The first rule of good governance is to acknowledge that your society has limited resources. The second rule of good governance is to establish and maintain a system that disperses those resources in an efficient and effective manner that aids in your society's goals.
I honestly do not think that Fraggle Rock was a secret project in order to create a generation of Communism-loving comrades. If so, the effort has failed as spectacularly as the tabletop Dungeons & Dragons was supposed to turn everyone into atheist communist pagan baby-killers and that listening to Heavy Metal music songs backwards was supposed to initiate a mass suicide wave of teenagers.
In the end, Occam's Razor holds true in that the simplest answer is often the correct one - As a screenwriter, you want your viewer concentrating on the story, not the details. Six-year olds aren't interested in the finer points of monetary policy, urban development or waste management theory, but rather if Gobo hides from the Gorgs or if Boober learns the lesson of trust by listening to the Golden Radish statue.
And, therefore, you gloss over how the Fraggle Rock community operates on a macro level unless there is a punchline involved or it pertains to the story in general.
The Fraggles have enough resources to house their citizens, feed them and care for both their personal and medical safety with enough left over for amusement. How they manage their resources is left up to the viewer's imagination and the viewer.