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Some scholars have theorized that the images and characters used by Baum and Denslow closely resembled political images that were well known in the 1890s, specifically the debate of the day regarding monetary policy: the "Yellow Brick Road" represents the gold standard, the silver slippers (which were ruby slippers in the film version) represent the sixteen to one silver ratio (dancing down the road). Many other characters and story lines represent identifiable people or circumstances of the day. The wicked witches of the east and west represented the local banks and the railroad industry, respectively, both of which drove small farmers out of business. The scarecrow represents the farmers of the Populist party, who managed to get out of debt by making more silver coinage. The return to bimetallism would increase inflation, thus lowering the real value of their debts. The Tin Woodman represents the factory workers of the industrialized North, whom the Populists saw as being so hard-pressed to work grueling hours for little money that the workers had lost their human hearts and become mechanized themselves. (See Second Industrial Revolution) Toto was thought to be short for teetotaler, another word for a prohibitionist; it should be noted that William Jennings Bryan, the fiery popular candidate (possibly the Lion character) from the Populist Party, was a teetotaler himself. Bryan also fits the allegorical reference to the Cowardly Lion in that he retreated from his support of free silver after economic conditions improved in the late 1890s. However, it has also been suggested the cowardly Lion represented Wall Street investors, given the economic climate of the time. The Munchkins represented the common people (serfdom), while the emerald city represented Washington and its green-paper money delusion. The Wizard, a charlatan who tricks people into believing he wields immense power, would represent the President. The kiss from the Good Witch of the North is the electoral mandate; Dorothy must destroy the Wicked Witch of the West-the old West Coast "establishment" (money) with water (the US was suffering from drought). Moreover, "Oz" is the abbreviation for the measuring of these precious metals: ounces.

Some biographers and scholars of Baum disagree, pointing to details of Baum's biography, his own statements and writing about the purpose of his book, the ease with which hidden meanings can be found in works not intended to contain any, and the question of why contemporary press did not discuss these perceived metaphors which logically should have been much more obvious at that time. The consensus is that the books are written mainly for the pleasure of Baum's younger readers, to give them a sense of possibility and imagination.

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