'Star Wars' economics: Researcher analyzes the Empire

Zachary Feinstein, left, shakes hands with a student after his presentation on the economy of "Star Wars" last week during the Hancock Symposium.
Zachary Feinstein, left, shakes hands with a student after his presentation on the economy of "Star Wars" last week during the Hancock Symposium.

In a galaxy far, far away, a pesky group of rebels took down an empire - and an entire galactic economy, according to an economist who appreciates the ideals of the movie franchise "Star Wars."

Zachary Feinstein, a professor at Washington University in St. Louis, spoke at the Hancock Symposium last week about two of his favorite subjects, which he combined in a research paper last December.

"If I write a paper about 'Star Wars,' people will talk," he said. "It's a way of getting new academic research in the world."

That paper, Feinstein added, blew up the internet. Using economic trends from the American economy and systemic risk analysis, he said he was able to assess the economy in the fictional Star Wars world.

"This is not just a joke; there is real academic research in this," he said. "We're going to focus on the original trilogy. The research was done and published two weeks before episode seven came out."

In "Star Wars," a band of rebels rises up to fight the Empire, a totalitarian government controlling the entire galaxy. The leader of the Empire, Emperor Palpatine, managed to overthrow any form of democracy and was quite industrious in building weapons of mass destruction, Feinstein said.

"Emperor Palpatine really knew how to make a strategy," he said. "He also built two fully operational Moon-sized battle stations."

Feinstein said because of a petition White House officials received, he was able to estimate the costs of each of those battle stations, or Death Stars.

"We figure it has a density similar to an aircraft carrier," he said. "In 2012, there was a petition to the White House to build a Death Star. It got enough signatures to force the government to respond."

Feinstein said government officials estimated the potential cost of a Death Star using the cost of materials used to build an aircraft carrier.

"They figured it would cost around $852 quadrillion," he said. "That's not the total cost of the Death Star; that's just for materials."

On top of materials, Feinstein said, design and construction amounted to another astronomical price.

"With design and labor costs, we get the cost of the first Death Star to be around $193 quintillion," he said. "The second one, which was significantly larger, would've cost $419 quintillion. To put that in perspective, the U.S.S. Gerald Ford cost $17 billion."

The investment in the battle stations, Feinstein said, would have been in vain. In the original movie trilogy, rebels destroyed each of the two battle stations and overthrew the Empire.

"I found this would be devastating to the galactic economy," he said. "I think Palpatine knew that. At least they were blown up when they were new, so the Empire did save a lot on maintenance."

The destruction of the Death Star, Feinstein said, would have started a chain of events destroying the entire galactic economy in the fictional universe. All the post-war problems, he added, start with the banks.

"The Intergalactic Banking Clan is essentially the Federal Reserve of the galaxy," he said. "We're going to assume they have a net worth similar to the Federal Reserve after World War II. They're not that much more wealthy than we are. You have a vast income inequality in the galaxy."

The terrorist acts of the rebels, Feinstein imagined, also would have wreaked havoc on the galactic stock market.

"The financial sector that would have existed is going to be in favor of the status quo," he said. "The blowing up of two Death Stars, killing of the emperor and Darth Vader's death would have been seen as a very successful terror attack. Markets drop significantly during a terrorist attack."

Feinstein said his research involved meticulously watching everything considered Star Wars canon, which includes the original trilogy (1977-1983), the prequel trilogy (1999-2005) and the Clone Wars cartoon series (2003-2015.) In the movies and episodes, what were once considered small subplots became essential to his research, he added.

"In one of the episodes of the Clone Wars TV show, one of the plots is about deregulating banks," he said. "If your bank was affected by the attacks, you lost your deposit, and lost your money."

Feinstein said he even included the political climate and interest rates in his research.

"We have this economy in crisis," he said. "We assume the Death Stars are funded by debt. However, a lot of these bonds will have been paid off. We'll assume the emperor, being a totalitarian, imposed a zero-percent interest rate."

With such a bleak economy, and unlike the Great Recession in the U.S., there were more than likely no bailouts, said Feinstein.

"We can assume no bailouts were given," he added. "It wouldn't be politically feasible. That's something the rebels wouldn't be able to do. They didn't have the reserves."

The crippled economy, Feinstein added, may have even given rise to "The First Order," a successor to the totalitarian Empire which debuts in the latest installment, "Star Wars: The Force Awakens."

"This leads me to believe if they had an event like this, people would no longer have an economy," he said. "That's why we have the First Order. Storm Troopers in 'The Force Awakens' weren't clones; they were people. You had to be in a pretty bad economy to sign up to be a storm trooper."

The research, which provided him an ample opportunity to geek out with his friends, are still significant in our world, Feinstein said.

"What does this mean for us, and why do we care?" he added. "Systemic crises happen regularly. If you look at the patterns, every 10 years something comes up that affects the global economy. Last crisis was in 2008, so we're coming up on that."

The crippled galactic economy in Star Wars, Feinstein said, could have possibly been prevented. The lessons learned from the rebels, he added, are extremely relevant in any economic situation.

"Even though this was all terrible for the economy, this was a totalitarian regime," he said. "If the rebels were able to overcome this, it would be a positive thing. It's a problem of not planning ahead and shooting first, and not thinking about what your actions will cause."