Remember Ike and the MIC: He Was Right
January 9, 2024
This essay is the work of a dumb dinobaby. No smart software required.
It used to be common for departing Pentagon officials and retiring generals to head for weapons makers like Boeing and Lockheed Martin. But the hot new destination is venture capital firms, according to
the article, “New Spin on a Revolving Door: Pentagon Officials Turned Venture Capitalists” at DNYUZ. We learn:
“The New York Times has identified at least 50 former Pentagon and national security officials, most of whom left the federal government in the last five years, who are now working in defense-related venture capital or private equity as executives or advisers. In many cases, The Times confirmed that they continued to interact regularly with Pentagon officials or members of Congress to push for policy changes or increases in military spending that could benefit firms they have invested in.”
Yes, pressure from these retirees-turned-venture-capitalists has changed the way agencies direct their budgets. It has also achieved advantageous policy changes: The Defense Innovation Unit now reports directly to the defense secretary. Also, the prohibition against directing small-business grants to firms with more than 50% VC funding has been scrapped.
In one way this trend could be beneficial: instead of lobbying for federal dollars to flow into specific companies, venture capitalists tend to advocate for investment in certain technologies. That way, they hope, multiple firms in which they invest will profit. On the other hand, the nature of venture capitalists means more pressure on Congress and the military to send huge sums their way. Quickly and repeatedly. The article notes:
“But not everyone on Capitol Hill is pleased with the new revolving door, including Senator Elizabeth Warren, Democrat of Massachusetts, who raised concerns about it with the Pentagon this past summer. The growing role of venture capital and private equity firms ‘makes President Eisenhower’s warning about the military-industrial complex seem quaint,’ Ms. Warren said in a statement, after reviewing the list prepared by The Times of former Pentagon officials who have moved into the venture capital world. ‘War profiteering is not new, but the significant expansion risks advancing private financial interests at the expense of national security.’”
Senator Warren may have a point: the article specifies that many military dollars have gone to projects that turned out to be duds. A few have been successful. See the write-up for those details. This moment in geopolitics is an interesting time for this change. Where will it take us?
Cynthia Murrell, January 9, 2024
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