A paper written by Zachary Feinstein discussing the economic consequences of blowing up the Death Star has been making the rounds on social media. While I’m a fan of using Star Wars to teach economics, Feinstein makes a very basic economic mistake in his focus on the Death Star’s destruction.
The paper actually starts out strong. Feinstein notes that, “Economics and finance, much like the Force as explained by Jedi Master Obi-Wan Kenobi, is ‘created by all living things. It surrounds us and penetrates us; it binds the galaxy together.’” Unfortunately, the author shifts from looking at the organic economy towards the dark side of economic models and aggregates – in this case Gross Galactic Product. The paper goes on to outline the quintillions that would be spent in the construction of the Death Star, the estimated size of the galactic banking system and the bailout that would be needed to restore financial confidence after the collapse of the Empire.
While some of the points made are interesting, the paper overlooks that the real economic problem with the Death Star is that a genocidal government built it at all.
I would point both Feinstein (and Emperor Palpatine) to Henry Hazlitt’s Economic in One Lesson. In the words of Hazlitt:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
By simply focusing on the seen – the Death Star – Feinstein fails to consider the opportunity costs involved in the creation of the vessel in the first place. For example, the paper notes that the steel required to build the Death Star would be valued in the equivalent of hundreds of quintillions of dollars. Imagine the number of sometimes-helpful droids that could have been built by that same steel on a free galactic market if it were not reallocated to the diabolical plans of the government!