the novel seeks to add on to the literary depictions of economic agents in the novel and ultimately help to create a greater understanding of the practical usage of Economics to all through using a fictional tale which many are acquainted with. Instead of carrying out this economic analysis through different and separate economic agents such as Wonka’s Chocolate Factory and Charlie himself, we will be deconstructing the novel in terms of different scenes that give rise to key economic concepts.

The Scarcity of the Golden Ticket

The opening of the movie starts off with the context of WIlly Wonka’s golden ticket fiasco. The availability of only five tickets for the whole world and the lack of resources that Charlie’s family had that puts Charlie at a starting disadvantage compared to the other kids is a clear portrayal of how the economic concept of scarcity affects the functioning of the society and the world at large. After all, the entire study of economics is fabricated on one simple concept – scarcity. Human wants are unlimited; the resources, however, are limited. See how Willy Wonka chose to merely have five golden tickets despite the umpteen number of chocolate bars being manufactured and sold. In the same way, observe the countless number of people who wish to get their hands on the few golden tickets. We see the idea of scarcity through the lens of the producer and consumers, which in the case of Charlie and the Chocolate Factory, are Willy Wonka and the people who desire the exclusive opportunity of entering the factory. While there was an unlimited demand for the tickets, the only limited supply of them thus leads to scarcity.

The limited number of the golden tickets benefited Willy Wonka, the producer, in more ways than one. By making chocolate bars come with a chance of an unimaginable tour around the chocolate factory and a lifetime supply of their eatables, consumers are inclined to purchase more chocolate bars to win the golden ticket. Hence, scarcity has increased consumers’ demand for the chocolate bars. Looking beyond the number of golden tickets, scarcity was also seen in the form of limited means of survival as witnessed by Charlie’s family, where they only had a very low amount of income to sustain an entire family of seven’s unlimited wants of household supplies, groceries and other items..

To put it in simple terms, scarcity involves limited resources, boundless human wants that cannot all be satisfied and alternative uses of these resources.

Charlie’s Opportunity Cost

Owing to the aforementioned problem of scarcity, there is a fluid link to the concept of opportunity cost. It is seen in the novel that Charlie’s father has recently lost his job, leaving the family all but destitute. Given the impoverished state of his family, chocolate bars in Charlie’s sense would be seen as a ‘luxury’ – something he cannot so freely purchase given the low household income his father rakes in and how one bar of chocolate takes up a larger proportion of their income as compared to other more affluent families. It is at this juncture that the concept of ‘opportunity cost’ is evidently seen.  In simple terms, opportunity cost is the loss of the benefit that could have been enjoyed if the best alternative choice was chosen instead. In Charlie’s case, his decision to use what little money he found on the pavement on a bar of chocolate would lead him to incur a great opportunity cost. In other words, he could have spent that money on items that are of ‘necessity’ such as household items like groceries that are far greater in nutrients and energy (vegetables, bread, fruits) instead of an item of ‘luxury’ like mere chocolate bars. 

Digging deeper and relating this notion to real life context, this also displays the income disparity and equity issues timely to our world today. We see children like Violet Beauregarde, who belong to the upper class income group, able to splurge on thousands of chocolate bars and thereby increasing her chances of getting a golden ticket, while Charlie merely played on his luck as he was only able to buy a mere one bar of chocolate. 

Demand and Supply of Chocolate Bars and Related Goods

In the world of Willy Wonka, many people gambled their chances of winning a visit to the factory by purchasing bars of chocolate. Veruca Salt was one of these people. Her wealthy father bought hundreds of thousands of chocolate bars in order to find one golden ticket. This therefore stimulated greater demand for Willy Wonka’s chocolates as people like Salt’s father  bought more and more chocolate bars to increase their chances of winning the golden ticket. To match this demand, supply on Willy Wonka’s end has to be ramped up. To increase production, there must first be an increase in what we call ‘factors of productions’. There are of course many different factors of production, but more potently in the movie we see the factor of ‘labor’ come into play. In the film, Willy Wonka had a large number of Oompa Loompas who served as labour in his factory that could increase the efficiency and ramp up his production of chocolate bars. With this, he was able to easily increase the amount of chocolate bars produced to match the increased demand. However, to employ all of these Oompa Loompas, they, like real-life workers, had to be paid ‘wages’ too, and theirs was in the form of cocoa beans. The increase in Oompa Loompas in production meant that the cost of production (the amount of cocoa beans Willy Wonka had to give to them) also had to increase. This higher cost of production is thus reflected in an increase in the price of chocolate bars, which was passed on to its buyers. Thus, we see that the overall impact on the market would not only be a higher quantity purchased, but also a higher price for the chocolate bars.

The market for chocolate bars is not the only one affected, as is all markets in the real world – they remain interconnected.  It is through this that we once again bring in the concept of ‘related goods’. As explained in the movie adaptation, “the upswing in candy sales had led to a rise in cavities which led to a rise in toothpaste sales”. In this, we can treat toothpaste as a ‘complementary good’ to chocolate bars since the consumption of the latter good will give reason for the use of the former. We can see here that an increase in demand for Willy Wonka’s chocolate bars led to a similar rise in derived demand for toothpaste. Other markets which could qualify as complementary goods that will face a similar impact are the markets for toothbrushes and dental services.

Willy Wonka’s Chocolate Factory – A Monopoly

Even with the fantastical Chocolate River and the Oompa-Loompas of the Chocolate Factory fiction verse, the business model in which Willy Wonka runs his firm continues to be greatly relevant to our study of Economics! Firms generally refer to any company that seeks to make a profit by manufacturing or selling products or services – or both – to consumers. In addition, they also share a relationship with the government where the government could either support or regulate such businesses through policies. Most of us would know that firms primarily seek to maximise profits, but how does Willy Wonka embark on this mission? 

To understand the business economics of the story first requires one to understand the market structure of the Chocolate industry Wonka operates within. Wonka was visibly a trailblazer in the sweet industry where he was the sole producer of sweets such as Everlasting Gobstoppers and Golden Chocolate Eggs laid by geese. With Wonka being the sole person with the knowledge of the secrets behind such novel and highly-desired products, the candy market has extremely high barriers to entry. In simple terms, barriers to entry are the cost and hindrances that make it difficult for new companies to enter a given market. Other firms, being unable to replicate Wonka’s products, are unable to enter such a market and leaves the Chocolate Factory to be a monopoly since it is the sole dominant firm within the industry. While such monopolies are difficult to find in real life, Wonka’s firms parallels other real-life firms such as Singapore Power (SP) – a monopoly over power generation in Singapore. As the sole power grid in the country, SP enjoys the same extremely high barriers to entry as Wonka due to the high costs of the industry and legal regulations.

Now that we have established the Chocolate Factory as a monopoly within the exotic candy market, what are some impacts of this market structure upon consumers and society? For one, the Chocolate Factory would abuse their monopoly power by imposing high prices given that they are the sole producer of their candies and there is missing competition. As a result of such high prices, usually above the marginal costs, there is also a decline in consumer surplus, an economic measurement of consumer’s ‘benefits’. The bigger the difference between the price that consumers pay and the price that they are willing to pay, the higher the consumer surplus. In this situation, as consumers are spending more on these more expensive candies,  their consumer surplus is greatly lessened.       Another impact of the Chocolate Factory being a monopoly would be x-inefficiency. This phenomenon often occurs when a firm lacks the incentive to actively reduce costs. This causes the average cost of production to be higher than necessary. To better illustrate this, Wonka’s factory is shown in the movie to be beautifully adorned with the likes of rivers and trees – that definitely costs a lot of money right? This money used to artificially adorn the factory would have been better used in other markets with more competition to embark on other business ventures like research and production.

Conclusion

While being fictional and undeniably delicious, Wonka’s Chocolate Factory is still grounded in many economic concepts that apply to firms of today. Take a look around you and see what other firms and markets perhaps fit into the concepts that were presented within the Chocolate Factory business!Truly, the study of Economics remains very relevant to our lives, and in this report, we see its presence in notable pieces of literature. It is with this that we posit that due to its increasing application to our everyday lives, the study of Economics should be approached fearlessly. This report is a testament that Economics as a subject can be fun and enjoyable, if we take the time to see it beyond just a subject.  

Bong Dick, Joel Koh, Marasigan Noleen Joy Bonita and Sandy Tan (20-E1)

References

Corbin, C. (2012). Deconstructing Willy Wonka’s Chocolate Factory: Race, Labor, and the Changing Depictions of the Oompa-Loompas. http://ourenvironment.berkeley.edu/wp-content/uploads/2012/07/UCB_McNair_Journal_2012_wc.pdf.

Economic Values as Seen in Charlie And The Chocolate Factory essays. (n.d.). https://www.megaessays.com/viewpaper/204237.html. 

Ecotalker. (2015, October 14). The moral of Charlie and the chocolate factory is: Economics! Arthashastra. https://ecotalker.wordpress.com/2015/10/14/the-moral-of-charlie-and-the-chocolate-factory-is-economics/.

NewsOrb360-Admin, & No-Admin. (2020, October 3). Economic View of Charlie and the Chocolate Factory – InfoTainment. NEWSORB360. https://newsorb360.com/economic-view-of-charlie-and-the-chocolate-factory/.

Vohra, S. (2020, July 27.). The Economics Behind the Charlie and the Chocolate Factory. Your Sites RSS. https://tidingsmedia.org/blog/the-economics-behind-the-charlie-and-the-chocolate-factory.