People often ask me, "Curtis, WTF is Rudolph the Red-nosed Reindeer about? By "often", I mean enough people for me remark upon the inconvenience of educating friends and strangers because their schools failed them. I think it best that I write down the allegorical points.
Rudolph represents the spirit of communism, as signified by his red-nose. Rudolph's father Donner hides this because he does not want to upset the social order. Donner is a member of the bourgeois and fears he will be fair worse in any change to society.
The names "Rudolph" and "Donner" are our first clue that this story is not in the vein of 'Twas the Night Before Christmas. "Donner" is not "Donder" (meaning "thunder") from the poem, but instead a reference to the Donner Party that resorted to cannibalism due to their poor judgment. "Rudolph" means "glorious wolf". He is a social predator that will bring about the glorious revolution.
Mrs Clause, referred to as "Mother" in the story is Mother Russia. She is concerned for the health of the thin and frail Mr Clause, Saint Nicholas. He is Tsar Nicholas II as distinguished by his name, appearance, and his role as leader of Christmastown. In the early scenes we see that he is a good person, but curmudgeonly and nervous about events beyond his control. It is only at the end of the story when he is fat with life and dons the red coat of communism can he lead Christmas.
Christmas is also an allusion to Communism. The story emphasises gift giving as redistribution of wealth. Santa, the reindeer, and elves are preparing for Christmas, the coming revolution, but they cannot succeed because they lack the understanding of how they can benefit from change. This is best exemplified by the elf foreman who perpetuates the system that he gains little benefit from. He has less vested interest that the reindeer, but none-the-less punishes Hermey for rejecting the role he was born too. The elves are the serfs who produce, but do not benefit from their labour.
Hermey is a young Leon Trotsky. Hermey's desire to be a dentist represents Trotsky's desire to heal society, and with regular checkups advise the people to take a prosperous path. Hermey's extraction of the foreman's rotten tooth demonstrates his desire to remove the problems of society without hurting the people. Hermey runs away from Christmastown just as Trotsky was exiled from Russia. He is accompanied by Rudolph, the spirit of communism.
Rudolph and Hermey meet Yukon Cornelius who represents pointless capitalism. Yukon Cornelius is not a bad person, but his pursuit of silver and gold has separated him from society. He cannot find enough wealth to be contented. He has few goods because he does not contribute to society by working. He is so blinded by the promise of wealth, that he does not realize he is chasing a dream even when invited to join the new society at the end of the story.
Yukon Cornelius' pick axe represents the weapon used to murder Trotsky in Mexico. This is the terrible fate that Hermey can only avoid by bringing about the revolution.
The Island of Misfit Toys represents the dispossessed workers of the world who need a place in society. They are led by a winged lion name King Moonracer. His name means he is the opposite of the Sun King Louis XIV of France who was an absolute monarch. He is the sprit of Karl Marx, dead, but continues to protect the workers during their wait for the revolution. Moonracer does not allow Rudolph and Hermey to stay on the island because communism cannot thrive as a single state. A single state is a perceived threat to the states governed by aristocracy. Moonracer wants Rudolph and Hermey to bring revolution to the world, so he sends them to Christmastown to ask Santa to take up the cause of the misfit toys.
The Abominable Snowman represents the white army that fought for Tsarist and Orthodox interests against the Communists. The reindeer and elves fear the Abominable just as the bourgeois and worker feared the white army. Just as Trotsky defeated the white army, Hermey lures the Abominable into a trap and pulls all his teeth. The Abominable, now called the Bumble is reformed and joins the new society.
Rudolph's return and acceptance by society represents the acceptance of communism. Hermey takes a role as dentist to heal the people and advise them though regular checkups. Santa promises to find homes for the misfit toys, to find a place for every worker in society. He dons his red coat, and with Rudolph to guide the sleigh, he will bring prosperity to all.