Why 9 out of 10 Death Stars are doomed to fail

The launch of Rogue One, the latest chapter in the Star Wars franchise, allows us to have a look at economic theories on space trade and war

Greg Langley & James Lawrence

As Jyn Erso steals the plans of the “ultimate weapon,” she has no idea that she is setting off a chain of events that will unleash a power far more devastating than the superlaser of the Death Star: recession economics. Played by actress Felicity Jones in Rogue One, a prequel to the blockbuster Star Wars series, Erso is a member of a ragtag team that pit their wits against the might of the Galactic Empire.

Yet while the Death Star destroys planets across the galaxy, it is the destruction of the two Death Stars by rebels, as depicted in the original Star Wars and Episode VI films, that ultimately leads to truly catastrophic system collapse. At least that is the theory of Zachary Feinstein, an assistant professor with the Electrical and Systems Engineering Department at Washington University in St. Louis.

Last year Feinstein analysed the Galactic economy of the beloved franchise in It’s a Trap: Emperor Palpatine’s Poison Pill. Comparing the price ($17.5 billion) and size (100,000 metric tons of steel) of the USS Gerald Ford with the size of both Death Stars, Feinstein placed the price tag for the Death Stars at $193 quintillion for the first and $419 quintillion for the second.

Though astronomical, the cost was manageable compared to the estimated $4.6 sextillion galactic economy, he told PROJECT M. However, the destruction of both Death Stars within a four-year time span would have been a staggering economic blow to the Imperial financial sector.

Geek galactic economics

Feinstein is operating in a curious nexus between fanboy fanaticism and geek economics, but his musings are not as fantastical as they first seem. There is a growing tradition within the economics profession of pondering the implications of space. Location theory, the study of what economic activities are located where and why, stretches back to German economists in the 18^th century, but it took a future Nobel Prize winner to take it outside the stratosphere.

How is time travel factored into interest rate calculation?

If humanity ever expands across the galaxy and colonizes other worlds, then a neglected paper by Paul Krugman may be considered on a par with Adam Smith’s The Wealth of Nations as a fundamental basis of economics. In the late, frustrated by a lack of interest in his other work (which later earned him the Nobel Prize), Krugman sat down to write about trade between two distant planets, Earth and Trantor.

A Theory of Interstellar Trade, a “serious analysis of a ridiculous subject,” investigates how trade will be affected by relativity theory, with beings on the two planets seeing time pass at a different speed from those on board space ships moving between the two. If the crew of a space ship experience ten years while 30 years pass on the planets they are travelling between, how do you calculate the interest rates on the cost of goods sold?

Taxation is relative

Krugman’s work eventually kicked off a flurry of activity. Science fiction writer Warren Salomon argued that the only economic incentive for space travel, given that the payoff is decades away at best, is the effect of time dilation and compound interest.

Tyler Cowen, of George Mason University, in Virginia, later countered against arbitraging where no man has arbitraged before by pointing out that the Fed could be tempted to subsidize starship fuel to stimulate the economy with the result being that possibly everyone could end up living in the future! Adam Chodorow, a professor of Law at Arizona State University, contemplated whether income earned during space flight should be subject to income tax and, if so, at what rate.

Galaxy trade stimulus

Back to Feinstein. In a future where we meet space-fearing aliens in a far-flung corner of the galaxy, he believes the economies of both species could explode. New worlds and new trading partners mean additional energy sources and new technology that maybe we can’t begin to even imagine. Yet economics might have to start again to find its place in this new world and rethink everything from the role of central banks to common currencies, while the cost-benefit analysis of alien immigration will really put the emphasis on “alien.”

There is no guarantee aliens communicate in the same way we do. Zachary FeinsteinHowever, the biggest challenge will not be as complex as many think. “Communication,” says Feinstein. “There is no guarantee aliens communicate in the same way we do.”

Body language won’t help, with the rules unlikely to be the same. Our first interactions with aliens will likely involve misconceptions, confusion and some very offended dignitaries. War is a possibility, although with the distances required to travel across space, both species will have time to cool off.

Conflict is central to the Star Wars franchise and Feinstein points out that, after the destruction of the second Death Star, “preventing a total financial collapse would require a bailout of at least 15-20% of the entire economy’s resources.” He explains, “It is unlikely the Rebel Alliance could have found the political will and financial resources to provide the bailout, which makes universal systemic collapse almost certain.”

In the opening scene of Episode 7: The Force Awakens, heroine Rey (Daisy Ridley) risks her life to scavenge parts from a crashed Star Destroyer on the planet of Jakku. “This is not the sign of a healthy economy,” Feinstein says, arguing that this may be how the First Order managed to rise so quickly after the Death Star’s demise.

Death Stars doomed

But does it make sense to build a Death Star in the first place? Depending on conditions and leaving aside the rather large moral issue, it could offer an infrastructure investment opportunity that is out of this world, but investors should beware. Bent Flyvbjerg from the Saïd Business School at Oxford University, says that on Earth, nine out of 10 mega-projects fail in terms of cost overruns or benefit shortfalls, or are not completed on time.

The first space projects have not fared any better. The International Space Station famously cost four times its $17 billion budget. Virgin Galactic, one of the first privately owned space ventures, came with an original estimated cost of $108 million and a scheduled completion date of. Commercial flight testing is only due to begin this year, almost seven years later. The cost is harder to pin down but total investments of over $600 million suggest space may not be immune to mega-project curse.

With three out of three Death Stars depicted in film already destroyed, the average in the Star Wars Universe does not seem any better than on earth. However, Feinstein describes the Emperor’s motivation as less financial and more classic evil villain; the Death Star promised either galactic domination or “mutually assured destruction.”

On the other hand, investors excited by the Death Star would probably follow Too Big to Fail reasoning. After all, who would be crazy enough to destroy a project that would bring down the Galactic Empire and send the wider economy into catastrophic recession?

Why 9 out of 10 Death Stars are doomed to fail

The launch of Rogue One, the latest chapter in the Star Wars franchise, allows us to have a look at economic theories on space trade and war

Greg Langley & James Lawrence

Why 9 out of 10 Death Stars are doomed to fail

The launch of Rogue One, the latest chapter in the Star Wars franchise, allows us to have a look at economic theories on space trade and war

Greg Langley & James Lawrence

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