Via. Freakonomics:
The whole point of empires, according to the classic Leninist line, is that they sustain an unrealistically high standard of living for the bourgeoisie and the plutocrats back home by exploiting the cheap labor and undeveloped natural resources of the conquered territories. Empires need two things to sustain themselves: new markets for manufactured goods, and new exploitable sources for raw materials. A third element, not mentioned by Lenin AFAIK but presumably necessary, is a well developed military industrial complex back home to help turn those gas reserves/indigo plants/poppies into kerosene/fabric dye/opium in such a way as to profit the elites. Blowing up Alderaan is not much of a loss by this way of reckoning. It’s part of the galactic first world: there’s no new market, no new stock of raw material to be found there. And from what little we see of the planet, it’s not a *crucial* part of the Empire’s infrastructure. (one doesn’t imagine that the emperor – a sane one, anyway – would offer the same treatment to Geonosis). By reducing the number of citizens, the Empire can increase the per capita benefit to its remaining citizens.
Furthermore, let’s remember that Alderaan isn’t GONE. It’s just blown up. Suddenly all the metallic elements that were languishing away in the planetary core are floating around in the void, ripe for the plucking. And anyone who can plausibly claim to have owned them is dead. You can build a lot of Death Stars with that much tungsten. Well, not even a lot — but maybe one. Like any military industrial complex, it’s a self perpetuating cycle: if you’re going to build battle stations the size of planets, you’re going to need to harvest planets’ worth of resources to build them.
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