Thomas S.

Whether you’re a fan or not, it’s hard to ignore the effect Star Wars has had on culture in the past four decades. The brand is so strong that even those that have not seen any of the films know Darth Vader and Luke Skywalker while famous, classic quotes such as “Luke, I am your father” and “May the Force be with you” have been used so extensively that they have eventually become clichés. However, if you delve deeper into the universe, you discover a world full of countless books, comic books, cartoon series, video games and fan fiction that still keep Star Wars very much alive. The mania is especially vivid at the moment as less than a week from now, after more than 10 years, yet another film in the saga will hit the cinemas around the globe. The release of Star Wars VII: The Force Awakens has even the most unimpressed excited and the film is expected to break all the current box office records. This anticipation before the long-awaited premiere has inspired me to write an article about Star Wars. An article from a perspective that, even in such a rich and extensively described universe, is difficult to find. That perspective is economics.

 

As mentioned before, there is a great number of sources from which a fan of Star Wars can gain knowledge of the universe. Still, economy is not a popular aspect for the analysis of the saga, at least not as popular as others. As a long-time Star Wars fan and economics student at the same time, I decided that something should finally be done about that. However, before I get to that, two things need to be explained. Firstly, it is impossible to include all or even the majority of available information. Hence, I have chosen those that I found the most interesting and crucial for economic analysis. Secondly, there are countless information and data about the universe that can be found in the internet and beyond. However, some of them are more reliable than the others. Therefore, I tried to focus mostly on the ones that can be found in the films and series themselves, followed by some more (or less) serious research and other sources used to the smallest extent possible. I hope that by doing this I managed to present the topic in a manner that resembles the reality (if one may say so) the most.

 

General information

I shall start with outlining few general information that will allow us to understand the size of the Star Wars universe. The Star Wars universe is placed in the Galaxy which had 100,000 light years in diameter, that is, with the speed of light, it would take you 100,000 years to travel from its one end to the other. For comparison, the Sun is located about 8 minutes and 19 light second or about 93 million kilometres away from Earth. The Galaxy was comprised of hundreds of billions of stars, many of them with orbiting bodies such as planets. Millions of these planets could and did sustain life, including many sentient species. Known space (as the Galaxy hadn’t been fully explored) had around 100 quadrillion (100*10^15) inhabitants living on about 50 million different worlds. Knowing this, we can continue to the analysis on a truly astronomically macro scale.

 

Politics

In the Star Wars saga, there are two main periods and in both there is a galaxy-wide political body that governs quadrillions of citizens. In the prequel trilogy (parts I, II and III), the biggest political organisation is the Galactic Republic, a democratic union of star systems. It is worth noting that although the Republic itself was democratic, millions of its star systems had their own political systems ranging from democracies to dictatorships. The governing body was the Senate, in which Senators represented their planets. Due to the enormous size of the organisation, the Senate would mostly decide on general direction in areas such as defence, interplanetary conflicts and galactic trade while individual planets and systems retained wide autonomies in many other issues. In the original trilogy (parts IV, V and VI), the galaxy was governed by the Galactic Empire. The Galactic Empire was a totalitarian state, which has incorporated systems previously falling under the auspices of the Galactic Republic and has expanded even further. The Emperor was the Empire’s leader and through his centralised government he had the total control over the Galaxy’s population which, deprived of any liberties, had to work to fulfil the Emperor’s goals. Any resistance against the Empire was met with merciless retaliation.

 

Economy as a Whole

Although you may think that estimating the Galaxy’s economy would be impossible, such thinking did not stop professor Zachary Feinstein from writing a paper in which he estimated the Gross Galactic Product (GGP). According to him, the total size of the galactic economy during the 20 years of the Galactic Empire’s reign was about $92 sextillion (92*10^21)! This estimation was based on several key assumptions (I discuss them further in the section of this article devoted to the costs of a Death Star). However, this number allows us to gain at least some idea of the magnitude of an economy that spans a whole galaxy.

 

Economic Freedom

Not surprisingly, the amount of economic freedom in the Galaxy depended on the political situation. Under the Galactic Republic, there was a reasonable amount of liberty with the galactic trade being strongly promoted by the Senate. Generally liberal policies of the Republic allowed business to flourish and there existed many ultra-sized corporations that generated enormous profits (later I discuss corporations in more detail). Conversely, during the period of the Galactic Empire, business had to support or at the very least not stand in the way of the Emperor’s goals. Many corporations were nationalised and forced to work for the Empire’s grand projects, majority of which increased its military might. For the Empire, business was merely a tool to execute the total control over the Galaxy. An example of that can be found in part V when Darth Vader (Emperor’s right hand) threatens to take control over Cloud City, a city-sized gas-mining facility on planet Bespin, if they do not cooperate.

 

Currency and Banking

The main currency in the Galaxy was the Galactic Credit. Credits were widely accepted throughout the Galaxy and took shape of both coins and bills as well Credit chips, somewhat similar to our debit cards. Predictably, during times of turmoil such as galaxy-wide wars, galactic population preferred to keep their currency in its physical form, that is coins and bills, rather than electronic Credit chips due to increased uncertainty. Interestingly, the Galactic Credit was credited by the InterGalactic Banking Clan (IGBC), a union of the Galaxy’s most powerful banking and financial institutions. Although at times partially or fully nationalised, IGBC remained mostly independent. Moreover, during wars it would remain (at least officially) neutral and cooperate with all of the conflicts’ sides. Therefore, the Galaxy’s currency, banking and financial systems were mostly held in private hands of this enormous corporation. Although different political bodies could try to pass laws and thus exert influence on IGBC, their financial support was crucial if one wanted to receive funds necessary to govern.

 

Corporations

The galactic economy’s enormous size allowed the ultra-sized corporations to arise and flourish. Together with the InterGalactic Banking Clan, the most famous one was the Trade Federation, a shipping and trade conglomerate that aimed at achieving the control of the Galaxy’s trade routes. The amount of market power they held allowed them to become monopolists in many industries and the sheer size of their operations allowed them to have representatives in the Galactic Senate. What is more, those corporations often had their own considerable military forces. With such power, those corporations were able to bribe politicians and directly influence policies. Perhaps the best example of their capabilities can be seen in part I of the saga, where the Trade Federation, in response to the Republic’s new trade route taxation, begins a full blockade of the planet Naboo and later invades it. Imagine that the European Commission introduces new taxes and, as a sign of protest, an unhappy corporation decides to begin a blockade and later an invasion of one of the EU member states. Sounds like an anti-globalist’s worst nightmare, doesn’t it?

 

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R2-D2 Photo Source: Darryl Moran

Technology

Technology in Star Wars is, not surprisingly, much more advanced than Earth’s in every aspect. There are, however, two inventions that must have had a truly revolutionary effect on the economy: hyperdrive and robots. Hyperdrive was a technology that allowed spaceships to traverse vast distances of the Galaxy in a matter of hours or days by reaching speed many times higher than that of light. This not only made travel and communication extremely convenient but also allowed for a rapid expansion of intergalactic trade. Without it, space travel would take years or even centuries (and possibly even more). Just imagine the price of a commodity that took hundreds of years to reach your planet. The other invention – robots – is becoming a very hot topic on Earth both because of amazing opportunities they could provide for humankind and because of possible threats such as surge in unemployment and dangers of artificial intelligence. In Star Wars, however, robots did not shake the labour market and were an addition to it rather than an alternative. Additionally, although droids were used extensively in military conflicts, there seemed to be no threat that robots would decide themselves to conquer other races. Rather, they fulfilled a range of functions such as protocol droids (famous C-3PO is an example) or astrodroids (such as R2-D2). In general, robots in Star Wars resembled a separate species and their involvement proved vital during the most crucial events of that saga – R2-D2 saved the Galaxy and his friends more times than any other character.

 

Diversity – an Opportunity or a Challenge?

Millions of galactic races differed in many respects such as their biology and culture. The former was the result of different planetary environments – from Earth-like lush worlds, through inhospitable desert or ice-cold planets, to almost uninhabitable molten, volcano worlds. So many different conditions resulted in evolution of species that were distinct from humans in every biological aspect. On top of that, with every species’ and planet’s language, customs, social structure, art and religion, it would be impossible to learn even a fraction of the Galaxy’s cultural pool. From the economic and business perspective, such diversity would be a serious challenge. Just imagine the costs connected to operating on so many different worlds and communicating with so many different cultures. On the other hand, this would provide nearly limitless opportunities for those interested in career in public relations and, therefore, for those the Galaxy might seem like a paradise. On top of that, with so many different environments, resources and needs, business opportunities of any kind would be limitless as well.

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Death Star Space Station (on the left) Photo Source: Serious Cat

Military Spending and its effects on the Economy

As mentioned before, during the Galactic Empire’s reign, there was a big focus on expanding the military. By far, the most ambitious and at the same time most expensive project was the creation of Death Stars, enormous space stations capable of destroying whole planets in one shot. Such project required extensive research and development as well as construction costs. In the saga, a total of two Death Stars has been constructed and, according to the US Government, the estimated costs of a Death Star’s construction alone would be $852 quadrillion (about 11,000 times the size of Earth’s economy). However, according to professor Feinstein’s paper, if we count in the costs of research and development, both Death Stars together cost staggering $419 quintillion (419*10^18)!

 

Galactic Economic Crises

At the end of part VI of the saga, the second Death Star is destroyed and the Emperor is killed in the process. Resulting dissolution of the centralised government and the heavy blow to the financial markets that, by buying government bonds, would have likely invested heavily in the Death Star project could result in a serious economic crisis. According to professor Feinstein’s paper, a bailout of 15% – 20% of GGP would be necessary to stabilise the galactic economy on the verge of a total collapse. Otherwise, the Galaxy would enter a period of recession that is beyond the imagination of the most pessimistic of Earth’s economists.

 

To summarise, there are several differences between the Earth’s and the galactic economy. The main difference is the size – our blue planet’s total economy is less than a fraction of the GGP and comparison looks similar if we look at populations, areas of operation, the scale of corporations etc. Additionally, the Galaxy’s economy, due to its size and diversity, provides many, many more opportunities and challenges at the same time. On top of that, corporations seem to have much more power and influence in the Galaxy than on Earth. Nonetheless, there are very strong similarities between the two as well: economic landscape is very much dependent on contemporary politics, the same economic laws we study in our textbooks apply in the galactic economy and no matter the situation, entrepreneurial spirit endures. Now, I am fully aware that the theories presented in the article might be contested on their scientific reliability and some might call them far-fetched. However, I find application of economic theories to such unusual settings an educative or at the very least fun experience. And who knows – maybe in not too long we will be discussing GGP instead of GDP in our classes as well…