How Star Wars can teach us about the economy

Jedi elder Yoda from Star Wars. Photo: starwars.com

Star Wars can teach us about the economy or as Yoda might say, ‘about economics, it can teach’, writes JOHN HAWKINS. 

Economists may sometimes sound like they are speaking a language out of this world. But perhaps there are lessons about economics from a galaxy far, far away.

The Star Wars saga – the science fiction trilogy of trilogies that spun out of the original 1977 movie – tells the tale of a small group of rebels, led by the brave and wise Jedi Knights, who fight against a corrupt empire.

The films earned more than US$10 billion at the box office. Then there were profits from cartoons, comics, books, and even more from toys.

Legal scholar Cass Sunstein, best known as the coauthor of Nudge: improving decisions about health, wealth and happiness, estimated that since 1977 the Star Wars franchise has generated as much in earnings as the gross domestic product of entire countries such as Iceland and Jamaica.

This stellar performance is based on stories that themselves contain some economics lessons, on topics such as trade, money, automation, forecasting, cost-benefit studies and behavioural economics.

As the Jedi elder Yoda would put it, “about economics, it can teach”.

Digital currency vs precious metals

The federation, however, suffered from the lack of a common currency. Galactic credits, a digital currency, are the most commonly used and there are also planetary credits and dataries (Republic credits). But the credits lacked credibility. Han would only accept payment in precious metals.

Some planets, such as the young Jedi Rey’s homeworld of Jakku, use barter rather than any currency. Notably these tend to be poorer planets.

Another impediment to trade is trust, in the absence of respected legal systems. Han offered to take the heroes Luke Skywalker and his Jedi Master Obi-Wan Kenobi to the planet Alderaan for 10,000 credits. The agreement was instead 2,000 immediately plus 15,000 on arrival. Obi-Wan wanted to align Han’s incentives better.

These examples illustrate the conclusions from economic studies that have shown having a common trusted currency encourages trade. It is the economic motive for the euro project, that introduced a common currency to the European Union.

Galactic trade wars

The galactic federation in Star Wars has been estimated to have a gross galactic product of between five sextillion and 200 Octillion US dollars. Much of this wealth is generated from interplanetary trade.

Indeed, the star wars started from an interplanetary trade dispute.
Interplanetary trade seems based on the resources each planet has in abundance, which may be some minerals or cheap labour.

Galactic trade is conducted by corporations but also by smugglers like Han and Chewbacca.

There is a lesson here, both about the gains from trade and the risks of starting trade wars, which incoming US President Donald Trump should heed. If other countries retaliate against the large tariffs he is proposing, global trade may contract significantly. This will make the world poorer.

The automated workplace

The federation relies on droids for much of its work. The droids take the place of humanoids in an example of capital/labour substitution. And the droids specialise in different tasks, showing the division of “labour”.

Once the relatively peaceful federation splits into an empire and republic, military expenditure becomes very large. The massive planet-destroying Death Star demonstrates the empire devotes huge amounts of resources to it.

This could explain the apparent paradox of an economy with both highly advanced technology but much apparent poverty. While there are droids there are also manual workers in drudgery.

The impact of automation, even if we have not yet got as far as humanlike droids such as C-3PO being commonplace, is an issue in our world too. Economists are asking how will it affect jobs and incomes.

Cost-benefit analysis

The characters are sometimes faced with decisions requiring a cost-benefit analysis in uncertain times. Cost-benefit analyses usually involves comparing future benefits with immediate costs.

The droid robot C-3PO must decide whether to risk losing his memory to translate an important message. His droid friend R2D2 wants to beat the ape-like wookie Chewbacca at a kind of chess. But when Han warns of wookies’ temper, C-3PO’s wise advice to his fellow droid is “let the wookie win”.

Luke calculates the short-run costs of some further education will be exceeded by the longer-term benefits. He hopes to increase his human capital by attending the flight academy. But his uncle prioritises helping with the harvest. Later he seeks training in the “force”, from the initially reluctant Jedi master, Yoda.

Cost-benefit analysis is used by economists advising a company on whether to build a factory or a government on whether to build a railway.

The concept of opportunity cost is illustrated when Luke must decide whether to go to Alderaan with Obi-Wan. Initially he declines as he does not want to leave his aunt and uncle. But when he learns of their murder, the cost of going with Obi-Wan is much reduced.

The famous bar scene illustrates search costs. Obi-Wan and Luke go there because it has a concentration of potential pilots.

The concept of search costs is used by economists to answer questions such as how long a person should keep searching for a job, or a romantic partner, before “settling”.

Negotiating

Negotiation is illustrated when Princess Leia negotiates with Jabba for Chewbacca’s release. Neither the original offer of 25,000 credits nor the asking price of 50,000 are acceptable but they reach an agreement on 35,000.

Another negotiation in which Leia is involved is when the evil Governor Tarkin offers her the choice of revealing the location of the rebel forces or watching her home planet of Alderaan destroyed.

But as it is not a repeated game, Tarkin is not concerned about his credibility and breaks his word. Even after Leia tells him (inaccurately) the location of the rebels, he still orders the planet’s destruction.

These aspects of game theory are widely used by economists in situations where outcomes are affected by how rivals respond. An example is a firm in an industry with a small number of rivals. The impact of cutting price will depend on how the rivals respond..

John Hawkins, Senior Lecturer, Canberra School of Politics, Economics and Society, University of Canberra. Republished from The Conversation, via Canberra City News, December 31, 2024.

Jewel raid victims offer up to £1.5m in rewards

A bracelet or ring, which appears to be diamond encrusted with an emerald, was among the items taken, which total £10.4m

By Aurelia Foster

The victims of a recent £10m jewellery raid on a London mansion have offered rewards totalling £1.5m to help catch the thief and recover their stolen items.

Some of the jewellery stolen from the house on exclusive Avenue Road, near Primrose Hill, is reported to belong to Shafira Huang.

As well as a £500,000 reward for information leading to the arrest and conviction of the thief, the house owners are offering 10% of the value of any recovered jewellery for information that leads to its retrieval - which could total as much as £1.5m, the Metropolitan Police confirmed.

A spokesperson for the family told the Metro they believed the heist on 7 December was a "pre-planned professional job".

"Everyone is OK, but only by 63 seconds a member of staff would have been in direct confrontation with the robber had they entered the room slightly earlier," the spokesperson said.

"I can categorically say that all windows in the house were closed."

The spokesperson added: "They are an absolutely lovely family. Time is a great healer but obviously it's a shock."

Among the items taken, totalling £10.4m, were distinctive pieces such as two De Beers butterfly diamond rings, pink sapphire earrings shaped like butterflies from Katherine Wang, and a gold, diamond and sapphire Van Cleef necklace.

In addition to the jewellery, £150,000 of designer handbags and £5,000 in cash were stolen in the raid.

Many of the missing items are unique in their design, and therefore easily identifiable, the Met Police said.

First published at BBC News, December 31, 2024

Thugs beat up Opera Conductor in the heart of Europe

By Norman Lebrecht

The atmosphere in the Serb capital Belgrade just turned uglier.

Early this month, a car drove into a group of Belgrade Philharmonic musicians who were protesting at Government indifference towards victims of a railway disaster.

Now the opera orchestra is involved. Here’s what we are told by the musicians:

‘The orchestra of the National Theater in Belgrade announced that two incidents occurred after the opera “Cinderella”, and in one of them the conductor of the orchestra was attacked in front of her young daughter.

‘On Friday at the National Theatre, immediately after the performance of ‘Cinderella’, two serious incidents took place that violated the safety and dignity of our team. In one of them, our conductor was verbally and physically attacked in front of her minor daughter and was transported to the Emergency Centre due to her injuries. The attackers are people who had a history of violent behaviour…

‘The conductor Ana Zorana Brajović came out to bow in front of the audience with a red glove on her hand. Spectators also noticed that Cinderella, played by Ljubica Vraneš, a member of parliament from the SNS, refused to take her hand and bow to the audience.’

UPDATE: The National Theatre just confirmed the identity of attacker. He is the son of a prominent member of Vučić’s party.

First published at Slippedisc, December 30, 2024

All the music, TV, film, art and more to get excited about in 2025

Whether you want to know about some of the coming year's biggest gigs and festivals, or which books, films and TV shows are coming out, there should be something here for everyone.

You can also discover 2025's key fashion trends, plus which theatre is reimagining Wayne and Coleen Rooney as mythical heroes - and why a giant spider is returning to London.

Music

Here they tautologically come, slowly walking down the hall, faster than a cannonball.

Yes, spectacular squabbling siblings Oasis are back after their 15-year huff, ready to go Supersonic all over again.

The much-anticipated tour rocks into Cardiff's Principality Stadium on 4 July, and is set to be the comeback of the year.

And a new generation of stars are stepping up to stadium headliner status. Dua Lipa and Lana Del Rey will sashay into Wembley and Anfield this summer; while K-Pop band Stray Kids have booked two nights at Tottenham Hotspur Stadium.

Festival bills are getting a long overdue shake-up, too. Spain's Primavera has pulled a blinder, booking three of pop's biggest wavemakers - Charli XCX, Sabrina Carpenter and Chappell Roan.

Roan will also headline Reading and leads, while her friend and collaborator Olivia Rodrigo has booked her first headline slot at London's BST festival in Hyde Park, and Fontaines DC have a massive show at London's Finsbury Park in July (the announcement Video is a must see).

First published at BBC News, December 31, 2024.

Read full article here.

Tomorrow arrives, but it’s a (mostly) different world

Australia’s first International Women’s Day march was held in Melbourne in 1975… What the authors didn’t get right was the impact of the internet, climate change, renewable energies and the role of women in society.
Photo: National Archives of Australia

Book reviewer COLIN STEELE recently came across a secondhand copy of a book published in pre-internet 1975 in which 15 “leading Australians” forecast how the country would look in 2025. How close did they get?

In 1975 “fifteen leading Australians”, nearly all male, were commissioned to write chapters for Australia 2025, a book in which they envisaged how Australia would look in 2025.

It was published in Melbourne by Electrolux Pty Ltd, then at the height of its Australian workforce. A sign of the times came in 2016 when the Swedish owners closed its Australian factory in Orange. Refrigerators could now be made more cost effectively overseas, particularly in South-East Asia and Eastern Europe.

What the authors didn’t get right was the impact of the internet, both technologically and socially, climate change, renewable energies and the role of women in society, with several authors commenting on what “man” would be doing in 2025.

Colin Steele.

The extent of globalisation and free trade and the rise of inequality was not envisaged in the chapters on the global economy and trading futures, nor the rise of China.

John Bronner, the chief economist for BHP, foresaw an annual 5 per cent growth rate in Australia, while Sir Charles Court, in his chapter, saw Australia as a major industrial power in 2025.

BHP’s Sir Ian McClennan (thankfully, knighthood honours were later phased out) predicted a continued major reliance on fossil fuels and the belief that nuclear energy would be the principal energy source and available to produce significant power in Australia by 1990. A reality check for 2025 predictions?

Sir Peter Abeles also saw “nuclear power as proof of man’s ability to harness the forces of nature” but also wondered whether solar energy could be harnessed and that electric cars could be developed. His prediction of vertical takeoff aircraft, airships and wind-driven ships has been less realised.

Melbourne University historian Dr Lloyd Robson, who died in 1990, in his introductory overview, gets quite a few things right –“the pastoral industry in 2025 will be controlled by fewer and fewer people and interest groups”. His low prediction of 20 million people by 2025 missed the subsequent mass migrations, although he does forecast Asian immigration – “exotic newcomers”. He writes: “It would be greatly helped if such immigrants were lower middle class and hence adhering to some of the Australian values.”

A long-term prediction by Robson was that authoritarian governments will emerge in Australia coinciding with a move to the political right by 2025. Dutton, anyone? He writes: “While they have coins to jingle in their pockets, the Australian people will not care who runs the country”. Will “It’s the economy stupid scenario” prevail in 2025?

Overly optimistic was his view that “vastly improved public transport systems to alleviate the expansion of the suburbs” would occur. In Robson’s 1975 Australia, “where the male still feels the need to express his masculinity”, he credits the unisex trend of fashion as a future factor for change rather than the extrapolation of the activities of the Women’s Electoral Lobby.

He saw Australia’s indigenous community as “being treated as equals by some European Australians”. The chapter entitled “Aborigines” by then Senator Neville Bonner simply concludes by asking for “a fair-go”. Closing the gap still has a long way to go.

Australia Post’s Eber Lane seems to have taken the year 2000 as a benchmark and largely misses out on the scale of the telecommunication revolution, although he is spot on when he warns against “the potential of integrated communications for authoritarian manipulation and control of society”.

Prominent arts advisor, Jean Battersby, who saw the cost of the “computer in the home” as probably costing about “as much as the average family car”, predicts successfully the impact on leisure in terms of Kindle-type book access and the delivery of online services. She warns, however, in that process we may see “our children and grandchildren all turned into bland, passive, wide-eyed nincompoops, drugged by the unimagined excesses of long exposure” to streaming media.

The chapter, “The Australian Home”, by Sir Roy Grounds argues there would be a continuous reduction of the number of multi-storey flats for family occupancy and “many by 2025 will be demolished and replaced by open, landscaped spaces, some of which will be allocated at low rental for individual or family group – used to produce fresh vegetables – because the cost of labour for the production of fresh foods will be beyond the economic means of the average Australian”. Wrong and right!

David Scott, president of the Australian Council of Social Service also presents a rather utopian outlook in his chapter “Social Welfare”, although concluding that this will only be achieved if we are not impacted “by the narrow self-interest of minority groups having excessive power over decisions and communications”.

Making predictions is always difficult, but the relative stability of the last 50 years, despite several economic and military crises, has enabled some of the commentators to be reasonably accurate. Those who wish to predict what will happen by 2075 will have a much more difficult task given present global scenarios.

First published at Canberra City News, December 31, 2024

UK honours for Stephen Fry and Carey Mulligan

Stephen Fry was knighted for his work raising awareness about mental health and the environment.
(EPA PHOTO)

By Brian Melley in London

Actors Carey Mulligan and Stephen Fry and author Kazuo Ishiguro have received awards in the UK’s New Year Honours celebrating artists, athletes, politicians and others who make notable contributions to British society.

Mulligan, a winner of a British Academy of Film and Television Arts award for An Education and a three-time Oscar nominee, was made a Commander of the Order of the British Empire for her services to drama.

Comedian, actor, broadcaster and writer Fry was knighted along with England’s former soccer manager Gareth Southgate and London mayor Sadiq Khan.

More than 1200 people across the UK were honoured in the awards — with most going to those whose activities happen outside the spotlight.

“Each and every day, ordinary people go out and do extraordinary things for their communities,” Prime Minister Keir Starmer said. “They represent the very best of the UK… The New Year Honours List celebrates more of these unsung heroes, and I thank them for their incredible contribution.”

The awards given out by monarchs as part of orders of chivalry since the Middle Ages are now vetted by a government committee before being passed on to the prime minister and King Charles III.

Fry said he was “startled and enchanted” to receive the honour for his work raising awareness about mental health and the environment. The author of several books in addition to his screen work, he is also president of the mental health charity Mind and supporter of the conservation group Fauna and Flora International.

Nobel Prize-winning novelist Ishiguro, who wrote The Remains of the Day and was previously knighted, was made a Companion of honour for literature.

Three-time London mayor and the son of a bus driver who grew up in public housing and was previously elected to Parliament, Khan said he was “truly humbled” by the honour.

Khan has infuriated some motorists by expanding a policy that taxes drivers of higher-polluting vehicles and was the subject of a petition by a Conservative counciller opposing his knighthood that gathered 200,000 signatures this month.

In addition to Southgate, who led the Three Lions to the finals of Euro 2020 and 2024, and the semi-final of the 2018 World Cup, several athletes were recognised, particularly for Olympic successes.

Keely Hodgkinson, who won the gold medal in the 800 metre track race in Paris, and Dina Asher-Smith, a three-time Olympic medallist who was the 200 metre world champion in 2019, were honoured as Members of the Order of the British Empire, or MBE.

Two-time Olympic mountain bike champ Tom Pidcock, who has also been cyclocross world champ and won major road cycling races, was made an Officer of the Order of the British Empire, or OBE.

The youngest recipients were Mikayla Beames, who was awarded a British Empire Medal (BEM) for raising money for children with cancer, and swimmer William Ellard, two-time Paralympic gold medallist, made an MBE. Both are 18.

The oldest person was Colin Bell, 103, a World War II pilot awarded a BEM for public speaking and raising money for charity.

First published by Australian Associated Press, via Canberra City News, December 31, 2024

Jimmy Carter, former US president, dies aged 100

Jimmy Carter. (Photo courtesy The White House)

By Anthony Lurcher and Tom Geoghegan

Former US President Jimmy Carter has died aged 100, the centre he founded has confirmed.

The former peanut farmer lived longer than any president in history and celebrated his 100th birthday in October.

The Carter Center, which advocates for democracy and human rights around the world, said he died on Sunday afternoon at his home in Plains, Georgia.

The Democrat served as president from 1977 to 1981, a period beset by economic and diplomatic crises.

After leaving the White House with low approval ratings, his reputation was restored through humanitarian work which earned him the Nobel Peace Prize.

"My father was a hero, not only to me but to everyone who believes in peace, human rights, and unselfish love," his son, Chip Carter, said in a statement.

"The world is our family because of the way he brought people together, and we thank you for honouring his memory by continuing to live these shared beliefs."

Carter - who prior to becoming president was governor of Georgia, a lieutenant in the US navy and a farmer - is survived by his four children, 11 grandchildren and 14 great-grandchildren.

His wife, Rosalynn, who he was married to for 77 years, died in November 2023.

Since 2018 and the death of George HW Bush, he was the oldest surviving US president.

Carter and his wife Rosalynn

Carter stopped medical treatment for an undisclosed illness last year and instead began receiving hospice care at his home.

President Joe Biden and First Lady Jill Biden said the world had "lost an extraordinary leader, statesman and humanitarian".

Describing him as "a dear friend" and "a man of principle, faith and humility", they added: "He showed that we are a great nation because we are a good people – decent and honorable, courageous and compassionate, humble and strong."

"The challenges Jimmy faced as president came at a pivotal time for our country and he did everything in his power to improve the lives of all Americans," President-elect Donald Trump wrote on social media.

"For that, we all owe him a debt of gratitude."

Carter's presidency will be remembered for his struggles in dealing with acute economic problems and several foreign policy challenges, including the Iran hostage crisis, which ended with the deaths of eight Americans.

There was, however, a notable foreign policy triumph in the Middle East when he helped broker an accord between Egypt and Israel, signed at Camp David in the US in 1978.

Carter teamed up with Nelson Mandela to found The Elders human rights group

But that seemed a distant memory two years later, when voters overwhelmingly chose Republican Ronald Reagan, who had portrayed the president as a weak leader unable to deal with inflation and interest rates at near record highs.

Carter lost the 1980 election by a landslide, winning only six US states plus Washington DC.

In the aftermath of such a heavy defeat, Carter was frequently held up by Republicans as an example of liberal ineptitude.

Meanwhile, many in his own party either ignored him or viewed his presidential shortcomings as evidence their brand of Democratic politics or policy was a better way.

Today many on the right still deride the Carter years but as the decades passed, his humanitarian efforts and simple lifestyle began to shape a new legacy for many Americans.

After leaving the White House, he became the first and only president to return full-time to the house he lived in before politics - a humble, two-bedroom ranch-style home.

He chose not to pursue the lucrative after-dinner speeches and publishing deals awaiting most former presidents, telling the Washington Post in 2018 that he never really wanted to be rich.

Instead, he spent his remaining years trying to address global problems of inequality and disease.

He also teamed up with Nelson Mandela to found The Elders, a group of global leaders who committed themselves to work on peace and human rights.

In accepting his Nobel prize in 2002 - only the third US president to receive it - he said: "The most serious and universal problem is the growing chasm between the richest and the poorest people on Earth."

In a statement, former President Bill Clinton and wife Hillary Clinton said he "worked tirelessly for a better, fairer world", noting his humanitarian, environmental and diplomatic efforts.

"Guided by faith, President Carter lived to serve others - until the very end," they added.

Former President Barack Obama paid tribute to Carter's "decency" and said "he taught all of us what it means to live a life of grace, dignity, justice, and service".

Republican former President George W Bush, meanwhile, said Carter "dignified the office" and that "his efforts to leave behind a better world didn't end with the presidency".

President Biden said a state funeral would be held in Washington DC.

First published at BBC News, December 29, 2024