Financing the Rebel Alliance: Start-up Funding in a Galaxy Far, Far Away

Originally Published by The Capterra Finance Software Blog

Fighting the Empire couldn’t have been cheap. Defending Hoth from the Empire’s ground invasion alone cost the rebels laser cannons, airspeeders, and a whole base, replete with shield generator, barracks, and other support technology in The Empire Strikes Back.

How in the name of Tyth — yeah, that’s a Star Wars god — did the rebels keep buying new kit?

At Capterra, we usually focus on how small businesses do things, but this one was just too tempting for me to pass up. Besides, even if you’re just trying to get yourNetflix controlling sock business off the ground, it’s important to understand how financing works.

While Big Bad Government taxes people to fund fighting, that’s often not an option for the guys hiding out in the woods, hoping to overthrow the status quo. To figure it all out, we’ll look at how an actual rebellion was financed.

For most of history, rebels have funded themselves with money from:

1. Other governments

2. Wealthy sympathizers

3. Just stealing stuff

For the budding historian (me), the Spanish Civil War presents an excellent example of rebel funding. In fact, the more I looked into it, the more the entire Star Wars canon seemed to be ripped from the headlines of 1930s Spain. Thanks, History.

Setting the scene

In Star Wars, the Rebel Alliance is fighting against the Galactic Empire, hoping to stop its destruction and oppression from tearing the galaxy apart. In the Spanish Civil War, the fascists rose up in a fight against the “oppression” of a democratically elected government.

It’s a little less romantic.

Now, every rebellion story needs its hero. Star Wars has Luke Skywalker and the Spanish Revolution had Franco. The problem there is that Franco was a fascist who allied himself with Hitler and Mussolini. So instead we’ll rely on Eric Blair, better known as George Orwell.

While Skywalker fights the Empire for most of his adult life, Orwell fought fascism for about six months. On the morning of May 20, 1937, he was standing on a parapet in near the front line. As he spoke to some of his comrades, a sniper shot him through the throat.

As he fell, his head ricocheting off the ground, I doubt Orwell took much time to reflect on the funding of the war in which he fought. But even though a bullet costs something like $0.25, that single cost can determine life and death.

The Republic was, according to Orwell, poorly equipped. “[The] shortage of rifles was so desperate that fresh troops reaching the front always had to take their rifles from the troops they relieved in the line. In the whole of the Lenin Barracks there were, I believe, no rifles except those used by the sentries,” he wrote in Homage to Catalonia.

It’s a slightly different scene in Star Wars where the good guys never seem to be in short supply of spare speeder parts, ammunition, or transportation. The closest we get to seeing the poverty of war may come in the scenes onboard the Millennium Falcon, which looks like it’s held together with duct tape and hope.

The foundation of the rebellions

On the Rebellion side of the Spanish war, Franco initially relied on funds from Juan March. March was loyal to the Spanish monarchy, which had been replaced by the Republic in 1931 when King Alfonso XIII left the country. For most of the previous decade, Spain had been governed by a military dictatorship with support from the king.

When the Republic was formed, March was imprisoned for his illegal business practices. He escaped and fled to Gibraltar, where he plotted to bring down the Republic. March funded Franco’s return to Spain, and paid to hire and move troops into Spain.

In the Star Wars galaxy, the Rebel Alliance found similar origins in the wealthy and powerful. Considered one of the founders of the Alliance, Leia’s adoptive father Bail Organa plays a large role in the organization and funding of the movement.

As the senator from Alderaan, Organa makes many friends in both the Galactic Senate and the Jedi Order. When the Republic finally falls and the Empire rises to power, Organa’s friends and allies begin to suffer. Together with other leaders from Chandrila and Corellia, he starts to funnel resources to the fledgling rebels.

Early in the movement’s history, the group takes on smaller actions. As the need for a unified front grows, Organa begins working with a loose collective of leaders until the Corellian Treaty — which formally creates the Alliance — is signed.

Expanding hostilities

By the time Orwell went down, the war had spread as Franco and the fascists advanced. “By the summer of 1937 Franco was controlling a larger population than the Government — much larger, if one counts in the colonies — with about the same number of troops,” Orwell wrote.

Both Franco and the Republic were hard up for weapons, in addition to their growing need for cash. Help was hard to come by, though, as twenty-four countries had banded together to sign a non-intervention agreement in hopes of preventing another world war.

Luckily for the Republic, the Soviet Union didn’t seem to care much about its own signature, sending supplies and money to Spain on a regular basis. In a parallel — and completely uncharacteristic — move Hitler’s Germany and Mussolini’s Italy reneged on their promises not to intervene, supplying Franco with all the guns, money, and credit he could hope for.

As Franco borrowed more money from France and Germany, his forces gradually took over more areas rich in natural resources. Both sides also dipped heavily into the old confiscation playbook, according to a paper out of the University of Alcalá.

Just as Spain tried to work with other nations to limit Franco’s access to guns and money, the Empire’s vast resources make it difficult for the Rebellion to arm itself. While there’s no direct evidence of how sympathetic leaders fund the Rebellion, we can make some educated guesses based on our real-life example.

As an early leader in the struggle, it’s likely that the coffers of Alderaan are heavily tapped by the Organa family in support of the cause.

While it was still around, Alderaan was a hub of high culture, exporting spices, wine, and other luxuries to the rest of the galaxy. That gave it plenty of resources to spend on supporting the rebels, especially as its own military was so small.

While Alderaan is destroyed in Star Wars IV, it seems likely that Leia must still have access to at least some of the planet’s financial resources, allowing her to continue the Organa family’s support of the Rebellion.

Currency in the Star Wars galaxy

Just because you have money, doesn’t mean you can easily buy stuff. Even in an intergalactic economy like Star Wars, there’s a need for currency.

In the real world, the Spanish Civil War demanded huge inflows of currency. While guns and supplies could be purchased outside of the country using gold or other non-cash means, housing, food, repairs, and salaries had to be paid for with cash.

Franco met his needs through loans from his allies and by confiscating the property of his enemies. Once he had his external credit, he could print his own currency for use in fascist-supporting areas. In 1937, the rebels decided they should have their own currency to compete with the existing government coins. The rebels began minting competing coins in Vienna, “featuring a rising sun and a clutch of arrows.”

The Spanish Republic, on the other hand, was not so lucky in its borrowing. Instead, the government shipped gold to Moscow and Paris, which the Soviet and French governments then converted to currency to finance Spain’s operations.

The Spanish Republic started issuing currency in 1934, after the fall of the monarchy. These pesetas were the currency of government supporters and troops.

In Star Wars, both the Empire and the Rebellion issue credits — the Star Wars’ term for basic currency — to their supporters. These range in value depending on where you are trying to use them, much as the local currencies in Spain did in the 1930s.

The divide between the currencies of the Rebel Alliance and the Empire is less stark, as it’s set against a backdrop of thousands of local and regional currencies. While the average Spaniard may have had only three or four choices — there were local currencies at the time — a galactic citizen can choose from dozens of options.

That gives the Alliance a broader selection of options for dealing with local manufacturers, laborers, and organizations. While Franco was stuck with the currency he had on hand, the Alliance has more flexibility in its purchases, assuming it has access to an exchange.

You may remember Qui-Gon Jinn running into exchange issues when he visits Tatooine. Watto is unwilling to accept the Jedi’s Republic credits for parts, leading to an incredibly convoluted bet over podracing — commonly referred to as aMacGuffin.

Luckily for the rebels, the InterGalactic Banking Clan founded an InterGalactic Currency Exchange System. Sure, why not?

Leaders on both sides of the Spanish Civil War were able to avoid this sort of nonsense by implementing strict exchange systems and controls. As it turns out, locking down the financial system of 1930s Spain is more straightforward than doing the same thing in a galaxy far, far away.

Cracking the galactic bank vault

So we have a handful of powerful leaders and families channeling money across the galaxy to the Rebel Alliance. That money, due to its varied sources, is coming in plenty of different currencies. That gives the rebels a nice nest egg of local currencies to tap into when it needs to make a purchase. The final piece in all this is finding a mattress big enough to shove all these creds under.

Banks don’t get a lot of love in the Star Wars galaxy. The InterGalactic Banking Clan seems to run almost all of the major financial institutions. But the group also seems to be a poor chooser of sides, and after the Clone Wars ends, the banks it manages are nationalized.

Other, smaller banks exist in further-flung regions of the galaxy, and serve a more localized customer base. On the Empire’s side, there’s a host of banks that manage specific portions of the government’s operations.

While there has been some mention of a Jedi aligned bank, there is little detail around where the Rebel Alliance holds its reserves.

In reality, some sort of centralized bank is the only plausible system — there’s no mention of Bitcoin in Star Wars. The money in that bank then needs to be accessed locally by leaders, generals, or other Alliance members.

Hyperspace bank transfers

That entails some sort of clearinghouse, which would vet transactions and act as a go-between. Looking again to Spain, both sides of the Civil War managed their own central banks — with a smaller geographic area to cover, transfers were less complex.

One of the overlooked effects of a galaxy that permits faster-than-light travel is the way in which travel changes data transfer. We think of satellites as being the way in which data is best transferred across large spaces, but it’s hindered by its speed limit. There seems to be reason to think that the HoloNet provides faster-than-light transmissions using hyperwave transceivers.

The HoloNet is the same system that lets the Emperor talk to Darth Vader in Return of the Jedi. The problem for the Alliance is that the HoloNet is maintained by the Empire. It’s like the Floo Network in Harry Potter or the mobile phone network in the US — easy to use, easy to abuse. To rely on it for straightforward credit transmissions is incredibly dangerous for the Alliance.

Not only would it open rebel communications up to interception and interference, it would also help plot out the locations of important Alliance operations. Imagine if the Spanish Republic intercepted a telegraph message that said, “Send 4,000pesetas to Zaragoza.”

Might be a good time to worry about things happening in Zaragoza.

We have to assume that the rebels establish their own small network of faster-than-light communications. The alternative would be a physical distribution of credits, where a ship would physically take the equivalent of a cashier’s check to a regional bank and Alliance operations would then draw on that initial deposit. Han Solo is a lot of things, but a glorified armored car driver isn’t one of them.

This system has the benefit of being less transparent and more decentralized. The trade-off is, clearly, speed of transmission and a chance of interception.

Putting it all together

Using the Spanish Civil War as a model, here’s the financial model of the Rebel Alliance I’ve got.

A group of rich sympathizers and persecuted planets supplies the main funding for the rebels. This funding is either directed into local rebel accounts or is taken to a centralized rebel bank based far from the influence of the Empire.

Local leaders then tap into the funds held at regional banks to make purchases in local currency. That basic system allows for day-to-day operations to continue without any issue. You can use local cash to pay for food, materials, and other living expenses.

When the Alliance needs to make larger purchases, it transfers cash from its central location — probably by physically moving it, keeping things harder to trace — to the location where the purchase needs to be made. This is also the system that the rebels use to refill accounts that aren’t located near sympathetic leaders or that are too close to the Empire’s reach to trust with large sums of cash.

Oddly — or maybe predictably — this is a system that relies on the Empire’s continuing abuses to generate more sympathetic donors. If the Empire instead starts treating its subjects with respect, the flow of donors would dry up, taxing the existing donor-base to the point of expiration.

See, being nice does pay.

Notes on canon

Orwell wasn’t killed in action, by the way. He lived another thirteen years, dying in 1950 from tuberculosis. In-between his being shot and dying, he wrote Animal Farm and 1984. You may have heard of them.

The Star Wars content universe was massive, as of early 2014. Then, with the Disney rights acquisition, it all got trimmed back. The previous canon included things that happened in the Extended Universe, which encompassed books, comics, video games, and other secondary sources.

The new canon has stripped almost all of that out. Now, it’s the movies, a few TV shows, and a handful of other sources. As such, there are holes in the story.

I’ve tried to stick to strictly canonical explanations of what’s going on in the world of Star Wars finance, but as it’s a topic that’s clearly secondary to the main story, there are a few places where detail is thin on the ground.

For example, with the revised canon, the history of Alderaan is incredibly basic, making no mention of why these people have such a lush and beautiful life. In cases like that one, I’ve dipped into the previous canon — Wookieepedia calls it “Legends.”

Speaking of Wookiepedia, I relied heavily on it for the research in this article. The folks over there are an impressive set of fans and you should give it a browse, is you have some spare time.

Please feel free to drop a line in the comments if you have additional details on how this whole thing works. Even as a casual fan I find the whole thing fascinating, and I’d love to know more.

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