This weekend, my much better half had the great idea to suggest that we watch one of the episodes of the Star Wars trilogy. Since she was new to Star Wars, I proposed to start with the Phantom Menace. While watching, I was really surprised at how George Lucas created a story from nothing.
Basically, since 60% of the movie happens on Tatooine because nobody will accept Qui-Gon’s credits (republic dataries) because the Republic has no reach in that sector. This got me thinking: isn’t there any foreign exchange markets? The storyline is set in a galaxy of thousands of star systems whose economies all seem to be well-integrated through interplanetary trade and instantaneous communications across light years, but George Lucas is telling there is no foreign exchange markets? I mean, I can buy Zimbabwe’s currency for US dollars, but George Lucas can’t have a jedi master sell Dataries for whatever currency of choice?
Tatooine is a developping economy by the looks of it and one which is rife with criminality. In the movie, we hear about another currency while Jar Jar Binks (George Lucas’ worst creation) steals a piece of meat from the market : the wuipiupi. It seems that most exchanges occur in that currency. I googled that currency’s name with references to Star Wars and it only seems to be used only onTatooine – in the Phantom Menace and A New Hope. By all standards, it is not a popular currency. Developing economies have a tendency to demand more foreign currency deposits than developped economies, notably because the currencies of developing economies are less stable. The lack of credibility of these currencies is often the main issue (see here). Moreover, criminals like Jabba the Hutt would tend to have their assets denominated in a safer and more stable currency than the Wuipiupi. All of this explains why I was stunned that there were no foreign exchange market or at least, no black market for foreign exchange (whose absence, given the criminality on Tatooine, is even more surprising).
Basically, the Phantom Menace movie would have been 55 minutes shorter if markets had existed, we would have been spared 55 minutes of Jar Jar Binks and the story could have focused on another way to introduce Anakin to us.
UPDATE : I’ve discovered something which makes EP1 even worst in terms of credibility. According to Wookiepedia, the Wuipiupi was actually pegged to Galactic credits at 0.65 wuipiupi per credit. If you peg a country’s currency to another currency, it is virtually impossible not to have any forms of black market for foreign currencies – especially the peg does not reflect economic fundamentals.
UPDATE 2 (a comment by Frédéric Boiteau): If Tattoine had a foreign currency exchange market, they wouldn’t have met Anakin and Palpatine would have remained a no-name senator from a backwater planet that would eventually have been investigated after the crippling embargo of the Trade Federation had caused enough economic damage. It would have been discovered that he used his office of secretly fund the Trade Federation and instigate the conflict on Naboo. The Jedi, having been sent there to try and force a resolution, would be involved in the investigation and likely discover Palpatine was actually hiding his true identity as Darth Sidious. He would have then been killed by the Jedi, and the Old Republic would have remained. With Sidous’ plot foiled, the entire conflict leading to the Clone Wars would have been avoided, with Count Dokuu going into hiding and biding his time until he could find a new appentice and remain in hiding…