The Economics of Politics in Star Wars - Revenge of the Sith

In the concluding film of the prequel trilogy, Revenge of the Sith, Palpatine's ambitions are finally realized. Three years after the events of Attack of the Clones, and thirteen years after he manipulated his way to the Chancellorship in The Phantom Menace, Palpatine remains in power. As the film opens, the Jedi (and the Republic at large) are still unaware of his sinister plans as the puppetmaster behind both sides of a galactic war, the so called "Clone Wars".

The film opens with Palpatine engineering his own kidnapping by the Separatists. Interestingly, he is held on board a flagship dubbed Invisible Hand. In economics, the "invisible hand" of course refers to the famous use of the phrase by Adam Smith. According to Smith, individuals acting in their own self interest unconsciously promoted some social good, as if their actions were guided by an "invisible hand". Broadly speaking, Smith showed that individuals acting in a free market, pursuing their own self-interest, were able to unconsciously build a better and more prosperous society for all. As Adam Ferguson famously put it, the economy (and other societal institutions) developed "the result of human action, but not the execution of any human design".

Palpatine is "rescued" by Anakin Skywalker and Obi-Wan Kenobi, with the former killing Count Dooku in the process, and crash-land the Invisible Hand into the planet below. It is fitting that the movie which shows the culmination of Palpatine's plot for the concentration of power into the state, and away from free individuals, also shows the collapse and destruction of the Invisible Hand. Palpatine is no friend to free enterprise, as will be demonstrated in his yet-unrealized role as Emperor.

In fact, the Separatist Movement is largely built on the idea of self-governance, and a rejection of the excessive taxation and control of the Galactic Republic. Though the movement was doomed at the start (as Palpatine never intended for their victory), the Separatists represent a last-stand against more and more centralized power.

Later, once the Jedi realize that Palpatine is Darth Sidious, a Sith Lord and mastermind behind the Clone Wars, they attempt to arrest him. Mace Windu, leader of the arrest, later dubs Palpatine "too dangerous to be left alive", as he controls the Galactic Senate and the court system. In other words, Palpatine has so effectively centralized power that he cannot be stopped within the political system, as is often true of tyrants and dictators. The only move left is extra-legal force.

Fortunately for Palpatine, Anakin abruptly switches his allegiance from Jedi to Sith, and saves Palpatine from the attack. He does so because Palpatine, throughout the film, has been hinting at the Sith ability to stop death. Anakin fears the death of his wife, Padme (who remains a Senator) in childbirth, due to visions he's been having.

So, he joins Palpatine, citing the great "power" that he can gain from doing so. Though the emphasis in the film is on the power of the force, Palpatine's soon to be formed Empire will also hold a tremendous amount of political and coercive power as well, and Anakin would receive a portion.

Newly dubbed "Darth Vader", Anakin proceeds to slaughter the Jedi, and later, the Separatist Leaders. Meanwhile, in a session of the Senate, Palpatine claims the Jedi were attempting a coup. Using the alleged attack as justification for assuming even greater power, Palpatine declares the Republic over, and the Empire begun.

"In order to ensure our security and continuing stability, the Republic will be reorganized into the first Galactic Empire, for a safe and secure society which I assure you will last for ten thousand years."

Notice that Palpatine justifies the transition as all tyrants do, for "security and stability". Many are willing to sacrifice freedom in exchange for safety, especially in the face of a crisis. All of the plot of the prequel trilogy has led to this. A galactic war, the creation of massive armies, and an elaborate conspiracy to end the Jedi Order, all for the sake of complete political domination of the galaxy.

Padme, sitting in session, notes that "...this is how liberty dies. With thunderous applause." Though some Senators, who would later go on to form the Alliance to Restore the Republic, oppose the move, most of the Senate accepts it without hesitation. She later comments on the decay in the Republic that led to Palpatine's rise to power.

"What if the democracy we thought we were serving no longer exists, and the Republic has become the very evil we have been fighting to destroy?"

While the political maneuvering of the newly crowned Emperor was necessary to end the Republic, the system had become politically corrupted long before. The Senate was not truly a place of "democracy", but narrow-minded Senators pursuing their own self interest, rather than a common good. This was not a problem solely with the quality of Senators, but with the political incentive structure set in place. This flaw is hardly exclusive to the fictional Galactic Republic.

Political corruption and decay leads to inefficiency in government action and a growth of bureaucracy (as seen in The Phantom Menace). The growing dissatisfaction with the status quo leads to appeals for a strong leader who can "get things done". The process is helped with some crisis or another, usually a war (such as the Clone Wars), which concentrates power more and more into a charismatic leader. Eventually, the trappings of democracy (or political process) are abandoned, and a new Empire stands.

The fall of the Republic, as seen in Star Wars, beautifully captures similar situations in reality. The fall of republic and the rise of empire under the political influence of a strongman can be seen in all of human history, from Caesar's Rome to Hitler's Third Reich. For all the faults of this part of the Star Wars saga, the strength of the political plot shines through.

(Analysis continued for A New Hope HERE.)