Economists Discuss the Financial Repercussions of the Destruction of the Death Stars (hackaday.com)

szczys writes: What would the Galactic Economy look like following the destruction of two Death Stars? This is the informed Star Wars debate taking shape between to people who know their economics. Elliot Williams, a Ph.D. in Econometrics, has just debunked the work of Zachary Feinstein who claimed that the Rebel Alliance would have been off had they not destroyed the two Death Stars because what they're left with is a Galactic Economy in ruin. Feinstein, a professor at Washington University in St. Louis, published a scholarly paper early this month saying it was financial suicide to destroy both of the giant construction projects. Williams' take on things is that the project was a sunk cost; destroyed or whole the Death Star expenditures already made are gone and not likely to further cost or benefit the new government. Perhaps most interesting in the discussion is how you estimate the cost of the Death Star projects and the GGP — the Galactic Gross Product of the fictional universe.

Comments

This is stupid.

[Anonymous Coward]

Work on real problems, and if you can't see any and you're an economist, you're also fired.

Re:This is stupid.

[Impy the Impiuos Imp]

"News for Nerds. Stuff that matters."

This is the first topic in a long time that's firing on all 8 cylinders, baby!

Re:This is stupid.

[ShanghaiBill]

Work on real problems, and if you can't see any and you're an economist, you're also fired.

Well, it does illustrate a basic economic concept: If you buy guns instead of butter, you cannot later change your mind and transmogrify the guns into butter. It is surprising how many people don't understand the principle of sunk costs.

Re:This is stupid.

[Hognoxious]

If you buy guns instead of butter, you cannot later change your mind and transmogrify the guns into butter.

You can if there's someone else with butter and no guns.

Re:This is stupid.

[swb]

You can if there's someone else with butter and no guns.

Which is exactly the central growth engine of many Empires.

Conquering new lands was a form of economic expansion. At a minimum they paid tribute (aka protection money) to you, more commonly your treasure was looted, your lands taken, your people taken back as slave labor, and so on.

The Death Star is just an efficiency improvement in the Empire's ability to conquer and control systems.

Re:This is stupid.

[penguinoid]

Death Stars are an incredibly cost-effective project, so long as you build them for the IRS and not for the military.

Re:This is stupid.

[ShanghaiBill]

Wouldn't it be quicker to just blow up the lenders?

But even for that you do not need a Death Star. Even with our primitive technology, we could easily wipe out a planetary civilization with a few thousand tonnes of lithium deuteride and a plutonium trigger. The total cost would be less than $1B. The Death Star likely costs at least a few quadrillion dollars. The Death Star was a great plot device, but from the viewpoint of an economist, it made very little sense.

Re:This is stupid.

[AaronW]

It's even easier than that. All you need to do is lob a few big asteroids or comets. Even better it won't leave the planet a radioactive wasteland.

Re:This is stupid.

[Cochonou]

It makes a lot of sense from the viewpoint of an economist. It made millions of people go see the movie.

Re:This is stupid.

[Richard_at_work]

Sunk cost implies the guns have no ongoing value, whereas they become an asset you can use or sell later on - so yes, you can turn them into butter at a later date.

What you cannot do is use butter and then turn it into guns.

Re:This is stupid.

[Firethorn]

Sunk cost implies the guns have no ongoing value, whereas they become an asset you can use or sell later on - so yes, you can turn them into butter at a later date.

The problem with this would be that the death star is like a F-22 loaded with nukes, not something you're willing to sell to anybody else.

So you consider using it to intimidate others into paying 'not the empire' tax. Problem, the empire is most of the galaxy. What's the maintenance costs on it? How much does it cost to go from system to system.

Remember, any planet you actually use it on is gone, including all infrastructure. I imagine the core materials are easier to reach afterwards, but as technology has advanced, resources have become less important than infrastructure. The contents of a planetary core probably aren't that valuable, and besides, given the way they're probably flying all over the place, not to mention still hot, it'd be a while before you could harvest them anyways - odd orbits and all that. Lots of collisions so you have to constantly watch out for that.

Re:This is stupid.

[Richard_at_work]

Your F-22 with nukes is still very valuable as it stands, even if you don't want someone to have it as a usable single component - the flyaway cost of an F-22 was $150million in 2009, plus an average cost of $350,000 in 2014 for a nuclear weapon.

The engines are worth about $20million each, giving you $40million or so of recoverable value, then you need to consider the cost of the high grade aluminium in the airframe itself, giving you another few million. Avionics, radar etc are also saleable, especially to other aircraft operators (even of a different type, other countries routinely upgrade older airframes with brand new avionics and radar systems).

The nuke itself has a lot of specialist explosives in which would fetch a sum of money, and then you have the value of the uranium or plutonium itself.

As for the Death Star itself, lets remember that we saw very little of the Death Stars capabilities - in the first film, we saw it used to destroy an entire planet sure, but that was mainly a show of force to Leia than actual threat. Getting Leia to talk was worth more to the Empire than the planet of Alderaan (sp?) - especially as the Empire almost certainly no longer trusted that planet, considering one of its ruling members was captured aboard a Rebel ship...

In the third film we see the new Death Star being used to target individual capitol ships in the attacking Rebel fleet.

So why assume that a Death Star is limited to reducing entire planets to rubble and nothing else? It could easily be used as a planetary bombardment system - stand off in orbit and reduce individual cities to craters until the planet surrenders for instance. Or hell, the fact that it carries several thousand TIE fighters should be enough to wrap an entire star system in a siege.

 

Re:This is stupid.

[drinkypoo]

then you need to consider the cost of the high grade aluminium in the airframe itself, giving you another few million.

Actually, modern fighter jets are built with a whole bunch of titanium, including big arsed plates of it. So that's worth the big bucks, while Aluminum isn't. What makes a particular grade of aluminum expensive isn't the alloying, but the heat treating. That's destroyed when it's recycled, and has to be done again anyway, so it's a genuine sunk cost. They're also starting to use more composites, which are not really recyclable...

Re:This is stupid.

[Richard_at_work]

The major structural frames for both the F-22 and the F-35 are aluminium - titanium is used in particular places for its strength, but its too expensive to be used for standard airframe structural frames, as its too difficult to machine and work with. The major structural frames for the F-22 and F-35 are made on 50 year old presses owned by Alcoa - something that couldn't be done if the material used was titanium.

No aviation grade aluminium is recycled into more aircraft because its cheaper to start from scratch for certification purposes, but that doesnt mean that aviation grade aluminium doesn't have properties which make it sought after on the second hand market.

Re:This is stupid.

[drinkypoo]

The major structural frames for both the F-22 and the F-35 are aluminium - titanium is used in particular places for its strength, but its too expensive to be used for standard airframe structural frames, as its too difficult to machine and work with.

Yes, at the time you had to work with Titanium plates. Today, we can cast it. The amount of Ti in the military airframe is increasing.

No aviation grade aluminium is recycled into more aircraft because its cheaper to start from scratch for certification purposes, but that doesnt mean that aviation grade aluminium doesn't have properties which make it sought after on the second hand market.

It does, but it's not worth millions just because the completed airframe costs millions. It's only worth thousands.

Re:Before you think this is some sort of joke

[phantomfive]

It's not entirely unreasonable. Paul Volcker himself thinks the banks that took government money should be broken up. And he is not the only one. If something is too big to fail, then it is also too big to exist.

Re:Closed framed mind

[The-Ixian]

Yeah, ever try negotiating loan terms with a Sith Lord? Not fun, my friend.... not fun.

Re:Closed framed mind

[Hognoxious]

The problem isn't the negotiating, it's the unilateral modifications afterwards.

Wouldn't they die if they did not destroy them?

[Zorpheus]

I thought this was the whole point of the first destruction at least, to not be annihilated by it. But I guess economics can't comprehend the value of survival?

Wartime Economics Fail

[cmholm]

I don't have to read Dr. Williams' rebuttal to see that Mr. Feinstein was either trolling or lacking knowledge on some fundamentals of wartime economics: if the enemy is using a resource as a weapon in combat, it needs to be in some way destroyed or neutralized... especially if said weapon has and can be used to vape your civilian means of production, along with 100% of the co-located civilians.

Seems pretty obvious that blowing up planets

[nedlohs]

for things as trivial as trying to get a prisoner to talk is going to have a larger impact on the galactic economy than the destruction of the death star.

Death Star my ass.

[fahrbot-bot]

Seriously. It's a Death Moon. Ya, I know I/we heard someone say it wasn't a moon, but it is. Though I'm sure that if the International Astronomical Union (IAU) had there way, it would be called the Death Dwarf Planet or Death Asteroid. I'm going with Death Moon. Not nearly as sexy as "Death Star" or "AT&T" though.

Re:Stupid Assumption

[lgw]

An empire has an emperor. Communism has no government.

The Empire had a dictator. Communist USSR had a dictator. Communist China had a dictator. Communist Cuba had a dictator. Was there ever a Communist country that didn't have a dictator?

You want to hire someone to fix your space station? Though luck, everyone remotely competent is dead.

Nah, the population of the Empire was vast compared to the Death Star, and further the Empire was racist and (at least on screen) only employed humans on their flagship.

Re:Stupid Assumption

[lgw]

There's never really been a Communist country. The USSR, for example, was officially "State Capitalist".

And who are all these guys living in Scotland? Not one of them is a True Scotsman!

Both are incorrect

[nickol]

The true story is somewhat different, and it is about corruption. It's Empire, you know. Darth Wader got a government contract to build a Death Star. It was built not from iron and steel, but from cheapest available materials, using non-qualified workers and third-world subcontractors. In fact, the quality of the construction was so low, that it could fire only once. The Emperor somehow was aware of this affair and arranged an investigating committee (everything goes slow in Galactic Empires). At the time of Episode 4, this committee was already on board of the Death Star. Darth Wader had to do something to get away from this trouble. And he asked his children for help. He gave drawing of the Death Star to Leia and she delivered them to rebels. Rebels successfully destroyed the Death Star and the investigating committee. The only person who could run away was Darth Wader. And later he got another contract from the government - to build another Death Star. Which was never finished.

From the economical point of view, corruption is not good, but the waste of valuable construction materials was not so substantial. Most of the money went to Darth Wader's pockets.

Re:Aleron Death Star

[Cro Magnon]

Parts of our world are always at war, yet we function.