How Silicon Valley and Private Finance Are Reshaping War

War profiteering increasingly operates through financial markets rather than only through traditional defense contracting. Military announcements can be timed to influence stock prices, while insider trading, oil speculation, and portfolio earnings from venture capital and private equity connect investors to conflict. Finance has long influenced U.S. war-making, including earlier profiteering investigations and capital flows into Silicon Valley tied to Department of Defense spending on early technologies. New financial pressures, including high interest rates, credit fallout, and reduced liquidity from fewer IPOs, increase private capital’s drive for high returns. A proposed expansion of the Pentagon budget is positioned as a major opportunity. Private capital seeks influence by capturing key military posts, rewriting Pentagon bureaucracy, and embedding investor priorities within military branches.

"War is a racket, he couldn't have imagined that a sitting US president would time announcements about major military operations in order to manipulate the stock market. But as the US economy has been increasingly financialized, so too has the nature of war profiteering, increasingly driven by insider trading, oil speculators, and the portfolio earnings of venture capital (VC) investors, tech billionaires, and private-equity fund managers."

"Of course, finance has always played a role in US war-making: JPMorgan was investigated by the Nye Committee inquiry into World War I profiteering, and private capital flooded into Silicon Valley on the heels of DOD investment into early microwave weapons and semiconductors. But facing a new era of high interest rates, fallout from a decade of bad lending based on fictional credit documentation, and a liquidity crisis driven by fewer IPOs, private capital is increasingly desperate to restore its previous era of high returns."

"The surest avenue for this restoration is the capture of the Pentagon budget, recently proposed by Trump at $1.5 trillion. To access this giant slush fund, private capital has launched an unprecedented effort to capture key posts in the military establishment, rewrite the Pentagon's vast regulatory and development bureaucracy, and embed its priorities within the military branches themselves."

"At the level of personnel, the presence of VC and private equity (PE) is dramatic. The new chairman of the Joint Chiefs of Staff-the highest-ranking military officer in the United States-is Dan Caine, a long-term investor who became a venture capitalist and adviser for Shield Capital and Thrive Capital, two funds with substantial investments in weapons start-ups. Stephen Feinberg, the US deputy secretary of defense, is the cofounder of Cerberus Capital, a $70 billion global inve"

Read at The Nation