The problem is the same almost every year. Whether it is Teletubbies, Buzz Lightyear or Teenage Mutant Ninja Turtles, the free market seems congenitally incapable of anticipating the level of demand for the toy which becomes the ne plus ultra of every child's Christmas stocking.
Such a state of affairs is most unsatisfactory. Market short-termism is spoiling Christmas for many of our poorest and most excluded citizens. Investment in the toy industry, as in so many other British industries, has been far too low for far too long.
Training and education are, of course, essential to enhancing the skills and flexible employability of potential workers in the industry. Such measures will also ease the path into employment of single mothers and the disabled.
But the truth is that production bottle-necks will take time to resolve. In the meantime, we will require specially qualified counsellors to teach all primary school children how to curb the volatility of their demands-a programme which will embrace nursery schools as and when funds permit.
Attitudes left over from the discredited "old" Britain, such as the failure to anticipate trends, must go. These problems must be seen holistically rather than piecemeal. Reform of the House of Lords and of the voting system itself are an integral part of the change of mindset required to combat the Christmas toy shortage.
As a short-term measure, I recommend that hit squads from the department of trade and industry should take over the management of failing toy factories. For the longer term an urgent review must be undertaken of measures which will prevent shortages arising in future. I recommend the establishment of a task force...
Well... in new, young Britain people do say things a little like that, do they not? But the truth is, alas, at odds with social democratic hubris.
Uncertainty is inherent in industries in which fashion plays an important part. The film industry is an obvious example. Even the presence of big stars and huge advertising budgets is no guarantee of success. If the first wave of audiences does not like a big release, the information will spread rapidly, and the studio will be left with a flop. Similarly, low budget movies like The Full Monty can become hits.
Fashion markets such as those for films or for Christmas toys raise serious problems for conventional, economic theory. In the orthodox theory of consumer behaviour, the tastes of individuals are given; and the market acts to communicate them to producers, so that appropriate quantities of the relevant product can be supplied.
But when a new release or product is issued by the film or Christmas toy industries it is not subject to given tastes. Consumers do not know in advance whether they will like it or loathe it. In the case of toys, this produces a problem for buyers from the retail chains who are trying to second-guess preferences which are not yet formed.
Further, one consumer's attitude depends critically on another's-your child wants teletubbies this year because every other child wants them too. As soon as such preferences do begin to emerge, they can compound with great speed and leave producers lagging behind.
In these industries the classical economic theory of equilibrium, in which price acts to balance supply and demand in every market, is simply not relevant. Understanding these markets requires a different type of mathematical analysis from the one encountered in standard economic theory. In technical terms, the evolution of patterns of demand in fashion-related markets is best described by theorems of non-linear probability, and processes which are stochastic rather than deterministic.
In other words: Christmas toy crises-like death and taxation-are part of the human condition.
