Is Star Wars just a fantasy world or can we learn some things about personal finance too? As a young lad I was exposed to the original trilogy, watching the movies with every sick day I could force out. Many of the broader subjects, like government corruption escaped my youthful imagination. However in a recent Spike TV marathon, I became aware of all the bits and pieces that really tie the story together. There’s more to the 6 movies (and endless books) than just a few heroes with bright swords.

With that in mind I came up with 6 lessons Star Wars teaches about our relationship with money.

People with money don’t care about value
In Episode IV, Jedi Master Ben Kenobi is in negotiations with Han Solo to arrange travel. Due to the urgency of the situation, money appears to be no object. Han demands 10,000 credits up front. Luke butts in stating they can almost buy their own ship for that price. Ben counters with a 2,000 credit down payment and another 15,000 when they reach their destination. This is 50% more than Han had asked for, which could have purchased a vessel. Surely they overpaid for this service.

The wealthy see value in a different way than the middle and lower class see it. To them, the convenience factor and speed of service achieved is much more important. The end result is they pay more for the same service, but maybe save some time. Many businesses recognize this when catering to the wealthy and alter their service to accommodate. In the banking world, we have special bankers that cater to those with extreme wealth. The rich pay big for these services, but to them its worth it. Its not unheard of for a banker to fly across the country and house sit while a certain politician is overseas with his family.

The government wastes a lot of tax payer dollars on failed projects
In Episode IV we are first introduced to the Death Star. It’s a moon-sized space station capable of travel and destroying entire planets. It held almost 1.2 million people. No doubt an expensive project. It took 20 years to develop and about 2 days to destroy. Despite being built to destroy planets, it only got to take out one. Naturally, as governments do, they built another. This one was 1/3 larger than the first. It was destroyed just as quickly by the rebels, and never took out a planet. Also lost in this battle was the flagship of the Imperial Navy, not a cheap endeavor either. This proved to be the downfall of the Empire. I’m guessing not because the Emperor died during these events, but because the Empire was bankrupt.

So what does our government waste money on? If we can assign a guinea pig to the two biggest economic crises of the last half-century, it would be needless wars. That would be the recession we’re hovering around now and the recession of the 70s. There once was an argument for war stimulating the economy, but that argument only worked when manufacturing was done here in the States. The technological innovations of WWII (nuclear energy being one) are not as substantial today as they once were. There’s also those explorers NASA smashed into Mars around the turn of the century and some failed satellite that costs $1 million a year to store instead of being disassembled. (I couldn’t find documentation for those so if you have some citations please send them and I’ll add.)

Not everyone sees value in your currency
Episode I finds Jedi Master Qui-Gon Jin on a desert planet with a broken ship. This planet is on the far reaches of space, and thus their economic situation is not the same as it is inside the Republic (Star Wars government). In order to fix the ship, the Jedi Master must obtain parts from a local dealer. The only dealer is a gigantic fly/elephant creature named Watto. When Watto inquires into how Qui-Gon will pay for parts, the Jedi responds with a number of “Republic Credits”. Watto says that currency is no good to him.

While our dollar may be suffering compared to other currencies, it carries value in the modern world. Try buying something in rural Afghanistan and it may prove more difficult. The currency is of little importance to them or their local economy. They cannot exchange it for other goods and services easily and therefore will not do business with you. In many rural societies, you must barter in order to obtain the goods or services you need. This makes one question the tangible value of our currency on a philosophical level. Your money is only as good as society sees it. Gates will be as poor as me come Apocalypse.

By gambling and using a tangible item gifted to him, Qui-Gon was able to obtain what he needed.

You can’t count on the government to solve your problems
Episode I is full of little chides and nudges at bureaucratic democracies. In the Star Wars universe, the main body of government is a very large senate. When the evil Trade Federation invades the quiet planet of Naboo, the elected queen comes to the senate to plead for assistance. The senate begins to disagree on the situation and the weak chancellor decides this situation should be discussed further. The queen replies in turn “I was not elected to watch my people suffer and die while you discuss this invasion in a committee!”. The queen returns to her planet to lead a rebellion that sends the Trade Federation packing. She was 14, what were you doing at 14?

Anyway, the point is your government just isn’t going to take care of your situation properly. The social programs started during the Great Depression are all bankrupt bureaucracies now. Your elected officials thought it would be a great idea to print (not give, PRINT) $600 for every citizen to stimulate the economy. Those same folks still have people living in trailers from Katrina, but they don’t object to the billions wasted in Iraq and the luxurious embassy being constructed there.

Don’t rely on the government to fix your problems. They aren’t capable of repairing the economy. If you lost your job, or the economy is in recession, or your mortgage company screwed you, don’t lobby the government to save you. Take matters into you own hands and fix your situation.

You can be a good friend and still make a buck
At the end of Episode IV, the protagonist, Luke Skywalker is in a tight situation. It looks like he’ll be blasted to oblivion inside his spaceship. Flash back to a few hours before and Luke is discussing the coming battle with his new friend, Han Solo. Han is a greedy pirate that just got a huge financial reward after saving a valued member of Luke’s rebel army. Luke wants Han to join him, but the pirate is more concerned with the money than the rebel fight.

Back to the battle. Just as Luke is about to “become one with the force” (die), Han Solo comes out of no where and saves the day. Luke becomes the hero, Han saves his friendship with Luke and still gets his money.

Now this is applicable in the real world too. In college many people drink underage, so they need someone to get the alcohol for them. Often times its another buddy in your dorm with an older friend. A guy in my dorm actually bought the alcohol and re-sold it to the residents. He helped them all have their fun and still made some money on the side. There are plenty of other examples of this type of relationship. I picked alcohol resale because, like Han Solo’s choices in the movies, both were breaking the law to help a friend and make a buck.

Dad doesn’t know best
“I am a Jedi, like my father before me” says Luke Skywalker in Return of the Jedi (Episode VI). While its true his dad was a Jedi, dad’s methods may not have been the best. Luke’s dad is Darth Vader, a ruthless killer and evil Jedi. He hunted down and killed many of his own kind and in a quest for power. On more than one occasion, he attempted to show his son “the ways of the Dark Side” and entice Luke to join him. Needless to say, Vader does not offer the best advice.

The same applies today with our fathers. Depending on your generation, your paternal financial advice will vary. But, needless to say, what worked for you dad won’t work for you. Gone are the days of The Great Depression where Social Security funded retirement. Gone are the days of pensions where you get paid by your employer until you die. You’re on your own, so saving 10% won’t cut it. Keeping your money in savings and CDs won’t cut it. No offense to the dads out there (hey I’ve got one too) but many of you don’t know best when it comes to money.

OK, that was exhausting. As you can see Star Wars is more than just a sci-fi story. It draws inspiration from many great literary works going back to Greek Tragedy. Its too be expected that life lessons find their way into the storyline then. Its also true then that Star Wars is not the first work of fiction to incorporate these lessons. However 2 generations have been raised on the stories of Star Wars, and many of us were first exposed to these lessons in the galaxy far far away.

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics.

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