Venture Capital rarely creates trends - it follows them, and arguably amplifies them. In the case of rising conflicts around the world, it makes sense for VCs to allocate parts of their funds towards defense. Does that mean they have an interest in prolonging war like this article claims? No - quite the opposite:<p>War happens when one party thinks that the other party is weak enough to be attacked. This cannot be stressed enough. It's a lesson that has unfortunately been lost on the isolationist movement around the world that believes that cutting funding for the defense of Ukraine or diplomatic efforts towards the Huthis will create less war.<p>War is avoided if one party is so strong that an attack is futile. You can add other layers of war avoidance on top of that, such as close trade and political relationships, cultural exchange, open communication and ultimately friendship and alliances, but the backbone always has to be strength. The Romans knew this when they said "Si vis pacem, para bellum", and its just as true today.<p>Creating this strength happens through cultural readiness and technological innovation - and unfortunately, that's where the West has a massive problem. Almost eighty years without an existential threat, paired with ever growing governments and lobbying has created a defense purchasing situation in which ever more enormous contracts are awarded to ever smaller numbers of giant companies.<p>And the structure of these contracts, such as Cost-Plus that pay for whatever the contractee spends plus a fixed margin on top creates incentives that discourages innovation and efficiency.<p>We should be grateful that finally startups and VCs are overcoming their reflexive aversion against anything defense and start innovating. The startup ecosystem has been the best engine for innovation we have and finally turning it towards defense might help strengthen the west's place in the world and be a major contributor to lasting peace.
>As conflicts ignite around the world, dragging on in Ukraine while sparking off in the Middle East, venture capital is banking on defense.<p>This is a weird attack on VC.<p>War is inevitable. It's a Yin Yang thing. War is never meant to be won, but to be perpetual. You want to end the evils of war sooner then you can ever win it. That the spectrum of humanity means people will always be in want leading to war.<p>In my scifi book, I imagined a scenario where my main character has exclusive access to alien technology and can impose his will on Earth. He doesnt wish to be emperor but everyone is worried that he plans to be that. Instead he figures out the greatest hoax ever. He comes in, pretends to be the new emperor and says that using alien tech he will start immediately killing any and all people who commit violence.<p>Then he start streaming his progress. But its all holograms and fake names, his alien tech lasers are only doing nothing damage starting fires all over the world. But world peace happens for the first time.<p>But then he backs off quietly and world peace persists long enough in the fear of his alien tech. People start talking out their problems.<p>This is probably what it would take to solve the problem of war.
There is a chicken-and-egg problem here. VCs would presumably love defence contracts because government money is where it is at if you want to get wealthy without risking much.<p>However war is terrible for business. The reason governments handle defence is because capitalist free markets do not typically allocate much to weapons spending and would never attempt to fund a standing military like what the US government does. So I'd suggest that the root of the demand is coming from the political class and the VCs are responding to that.
When governments arent printing money to dump into military contracts and war-making they are doing it for green energy, and guess what vcs are chasing after. Vcs aren't the origin just the benefactors. If world peace was on the us bidget they'd be chasing after those dollars
No, they want peace. But you need to invest in defence if you want peace. Like how you need a well funded police if you want less crime in your neighbourhood. I believe the opposite - defund the police - has been tried recently in certain US cities with the predictable sad results.
Military expenditure is more about being ready "just in case" than actually using the things you buy and showing of to others so they don't mess with you.
I am in general surprised and worried about the role media is playing in priming us for big military conflict. An unfortunate outcome of the collapse of Iron Curtain has in fact been the triumph of capitalism at the expense of freedom and democracy (which it could have been). This triumph of capitalism then set the foundations of returning the world to pre WWI tensions between great powers, which is exactly what is happening in Ukraine and Middle East, both of which are key gateways for flow of resources. I predict that soon there will be a big influx of wealthy families into places like South America due to its relative geographical safety from nuclear conflict. Part of me wishes that US and Russia resume testing of nuclear weapons just to remind people how terrible such weaponry really is.
I had thought about this. The way to address this is to take out (through competition) other businesses that the VC is involved in while also lobbying for policy changes that make it harder or less profitable for VC scum to profit from war.
>Do venture capitalists want forever war?<p>Not necessarily. Investors make bets. So they want to be able to predict if a sector goes up or down. If it's up or down, it doesn't matter as they can make bets towards or against that sector.<p>Right now some investors think defense sector is on the rise, so they make their bets in that direction. Would have been otherwise, they would have been equally happy to short the defense companies. At which points someone would complain that "venture capitalists are destroying our defense industry".
> While Thiel says he won’t fund candidates in the 2024 race, he’s previously supported a slew of successful Republican congressional campaigns. And after stints as Chief Financial Officer for Thiel’s now-defunct Clarium Capital Management and Chief of Staff at Thiel Capital, Michael Kratsios took White House and Defense Department positions in the Trump administration, giving Thiel closer proximity to power.<p>Is there literally any reason this is here besides “republicans bad”?
Explains why previously dormant terrorists groups like Hamas and ISIS have suddenly been re-activated since Russia invaded Ukraine and why concerned world leaders keep making ridiculously reckless comments geared towards incitement of potential military conflict.