By Nicholas Haberling
A little over a year ago, before Star Wars Episode VII: The Force Awakens was released, I would search the internet for any information about the return of my favorite franchise to the big screen. During one such search I came across an article explaining how the destruction of the Galactic Empire’s two Death Stars proved insurmountable for the galaxy’s banking industry to withstand and led to a galactic economic depression. As a loyal subject of the Emperor I’ve always found the idea that the Empire was defeated by a group of disgruntled teenagers and politicians to be extremely distasteful. Now, to think the Empire was brought to its knees by economic means like some primitive nation from the planet Earth? Impossible. Thus began my quest to disprove It’s a Trap: Emperor Palpatine’s Poison Pill by Professor Zachary Feinstein of Washington University.
It's a Trap Summary
The first objective Professor Feinstein set to accomplish was building a model of the Galactic economy within the borders of the Empire. First the assumption is made that the dollar and the Imperial credit have a 1:1 currency exchange rate. Next, Feinstein attempts to find the cost of the first Death Star. Assuming the 140km in diameter space station has the same density and cost to components ratio as the USS Gerald Ford, the battle station would cost $193 quintillion dollars including research and development costs. The second Death Star which Feinstein reports as being 900km in diameter would cost $419 quintillion not including research and development costs.
Using the ratio of the United States’ atomic weapons project costs compared to the nation’s GDP during World War II, a similar scenario is envisioned in our favorite fictional galaxy. This ratio when used alongside the first Death Star’s cost states that Gross Galactic Product (GGP) would be $4.6 sextillion per year. Furthermore it is suggested that from the end of The Clone Wars to the Battle of Endor that GGP would grow at 2% per year. Feinstein has GGP equaling $6,090 quintillion by time the second Death Star is destroyed (more on that number later). With the assumption that the banking industry makes up 60% of the galactic economy that means the $3.653 quintillion this industry represents faces systemic risk when the second Death Star is destroyed.
Moving along, Professor Feinstein makes the assumption that at the time of the Battle of Endor, 50% of the first Death Star had been paid off while none of the second had been. This totals to $515.5 quintillion. With the Emperor’s death at Endor the legitimacy of the Empire’s institutions would come into question likely resulting in at least $515.5 quintillion of government bonds defaulting. This would have disastrous consequences for the financial system in the galaxy. In short, in order to cover depositors insurance with the banks and ensure GGP doesn’t fall below 1% in the worst 10% of cases in Feinstein’s models, the Rebel Alliance would need 20% of GGP ready in reserve in order to bail out the banks.
My first attempt at trying to disprove Professor Feinstein’s findings was to look at his rationale for his initial assessment of GGP being $4.6 sextillion. From the start I thought using government weapon research budgets as an indicator for GDP was strange so I instead turned to something I deemed a little more reliable: population. As the only planet with intelligent life and an economy that we know of I was going to compare Earth to the Star Wars galaxy. The Empire at its height contained 100 quadrillion sentient individuals or the equivalent of over 13.8 million Earths. Assuming each planet had a nominal GDP of $78 trillion this would mean GGP was $1.083 sextillion. Less than 25% of the $4.6 sextillion Feinstein reported GGP as being at the end of The Clone Wars.
This left me stumped. I was prepared to admit defeat until I remembered that the population distribution in the Star Wars galaxy is the opposite of our planet. On Earth, a disproportionate share of the economic activity is generated in high income countries with smaller populations. In Star Wars the majority of the galaxy resides on high income worlds. With this in mind I decided to map out a population distribution of the Star Wars galaxies based on galactic regions. I would then assign GDP per capita for each region based off economic indicators found on Earth.
I first took into account the categories of High Income, Upper-Middle Income, Lower-Middle Income, and Low Income countries. I then added the ten countries with the largest GDP per group and found their corresponding GDP per capita. After that I took the five countries with the highest GDP per capita in their group and averaged it out. For example to get the GDP per capita for the High Income parts of the Star Wars galaxy I took the GDP per capita of the US, Germany, the UK, Canada, and Australia, which resulted in an average GDP per capita of $46,789.
My population distribution of the Star Wars galaxy is hardly scientific. The distribution of the population is the product of guesses based off descriptions of each region in Wookiepedia. The designation of which economic classification each region receives is based off the quality of life witnessed in the films and TV shows. The distribution can be viewed in the accompanying Excel file. Regardless, the $4.068 sextillion I came up with was well short of the $4.6 sextillion from Professor Feinstein.
The Second Death Star
At this point I had nearly given up hope while I searched through Feinstein’s work for some hidden flaw. Then I saw it. It was the equivalent of a thermal exhaust port leading straight to the reactor core of an infallible weapon system: Feinstein had cited the second Death Star as being 900km in diameter. This 900km number came from Industrial Light and Magic who provided the special effects for Return of the Jedi. According to their material, the scale of the second Death Star in comparison to other objects made its diameter 900km. However, Wookiepedia and media released later state that the second Death Star was 160km. On top of that Starkiller Base in The Force Awakens is 660km and the hologram shown in the movie clearly shows the First Order’s superweapon being larger than the second Death Star. Therefore the ultimate rule of fictional universes still stood: canon descriptions will always trump artistic interpretation.
With this in mind it was now time to find the correct cost of the second Death Star. However, in order to do that we first need to separate the research and development costs of the first Death Star from its production costs. In Feinstein’s paper, he used the USS Gerald Ford’s density and cost structure to find the first Death Star’s total cost. The USS Gerald Ford cost $17.5 billion with $4.7 billion being the result of research and development. Assuming that production cost was 73.14% of the total cost that means of the $193 quintillion spent on the first Death Star, $141 quintillion came from labor and raw material.
160km/140km = 1.143
$141 quintillion X 1.143 = $161 quintillion
With the second Death Star only being 14% bigger than the first and having no need for research and development this means the battle station cost $161 quintillion. A staggering amount but well short of the 900km monstrosity that had a $419 quintillion price tag.
More Star Wars Canon
Moving along we should also address the research and development costs associated with the first Death Star. In Star Wars Episode II: Attack of the Clones we see the leader of the Confederacy of Independent Systems, Count Dooku, presented with the Death Star plans. We can therefore infer that the majority of the R&D costs were incurred by the CIS as Wookiepedia states, “Furthermore, he (Poggle the Lesser) would admit that the Stalgasin hive hadn't had time to design the station's main weapon before the Battle of Geonosis interrupted development.” With this information we can assume that the only research costs for the Empire after The Clone Wars was the development of the Death Star’s super laser. We will say that the super laser was 50% of the total research and development cost or $25.9 quintillion. Additionally new information has come to light via Rogue One: Catalyst that the first Death Star’s size was 120km rather than 140km. This also reduces the production costs for the Empire.
Being only 86% the size of the Death Star cited in It’s a Trap, this Death Star’s production cost is reduced to about $120.99 quintillion. All these factors will help us find out the real cost of the Empire’s default after the destruction of the second Death Star over Endor. Let’s break this down.
Death Star 1 Total Cost
$51.8 quintillion (R&D) + 120.99 quintillion (Production) = $172.8 quintillion
Imperial DS1 total Cost
$25.9 quintillion (R&D) + $120.99 (Production) quintillion = $146.9 quintillion
As you can see, stealing the Death Star plans from the CIS saved the Republic and then the Empire a lot of money on the research side of the balance sheet.
Now, Professor Feinstein made the assumption that by the time of the Battle of Endor approximately 50% of the funds needed to build the first Death Star had been paid back. But none for the second Death Star. This means the total of Imperial bonds for just the Death Star projects was valued as so:
DS1 + DS2 = Total Imperial bonds
$73.45 quintillion + $161 quintillion = $234.45 quintillion
This is less than half of what was reported in It’s a Trap.
Reviewing GGP and the Star Wars Banking System
Next we need to revisit the galaxy’s GGP at the time of the Battle of Endor and the size of the banking industry. If I understood Professor Feinstein’s paper correctly, he suggested that the galaxy’s GGP would grow by 2% per year after the end of The Clone Wars. He concludes that the $4.6 sextillion GGP would grow to $6.09 sextillion by Endor. However when I used his numbers I have GGP growing to $7.1 sextillion by Endor. Even using my number of $4.068 sextillion as GGP at the end of The Clone Wars, GGP still grows to $6.29 sextillion by Endor. Professor Feinstein is levels more qualified than me at this sort of analysis so I’m sure there is some information I’m missing or a miscalculation on my part. I just thought this discrepancy between his and my calculation was worth pointing out. However, with that in mind we will be using Professor Feinstein’s number of $6.09 sextillion. This would mean that the banking industry is worth 60% of GGP or approximately $3.654 sextillion at the time of Endor.
Tying all of this together
The objective of It’s a Trap is to find the financial bailout the Rebel Alliance would need on hand in order to prevent a drop of 1% GGP in the worst 10% of modeled scenarios. I’m not going to even pretend I know how this model is made or what goes into it. I am sure there are some multiplier effects involved here whose properties I am ignorant of so for the sake of simplicity I’ll use simple ratios based off the information given. We will begin with using Professor Feinstein’s numbers.
At $515.5 quintillion the Empire’s bond defaults would be equal to 14.1% of the galaxy’s banking industry or 8.46% of GGP. In order to avert a drop in GGP greater than 1% the Rebel Alliance must have on hand 21.5% of GGP to use as a bailout or in other words: $1.309 sextillion. This essentially comes down to that for every percent of GGP that the Empire defaults on, an additional 2.53% of GGP is required for a successful bailout.
This means that the number I got for the Empire’s bond default, $234.45 quintillion, is 3.84% of the GGP reported in It’s a Trap at the time of the Battle of Endor. This then implies that in order to prevent a drop in GGP greater than 1%, 9.74% (3.84 x 2.53) needs to be put into the Galactic economy. This is the equivalent of $593.16 quintillion.
Would a bailout be possible?
While there would certainly be political turmoil within the Rebellion over whether or not to bailout banks that had a hand in the construction of the Death Stars, the most important question to answer is if the political will existed, could the Alliance save the Galactic economy? The answer I believe is, yes. According to Business Insider if everyone on Earth were to liquidate all their investments and pay off their debts, we as a planet would have $241 trillion in wealth. That means that wealth is 3.4 times greater than the $70.8 trillion in global world product. Assuming the Star Wars galaxy operated under similar conditions with a GGP of $6.09 sextillion by the time of the Battle of Endor, that would mean the galaxy as a whole would have $20.706 sextillion in wealth. Assuming just 15% of the population/star systems in the galaxy sided with the Rebellion that means they would have $3.106 sextillion in wealth. I’m sure it would be difficult to scrounge up all the resources and whatnot in a timely manner, but at least this shows it’s a possibility.
Ultimately any attempt to model the Star Wars galactic economy or develop a cost structure for the Death Stars will stir up some level of debate. There are arguments that based off our own economic growth, 500 years in the future a Death Star won’t look like an insurmountable planetary project or that the Empire had access to economies of scale we can’t begin to comprehend. It’s what Star Wars fans do. We love to take the assumptions made by other fans and try to blow them up. But in the end it’s all in good fun and I encourage anyone who has read this far to take a look at Professor Feinstein’s work because it is far more impressive than what I have presented here. Regardless of the Death Star’s real cost or impact on the galactic economy, the battle station is still the ultimate power in the universe.
It's a Trap: Emperor Palpatine's Poison Pill
Population and GDP
The Star Wars galaxy
World population 2014 (7.2 billion)
World GDP (78 trillion in nominal dollars)
Country development classifications
GDP per capita
Country GDP per capita
Death Star size
Executor vs Death Star 2 to scale
USS Gerald Ford
World gdp vs world wealth