Capitalism

Capitalism was an economic model used within the galaxy based around private ownership and profit. Institutions and individuals that supported capitalism were known as capitalists.

Description

Capitalism, its supporters known as capitalists, was an economic model used in the galaxy. It dealt with the generation of profit under privately-operated corporations. Capitalist institutions such as the Trade Federation—which stood as an example of corruption and greed-based capitalism—were able to forge monopolies in which they cut out competition, an act regarded as criminal under the capitalist model but which was, nonetheless, still possible if not opposed. The Federation, Techno Union, InterGalactic Banking Clan, Commerce Guild, and Corporate Alliance were considered examples of unbridled capitalism.^[3]

History

Rise of the corporations

In the galaxy, powerful megacorporations such as the Trade Federation and Techno Union arose^[4] with influence over the economy and politics^[5] while smaller companies also tried to make their mark.^[6] Around 162 BBY,^[7] the capitalist^[1] Con Star Mining Corporation arrived on the planet Parnassos^[8] in the Unknown Regions^[9] and began a strip-mining operation, devastating the planet in pursuit of profit. However, a cheaply built^[1] and poorly upkept nuclear reactor ultimately spelt the end for Con Star's presence on the planet; its explosion fully devastated the environment and inspired the company to abandon Parnassos, leaving the population behind.^[8]

Elsewhere in the galaxy, the capitalist Trade Federation, Techno Union, InterGalactic Banking Clan, Commerce Guild, and Corporate Alliance cemented great power for themselves yet still desired greater profits. These companies shaped what wealth and prosperity looked like for the entire galaxy. Four of those companies proved to be vital to the survival of entire star systems away from the Core Worlds, particularly systems in the Outer Rim Territories,^[3] which largely existed outside of the Galactic Republic's jurisdiction.^[10] These companies formed often-criminal monopolies^[3]—such as the Trade Federation, which established a monopoly over Outer Rim shipping and tried to do the same in the Free Trade Zones^[6]—that the exploited systems could not afford to break, lest those systems lose the only organization they found themselves with.^[3] Corruption also grew in the Republic itself. Corporations represented in the Galactic Senate pushed for their own interests while self-interested senators^[11] attempted to profit off their seats in government.^[12][13]

In time, all while they were increasing in power and influence, the Trade Federation, Techno Union, InterGalactic Banking Clan, Commerce Guild, and Corporate Alliance—all of which were targeted and empowered by the Dark Lord of the Sith Darth Sidious, who sought to use these institutions to help overthrow the Republic—allied together in the name of greater profit. At that same time, these companies were growing annoyed by the restrictions the Senate attempted to put on their businesses. Overall, however, the Republic was ineffective against the influence of the major corporations, with entire Supreme Chancellors rising and falling out of power while failing to uphold the promise that they could bring the capitalist alliances into line. Whatever protections the Senate did attempt to enforce were pioneered by Sidious in his alter ego of Senator Sheev Palpatine.^[3] Those Senate actions that did pass generated anger on the part of the corporations, playing into his plans. One particular measure was the taxation of the Free Trade Zones^[10] under Prop 31-814D.^[14]

All the while, pirate attacks against the corporations had led to the Republic giving the galaxy's capitalist alliances permission to use militaries to defend their interests. In total truth, those attacks—and the ineffectiveness of the many Supreme Chancellors who came and passed—came because of the Grand Plan of the Sith to topple the Republic. The paranoia and profit-focus of the corporations led to a reliance on droid armies, pushing the the Trade Federation, Techno Union, InterGalactic Banking Clan, Commerce Guild, and Corporate Alliance further together. The first to directly affected by Sidious' influence was the Trade Federation,^[3] which launched the Invasion of Naboo in 32 BBY^[15] in protest of Prop 31-814D.^[10] However, the incident was also something of a test by the Federation to see how the Republic would respond^[16] and had come at the order of Sidious, who used the incident to arise to the position of Supreme Chancellor.^[10]

The Clone Wars

With the failure of the Naboo Crisis, the Federation's monopoly over the Outer Rim was broken, which helped Eriadu Mining and Shipping to rise in power.^[6] While the Federation would ultimately retain a great deal of power and its Senate seat,^[5] it endured a form of political exile for a time, during which it found allies in its fellow megacorporations and Outer Rim planets.^[17] With the Republic's failure to respond to the Naboo Crisis in any meaningful way, many planets began to cut their own deals with the Federation despite their prior distaste for the organization. At the urging of the megacorporations, star systems began to secede in spirit from the Republic until this separatist movement began in earnest with the Raxus Address^[16] of 24 BBY,^[18] a speech given by the former Jedi Master Dooku that marked the establishment of the breakaway Confederacy of Independent Systems (CIS) and the start of the Separatist Crisis.^[16] Secretly, Dooku was the Sith apprentice of Sidious and was working with his master to lead the galaxy to war to continue the Sith Grand Plan.^[19] Dooku had secretly allied with the Federation and other titans of galactic industry before his address^[16] and, in 22 BBY,^[15] invited them to a business meeting on the planet Geonosis^[20] that also marked the formal establishment of the Confederacy.^[21] That meeting would soon spiral into the First Battle of Geonosis, marking the beginning of the Clone Wars.^[19]

Before the secession, Separatist believers like Tychon Nulvolio had hoped that they would be able to convince their corporate sponsors to obey their interests through the zeal of their populations. In practice, however, the corporations—along with the Confederacy military—stole power from the civilian government. Separatist believers, such as Soujen Vak-Nhalis, believed that the CIS had made a terrible deal that entailed selling itself out to corporate masters, but believers like Vak-Nhalis hoped that the agreement might, one day, prove wise if it led to Separatist victory and independence. All the while, the corporations declared neutrality in the war^[22] so as to engage in war profiting by selling their services to both the Republic and Confederacy.^[20] However, the companies actively lifted up and supported the Separatist cause, with their allegiance to the CIS little more than an open secret^[22] by the war's end.^[14] The corporations supplied their droid armies to the Separatist cause^[19] and purchased the loyalty of entire planets.^[22]

Imperial Era

At the end of the Clone Wars, the CIS was defeated while the Republic was transformed into the Galactic Empire by the victorious Sidious. As Palpatine, he maintained an image of political populism, in which he compared successful business people to criminals and, seemingly, cracked down on corporations. In reality, however, Palpatine's policies were kleptocratic and involved a rearranging of wealth into the hands of those who he wanted to hold it. Successful businessmen like Arvik Cornade, despite Palpatine's public statements, were set to profit under his new empire, as was noticed by Senator Bail Prestor Organa. Meanwhile, the corporations that had supported the Separatists dropped their sponsorship of the defeated CIS and begged for forgiveness from the Empire in order to continue operating.^[22] While the Trade Federation^[23] and Techno Union were nationalized^[24] despite their efforts to surrender,^[22] most of the companies that had supported the Separatist armed forces were allowed to continue into the new Imperial Era^[25] and continued to look for ways to influence affairs to their ends.^[26]

For all of Palpatine's populist rhetoric,^[22] it was the wealthy and a number of corporations that profited during Palpatine's rule,^[17] just as Organa had predicted.^[22] Overall, the Empire made it a policy to be kind to the galaxy's wealthy, keeping them comfortable.^[27] Such was done at the expense of the galaxy's average workers, particularly those in the Outer Rim,^[17] such as the Scrapper Guild employees of the planet Bracca. Once a planet of great engineers, the guild employees were given lesser pay and worked under more demanding conditions during Imperial rule.^[28] The exploitation of average workers allowed for the uplifting of the Imperial government and the wealthy, particularly those in the Core Worlds. In return for continued preferential treatment, companies and wealthy figures would effectively sponsor the Imperial project, funding new starships in the Imperial Navy and supporting the advancement of promising officers.^[17] The wealthy also mingled with Imperial officers at parties while average working citizens on the other side of the galaxy lived in fear.^[29]

However, the Empire also made sure to establish a fear of total nationalization under the Imperialization process; should such an act be seen as supportive of the Imperial project or deployed to punish anti-Imperial actors, Imperial officials had the right to nationalize private interests. As such, a fear of nationalization spread across the business community, whose members willingly partnered with the Empire and brutally enforced Imperial policy so as to maintain a positive relationship with the state. While the historian Beaumont Kin theorized the Empire desired total control of the economy in due time, Imperial officials took great joy in watching business interests willing give into Imperial demands so as to maintain their independence.^[17] Meanwhile, the average people of the galaxy were left in a state that left them struggling^[30] by 9 BBY.^[31] In response, Imperial propaganda worked to create the image of a far more successful society than that which actually existed, hoping to cover up the economic realities of Imperial rule. Senator Daho Sejan would claim in a recorded speech that terrorists hiding amongst the population were those at fault for the difficulties of everyday life.^[30]

New Republic Era

Wealthy figures who spent time on Canto Bight profited off the emerging First Order by selling it arms.^[32] Engaging in outright war profiteering, many of the wealthiest on Canto Bight also took to selling arms to the Resistance to profit off both sides. After the First Order-Resistance War, Beaumont Kin took notice in his historical book The Rise and Fall of the Galactic Empire of how the Empire had interacted with the economy and how wealthy figures from before the Galactic Civil War had used their money to escape consequence.^[17]

Behind the scenes

Capitalism is a real world economic model^[34] that was first referenced within Star Wars canon in the short story "Black Spire: Return to a Shattered Planet^[1] before being outright identified in the encyclopedia "Prologue to the Clone Wars and the First Battle of Geonosis."^[3] Previously, capitalism was outright mentioned within the script for^[33] the 2002 film^[19] Star Wars: Episode II Attack of the Clones by George Lucas and Jonathan Hales; dated July 4, 2000, the script saw Count Dooku promise the corporate leaders of the Separatist Council that his Confederacy of Independent Systems would have an "absolute commitment to capitalism" that would "bring [them] profits beyond [their] wildest imagination." Specifically, Dooku stated the corporations would enjoy lower taxes, reduced tariffs, and, in due time, the abolition of trade barriers of any kind.^[33]

While this quote was not featured in the final scene,^[35] it was retained in the film's novelization by R. A. Salvatore.^[35] The novelization was released on April 23, 2002, several weeks before the film's own debut on May 16.^[36] The line also retained in the film's Mighty Chronicles adaptation by John Whitman^[37] released on that same April 23^[38] and the third issue of the film's comic book adaption by Henry Gilroy,^[39] which was released on May 1, 2002.^[40] All of these adaptions now fall into the Star Wars Legends continuity.^[41] Capitalism continued to outright mentioned throughout various Legends works.^[42][43]

In both Legends^[44] and canon, the flagship of General Grievous is identified as the Invisible Hand,^[25] a name it shares with the capitalist theory of an "invisible hand" of the market, as pioneered by economist Adam Smith.^[34] In 2025, author Matthew Stover revealed he came up with the name Invisible Hand for the warship as "sort of an inside joke." To Stover, the name reflects both Palpatine's role as the secret puppet master of the Clone Wars and also stands "as a subtle dig at the conservatives who idolize Adam Smith." According to Stover, he made that point to compare the Trade Federation to the robber barons of real world history, whom he wrote the Trade Federation officials "are so clearly modeled on."^[44]

Appearances

• "Black Spire: Return to a Shattered Planet" — Galaxy's Edge: Black Spire (First mentioned)

Sources

• "Prologue to the Clone Wars and the First Battle of Geonosis" — Star Wars Encyclopedia (First identified as capitalism)

Notes and references

External links

• Capitalism on Wikipedia