The Noddy books of Enid Blyton are seriously underrated. They give an insight into the present social climate that shows not only great prescience and foresight, but might be judged to have been formative. The series began with Noddy Goes to Toyland (1949) and continued for 10 years, at a rate of almost two a year, and the books were very popular. They retained the same illustrator - Beck - and their hold on the imagination of the young.

The books have been dismissed for politically incorrect attitudes, but this is superficial. There are Golliwogs, it is true, but there are some who, like Sid Golly in Be Brave Little Noddy, are comparatively charming compared to Mr Honk who is “black as thunder” and who is the villain of the piece. Mr Golly is the owner of Toyland Transport, and mends Noddy’s cars. Besides, the Golliwogs live in Golliwog town, and it is only there that they are “seen everywhere”.

At a far deeper level, Enid Blyton reveals her insight into the world of real market forces. There are those who cite various economists and philosophers for the energy given to post-modernist capitalism, but no-one should misunderstand the important effect of the Noddy books in the creation of the modern state.

The basic principles of capitalism lie at the heart of the books. Market forces abound. Big Ears, Noddy’s “very, very good friend”, makes a decent percentage out of his investments. He lends a bicycle to Noddy for half the profits when Noddy’s usual means for making money, his car, has been in an accident . There are profits to be made, but the young readers are also reminded that there is also a risk of making bad investments. When Noddy decides: “I want to earn some money to build a little garage”, he finds his enterprise going wrong. “Instead of earning money, he owed the toy cat six pence for a new tail”. His debts mount up. Fortunately, his financial adviser, Big Ears, comes up with a rescue package. The official warning that investments can lose money as well as gain profits is clearly made. Nevertheless, market forces drive Noddy on.

At the heart of the message lies the principle of sturdy independence. One sign of this is the importance of home ownership. Each of the toys strives to have their own home, and Noddy’s first ambition is to build his own house, however humble. Later he can move beyond the first-time buyer, like building his garage, for we are aware that the properties on the market vary greatly: “Mr Tubby’s house was rather grand”.

In order to achieve this kind of success, Noddy needs to form a clear business plan. The message is clear: “Face up to trouble and it will run away, but if you run away, trouble will come after you”. This introduces an action plan by Big Ears, with capital borrowed at clear rates of interest and a profit and loss account.

It is seen as important that there should be a free-market economy. To this end, Toy Town has a monopolies commission to prevent unfair trading and it cites a Trade Descriptions act. At the same time, the authorities need to regulate what goes on. When Noddy first arrives in Toy Village, he meets the immigration services. The question is whether he fits. “Are you a toy?” said the policeman, in a booming voice. “only toys are allowed to stay in Toy Village”. Fortunately, Noddy has not only made acquaintance with Big Ears, but has proved himself to be a useful citizen, so at the court hearing he is allowed to stay.

There is also the principle of performance-related pay: “Noddy, here is your pay. And I’ve paid Tubby too, though not as much as you”.

In Toyland there is no such thing as society; just individuals who have neighbourly quarrels as well as friendships.

The real hero is, however, Big Ears, who thinks up capital enterprises and business plans. When Mr Honk proves too powerful a competitor for Noddy’s taxi business, it is Big Ears who finds the solution. He steals the key to Mr Honk’s clockwork car. Well done, Big Ears!

Cedric Cullingford is professor of primary education at Huddersfield University.