The Economics of Politics in Star Wars - The Empire Strikes Back

The Empire Strikes Back, chronologically the fifth Star Wars film, entails the Imperial counterattack against the Rebel Alliance, following the destruction of the Death Star in A New Hope. Though the crown jewel of the Emperor's military complex is gone, most of the massive armada remains. The Rebellion has fled to the far reaches of the galaxy, on the ice planet Hoth, to avoid the grasp of Empire.

Darth Vader, desperate to find the Rebels, orders thousands of probe droids sent throughout the galaxy. When an empire has reached a critical mass of military buildup, the next logical step is surveillance. In order for The Emperor's ultimate quest, absolute power, to be attained, he must necessarily control the information of the galaxy and monitor the activities of its citizens.

Though this may be the first use of these droids, and they're used solely for rooting out "enemies of the Empire", it's not a stretch to assume that the data-gathering capabilities of the probe droids may be used on peaceful citizens in the future.

Thanks to the droid, the Empire discovers the Rebel base and attacks, forcing an evacuation. Han Solo and a Rebel leader, Princess Leia, escape aboard his ship the Millennium Falcon. Eluding Vader, he is forced to call in a team of bounty hunters to search for them. This move shows the limitations of the Empire, powerful as it may be. Individuals operating outside of its control, the bounty hunters, are better equipped to do the job the military can't do. They are free to innovate, to experiment, and to operate independently.

Eventually, the Falcon lands on Cloud City. Cloud City is a small gas mining colony, run by Lando Calrissian. A former smuggler, and friend of Solo, he has decided to take up a more "legitimate" entrepreneurial business, undergoing the risks of starting a new firm. By bearing the risk, Lando stands to succeed or fail based on his own effort. This is the sort of free economic activity the Empire seeks to control.

"We're a small outpost, and not very self sufficient. I've had supply problems of every kind, I've had labor difficulties..."

Lando operates outside of prohibitive Imperial supervision and regulation, allowing him to more easily innovate and turn a profit. Furthermore, he has evaded the industry's own regulator, the Mining Guild. Industrial self regulators, like the Mining Guild, seek to limit entry into a market and artificially prop up prices and restrict competition. Competition like the upstart Cloud City.


Lando: "So you see, because we're a small operation, we don't fall under the jurisdiction of the Empire."

Leia: "So, you're part of the Mining Guild then."

Lando: "No, not actually. Our operation is small enough not to be noticed. Which is advantageous for everybody, as our customers are anxious to avoid attracting attention to themselves."

Han: "Aren't you afraid the Empire's gonna find out about this little operation, shut you down?"

Lando: "It's always been a danger, but it looms like a shadow over everything we've built here...I've just made a deal that will keep the Empire out of here forever."

Lando, desperate to keep the Empire from crushing his business, betrays Han and Leia and surrenders them to Darth Vader. Knowing that he operates outside of Imperial control, the threat of Imperialization "looms like a shadow" over the operation. When the chance came along seemingly guaranteeing independence, he had no choice but to take it.

Though he eventually has a change of heart and joins the Rebellion, Lando's gambit demonstrates the prosperity and freedom that can emerge for all, if the government merely gets out of the way. The Emperor, not content controlling the government and the galaxy with a mighty military force, is intent on economic control as well.

The Empire Strikes Back is often lauded as the best of the Star Wars films. It shows an Empire yearning for complete domination of the galaxy. The beginnings of a surveillance state (justified by the threat of attack, of course) are seen, as is the threat of economic Imperialization over a thriving free enterprise.

(Analysis continued for The Return of the Jedi HERE.)

The Economics of Politics in Star Wars - A New Hope

The first Star Wars film release, A New Hope, takes place approximately nineteen years after the events of Revenge of the Sith. Luke Skywalker, the son of Anakin Skywalker aka Darth Vader, has grown up in a galaxy ruled by the iron fist of the Empire.

In a first of a series of deleted scenes, Luke watches the famous opening of A New Hope from Tatooine, as an Imperial Star Destroyer chases down and captures Tantive IV, controlled by the fledgling Alliance to Restore the Republic (also called the Rebel Alliance). The Rebel Alliance has grown since its inception, primarily through the efforts of dissatisfied Senators in the new Imperial Senate. Unable to limit the Emperor's absolute power in any official capacity, they have slowly begun gathering forces to oppose the Empire.

Later (in another deleted scene), Luke meets up with an old friend, Biggs Darklighter, who has returned from the Imperial Academy while training to be a pilot. He plans to "drop ship" as soon as possible and join the Rebellion instead. Trying to convince Luke, who hates the Empire, to join, Biggs notes the steady growth Imperial involvement in economic affairs.

"You know they're starting to nationalize commerce in the central systems...it won't be long before your uncle is merely a tenant, slaving for the greater glory of the Empire."

Luke's uncle, a small-time moisture farmer, may soon face the threat of directly working for the Empire. The nationalization of key industries, and greater government regulation and control, is a staple for budding totalitarian regimes. The Emperor had already begun nationalization (or, as it sometimes referred to, "Imperialization") immediately following his rise to power, absorbing the commercial apparatus of the former Separatists.

Emperor Palpatine recognizes the importance of economic affairs to the galaxy. In his constant quest for more and more power and control, he has begun to stifle the free economic activity of individuals throughout the galaxy, except those whom he rewards with special favors and contracts.

The Imperial Economy is a classic example of crony capitalism or cronyism, where the market allegedly functions freely, but is in fact heavily influenced and controlled by the government. In this case, the Empire might Imperialize competition, so that one politically favored firm should have an advantage.

Luke eventually does join the Rebellion, flying off Tatooine with the assistance of a famed smuggler, Han Solo. Smugglers like Solo have been on the rise in the Age of Empire, as many seek to engage in economic activity outside of the control of the Imperial bureaucracy in black markets.

In addition to economic controls, growing bureaucracy, and centralization, the new Empire has also channeled immense resources into military buildup. Most famously, as seen in A New Hope, they have constructed a superweapon capable of destroying an entire planet, the Death Star. The Death Star, and the previous military buildup, are the deliberate designs of the Emperor, hell-bent on complete control of the galaxy.

Grand Moff Tarkin, commander of the Death Star, elaborates on the Emperor's plan.

"The Imperial Senate will no longer be of any concern to us. I have just received word that the Emperor has dissolved the council permanently. The last remnants of the Old Republic have been swept away forever....The regional governors now have direct control over their territories. Fear will keep the local systems in line. Fear of this battle station."

As enough time (nineteen years) passes, even the trappings of the Old Republic are swept away. The Emperor, confident in his power, no longer keeps up the pretense of a republican government. Though written well before the prequel trilogies, the Imperial government in A New Hope fits in well with the standard pattern of totalitarian empire.

Furthermore, the Emperor plans to rule the galaxy through fear. The massive military buildup, the Death Star, the constant threat of Imperialization of commerce. All of it serves to further Palpatine's power and control. Though lauded in his early political career as a great man, one strong enough to "get things done", his creation of Galactic Empire is a perfect illustration of where "greatness" in politicians often leads. The cliche, but true, quote of Lord Acton sums it up.

"Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men."

Throughout A New Hope, the dangers of nationalization and government control of an economy, along with the the military buildup and continually increasing power of a totalitarian empire, are well illustrated. Formed under the guise of peace and stability, the Empire has become an instrument of fear and destruction. As with the prequel trilogies, these issues are not necessarily the main focus of the film, but serve as a necessary backdrop in order for the action of the film to take place.

(Analysis continued for The Empire Strikes Back HERE.)

The Left's War with Uber

Uber is a fast-growing company that serves as a unique alternative to traditional taxi service. Rather than try to hail a cab, one can simply request a ride through the Uber app. Independent Uber drivers then see the request, and come pick you up. The process is safe, easy, and often cheaper than a taxi.

Uber is a remarkable new innovation that improves the lives of many Americans. Despite that, Democratic Presidential candidates Hillary Clinton and Bernie Sanders recently come out against it. Clinton starts off with paying lip service to the innovation that companies like Uber bring to the economy, but quickly switches to condemnation for their employment strategies.

Essentially, Uber treats all of their drivers as what they are: independent contractors. They are simply individuals willing to use give rides to others using Uber in exchange for money (which Uber takes a cut of), all done through the app. At no point in the process does Uber actually direct the drivers in any way. They are free to work as much or as little as they please, and take whatever jobs they see fit. If the drivers don't like it, they're free to quit at any time.

Hillary Clinton sees this arrangement, but ignores the mutual benefits between Uber, the drivers, and the passengers. Instead, she decries the lack of benefits and security that drivers have. She is correct that Uber doesn't offer maternity leave, but why should they have to? The vast majority of Uber drivers are happy to work under the conditions they are offered, so why should regulators have to step in to fix a perceived problem?

Clinton is not alone. Senator Bernie Sanders agrees, citing serious problems with Uber due to a "lack of regulation". Both Sanders and Clinton profess to want more jobs and more economic growth in America. Uber is a quintessential American innovation, using technological advances to offer a superior product. Their opposition to this speaks volumes to their economic ignorance.

New York Mayor Bill de Blasio recently tried to cap the number of Uber drivers in New York City, citing similar fears to Clinton and Sanders. He dropped the plan after a the public outcry against the proposed scheme, which was widely perceived to benefit only the city-licensed cab drivers, and not the people of New York City.

Many politicians on the left who attack Uber miss the point. Uber provides quick, quality service that benefits both the driver and the passenger. It is a perfect example of a market innovation that improves the lives of people across the nation. Clinton should be praising Uber, not attacking them.

The market created Uber, and politicians are trying to destroy it.