11 ms·

Do venture capitalists want forever war?

54 points by Leary 3y ago

draw_down 3y ago
> 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. Is there literally any reason this is here besides “republicans bad”?
- debacle 3y ago
  Thiel isn't a Republican anymore. He's actually been a bit all over the place in the last two years. His most recent political position could be described possibly as "globofascist," though that term has obvious negative connotations.
roenxi 3y ago
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. 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.
- f6v 3y ago
  > However war is terrible for business. It’s not if it’s somewhere far away and you’re only concerned with selling weapons. The Great Disarmament of the European states of 2022-2025(?) will secure contracts for the American industry for decades to come.
  - roenxi 3y ago
    Selling weapons far away is less use to a capitalist than improving the society around them. Weapons someone gives you resources, so that is nice, but if you build something enduring for the same amount you get positive externalities as well from a rich society. $1,000,000 in weapon sales is less useful for a business owner than $1,000,000 in building out, say, a good plumbing system. In the first case they get the million, but in the second case they also don't have to put up with as much disease in their local community. So the basic incentives here is not to put money into weapons unless demand is already there.
- PeterisP 3y ago
  War is also excellent for business if it disrupts your competitors, and especially in liquid commodities where any shortage immediately bumps prices. For the major oil exporters any conflict happening in countries involved in oil production or transportation is a benefit, as it greatly bumps their profits at the expense of the oil consuming countries. Arguably some of the conflicts in places like Syria or Libya have been worse than they 'should' have been simply because there's a large financial motivation to send money and weapons to simply stir up trouble so that the global oil price hikes upwards; a major oil producer doesn't even prefer one side of a conflict, it can simply send some weapons to everyone involved and profit because the country and their oil production gets disrupted. For the major grain exporters, a war happening in Ukrainian wheat fields is a big boon as it raises global grain prices. There IMHO the other interests are even larger, so this is not the decisive factor, but it does add up to many billions worth of incentives that likely are taken into account. Now on the other hand, disrupting global trade is pretty universally bad for business, so if somebody (e.g. Houthis) attempt that, then we can expect everyone powerful treating them as 'hostis humani generis' i.e. enemy of all mankind, as piracy has been addressed since Roman times.
wolframhempel 3y ago
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: 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. 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. 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. 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. 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.
- supriyo-biswas 3y ago
  To add to your comment, I'll just note that critics of VCs (and capitalism in general) are unique in being dissatisfied with either outcome. When they build businesses with presences in various countries, they claim that they are weakening a country by diffusing their power, making them reliant on other countries - which, if you think about it, reduces the possibility of war. At the same time, when they invest in a country's defense sector so that a country can defend itself against aggressors, they are simultaneously accused of inciting wars.
- 3y ago
JeffSnazz 3y ago
Better than caring about climate change! (I believe venture capital is destroying our society.)
- supriyo-biswas 3y ago
  Reports such as [1] and [2] seem to indicate that a growing portion of VC funding is being directed towards the climate/clean energy sector. [1] https://www.verdict.co.uk/climate-tech-investing-dominates-venture-capital-investment-in-2023/ https://www.verdict.co.uk/climate-tech-investing-dominates-v... [2] https://www.pwc.com/gx/en/issues/esg/state-of-climate-tech-2023-investment.html https://www.pwc.com/gx/en/issues/esg/state-of-climate-tech-2...
  - JeffSnazz 3y ago
    ...yea, too little, too late, in a highly ineffective manner. We're not going to consume our way out of climate change and that's all VCs are capable of doing. In fact our addiction to managing our society via consumption is very directly related to ongoing climate change. You want to know what would actually look like addressing the problem? Paying poor countries to not build coal plants. Blowing up infrastructure. Etc. Reduction of emissions is the only thing that matters at this point.
    - RiceRichardJ 3y ago
      > Paying poor countries to not build coal plants. So that they can be replaced with cleaner power or just to bribe people into staying poor? > Blowing up infrastructure. So that people starve to death?
      - JeffSnazz 3y ago
        > So that they can be replaced with cleaner power or just to bribe people into staying poor? This is a straightforward wealth-transfer. It is up to the recipient to decide how they want to use it, but it should be noted this is attached to a statement to not build coal plants. Given the obvious correlation between energy production and economic productivity this should work out ok as well as delivering a long-overdue balancing of power among economically disparate peoples. The last effect is why I know this will not happen until it is too late (probably already). > So that people starve to death? That's coming regardless. Nonetheless, strategic targeting should avoid this.
DeathArrow 3y ago
>Do venture capitalists want forever war? 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. 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".
medo-bear 3y ago
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.
- f6v 3y ago
  > just to remind people how terrible such weaponry really is. I can just pull up the video of past tests. Will having it in 4K make any difference?
  - medo-bear 3y ago
    The point is to reach mass media.
- nickpp 3y ago
  > triumph of capitalism at the expense of freedom and democracy As someone who was born on the wrong side of the Iron Curtain, I can assure you capitalism, freedom and democracy came together while we had communism, lack of freedom and dictatorships.
  - medo-bear 3y ago
    > As someone who was born on the wrong side of the Iron Curtain Why is there still a need to start responses in such a cliche manner. As someone who was also born there ... who cares > I can assure you capitalism, freedom and democracy Capitalism, freedom, and democracy are all seperate concepts. Capitalism seeks to maximize capital at the expense of labour time. Freedom mens nothing if you dont have the time (eaten up by labour) and capital to enjoy it. Democracy means nothing if you dont have time to be educated about policies you vote for (we have objective mass media for that). Anyway, if you want a more extreme example of freedom and democracy not equal capitalism just look at Russia and China
varjag 3y ago
Is Responsible Statecraft Winging for Authoritarianism Again?
nickpp 3y ago
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.
- wildrhythms 3y ago
  Never did I think I would find a pro-cop, pro-military industrial complex 'hacker' but here we are.
  - nickpp 3y ago
    I live in Eastern Europe, close to Ukraine. Never did I think that I would be pro-military complex until March 2022 but here we are. Also San Francisco used to be one my favorite cities on Earth to visit. Never did I think that I would be pro-cop until quite recently but here we are again.
shoubidouwah 3y ago
coincidentally explored by sci-fi quite extensively. e.g: The Red, by L. Nagata.
Timber-6539 3y ago
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.
- fullshark 3y ago
  Because of Venture Capitalists?
  - Timber-6539 3y ago
    War needs funding. And it's no coincidence that the US is deep in the middle of all the current ongoing wars.
- deleted 3y ago
  [deleted]
vcryan 3y ago
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.
incomingpain 3y ago
>As conflicts ignite around the world, dragging on in Ukraine while sparking off in the Middle East, venture capital is banking on defense. This is a weird attack on VC. 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. 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. 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. 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. This is probably what it would take to solve the problem of war.
indigo0086 3y ago
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
2devnull 3y ago
“For starters, VC-powered defense organizations are making their allegiance with Israel” Oh, I see.
juancn 3y ago
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.
- JeffSnazz 3y ago
  > Military expenditure is more about being ready "just in case" A rule of thumb I've found to be useful is that if you make a weapon you'll find a use for it. Being ready "just in case" is some of the most homicidal thought patterns in history. A great counter-example is nukes, but I suspect it's just a matter of time until one either accidentally fires or our insane assumption that states are rational actors collapses.
  - mcmoor 3y ago
    The last several decades says otherwise about nukes, to the point that I'm starting to believe that there are time travellers actively preventing any spark to go off.

54 points by Leary 3y ago

> 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. Is there literally any reason this is here besides “republicans bad”?

debacle 3y ago
Thiel isn't a Republican anymore. He's actually been a bit all over the place in the last two years. His most recent political position could be described possibly as "globofascist," though that term has obvious negative connotations.

roenxi 3y ago

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. 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.

f6v 3y ago
> However war is terrible for business. It’s not if it’s somewhere far away and you’re only concerned with selling weapons. The Great Disarmament of the European states of 2022-2025(?) will secure contracts for the American industry for decades to come.
- roenxi 3y ago
  Selling weapons far away is less use to a capitalist than improving the society around them. Weapons someone gives you resources, so that is nice, but if you build something enduring for the same amount you get positive externalities as well from a rich society. $1,000,000 in weapon sales is less useful for a business owner than $1,000,000 in building out, say, a good plumbing system. In the first case they get the million, but in the second case they also don't have to put up with as much disease in their local community. So the basic incentives here is not to put money into weapons unless demand is already there.
PeterisP 3y ago
War is also excellent for business if it disrupts your competitors, and especially in liquid commodities where any shortage immediately bumps prices. For the major oil exporters any conflict happening in countries involved in oil production or transportation is a benefit, as it greatly bumps their profits at the expense of the oil consuming countries. Arguably some of the conflicts in places like Syria or Libya have been worse than they 'should' have been simply because there's a large financial motivation to send money and weapons to simply stir up trouble so that the global oil price hikes upwards; a major oil producer doesn't even prefer one side of a conflict, it can simply send some weapons to everyone involved and profit because the country and their oil production gets disrupted. For the major grain exporters, a war happening in Ukrainian wheat fields is a big boon as it raises global grain prices. There IMHO the other interests are even larger, so this is not the decisive factor, but it does add up to many billions worth of incentives that likely are taken into account. Now on the other hand, disrupting global trade is pretty universally bad for business, so if somebody (e.g. Houthis) attempt that, then we can expect everyone powerful treating them as 'hostis humani generis' i.e. enemy of all mankind, as piracy has been addressed since Roman times.

wolframhempel 3y ago

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: 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. 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. 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. 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. 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.

supriyo-biswas 3y ago
To add to your comment, I'll just note that critics of VCs (and capitalism in general) are unique in being dissatisfied with either outcome. When they build businesses with presences in various countries, they claim that they are weakening a country by diffusing their power, making them reliant on other countries - which, if you think about it, reduces the possibility of war. At the same time, when they invest in a country's defense sector so that a country can defend itself against aggressors, they are simultaneously accused of inciting wars.
3y ago

JeffSnazz 3y ago

Better than caring about climate change! (I believe venture capital is destroying our society.)

supriyo-biswas 3y ago
Reports such as [1] and [2] seem to indicate that a growing portion of VC funding is being directed towards the climate/clean energy sector. [1] https://www.verdict.co.uk/climate-tech-investing-dominates-venture-capital-investment-in-2023/ https://www.verdict.co.uk/climate-tech-investing-dominates-v... [2] https://www.pwc.com/gx/en/issues/esg/state-of-climate-tech-2023-investment.html https://www.pwc.com/gx/en/issues/esg/state-of-climate-tech-2...
- JeffSnazz 3y ago
  ...yea, too little, too late, in a highly ineffective manner. We're not going to consume our way out of climate change and that's all VCs are capable of doing. In fact our addiction to managing our society via consumption is very directly related to ongoing climate change. You want to know what would actually look like addressing the problem? Paying poor countries to not build coal plants. Blowing up infrastructure. Etc. Reduction of emissions is the only thing that matters at this point.
  - RiceRichardJ 3y ago
    > Paying poor countries to not build coal plants. So that they can be replaced with cleaner power or just to bribe people into staying poor? > Blowing up infrastructure. So that people starve to death?
    - JeffSnazz 3y ago
      > So that they can be replaced with cleaner power or just to bribe people into staying poor? This is a straightforward wealth-transfer. It is up to the recipient to decide how they want to use it, but it should be noted this is attached to a statement to not build coal plants. Given the obvious correlation between energy production and economic productivity this should work out ok as well as delivering a long-overdue balancing of power among economically disparate peoples. The last effect is why I know this will not happen until it is too late (probably already). > So that people starve to death? That's coming regardless. Nonetheless, strategic targeting should avoid this.

DeathArrow 3y ago

>Do venture capitalists want forever war? 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. 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".

medo-bear 3y ago

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.

f6v 3y ago
> just to remind people how terrible such weaponry really is. I can just pull up the video of past tests. Will having it in 4K make any difference?
- medo-bear 3y ago
  The point is to reach mass media.
nickpp 3y ago
> triumph of capitalism at the expense of freedom and democracy As someone who was born on the wrong side of the Iron Curtain, I can assure you capitalism, freedom and democracy came together while we had communism, lack of freedom and dictatorships.
- medo-bear 3y ago
  > As someone who was born on the wrong side of the Iron Curtain Why is there still a need to start responses in such a cliche manner. As someone who was also born there ... who cares > I can assure you capitalism, freedom and democracy Capitalism, freedom, and democracy are all seperate concepts. Capitalism seeks to maximize capital at the expense of labour time. Freedom mens nothing if you dont have the time (eaten up by labour) and capital to enjoy it. Democracy means nothing if you dont have time to be educated about policies you vote for (we have objective mass media for that). Anyway, if you want a more extreme example of freedom and democracy not equal capitalism just look at Russia and China

varjag 3y ago

Is Responsible Statecraft Winging for Authoritarianism Again?

nickpp 3y ago

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.

wildrhythms 3y ago
Never did I think I would find a pro-cop, pro-military industrial complex 'hacker' but here we are.
- nickpp 3y ago
  I live in Eastern Europe, close to Ukraine. Never did I think that I would be pro-military complex until March 2022 but here we are. Also San Francisco used to be one my favorite cities on Earth to visit. Never did I think that I would be pro-cop until quite recently but here we are again.

shoubidouwah 3y ago

coincidentally explored by sci-fi quite extensively. e.g: The Red, by L. Nagata.

Timber-6539 3y ago

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.

fullshark 3y ago
Because of Venture Capitalists?
- Timber-6539 3y ago
  War needs funding. And it's no coincidence that the US is deep in the middle of all the current ongoing wars.
deleted 3y ago
[deleted]

vcryan 3y ago

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.

incomingpain 3y ago

>As conflicts ignite around the world, dragging on in Ukraine while sparking off in the Middle East, venture capital is banking on defense. This is a weird attack on VC. 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. 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. 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. 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. This is probably what it would take to solve the problem of war.

indigo0086 3y ago

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

2devnull 3y ago

“For starters, VC-powered defense organizations are making their allegiance with Israel” Oh, I see.

juancn 3y ago

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.

JeffSnazz 3y ago
> Military expenditure is more about being ready "just in case" A rule of thumb I've found to be useful is that if you make a weapon you'll find a use for it. Being ready "just in case" is some of the most homicidal thought patterns in history. A great counter-example is nukes, but I suspect it's just a matter of time until one either accidentally fires or our insane assumption that states are rational actors collapses.
- mcmoor 3y ago
  The last several decades says otherwise about nukes, to the point that I'm starting to believe that there are time travellers actively preventing any spark to go off.