How the pursuit of wealth sustains the military-industrial complex and creates unprecedented conflicts of interest
War is usually discussed as a contest of states, ideologies and armies. Less attention is given to the financial system surrounding it: the weapons manufacturers, investors, consultants, lobbyists, political donors and office-holders whose wealth can increase when international tension intensifies.
The essential point is not that every war is secretly manufactured by arms companies, or that every investor in a defence company wants people to die. It is more structural and, in some respects, more disturbing. Modern political and financial institutions distribute enormous rewards to people and organisations that benefit when governments perceive danger, expand military budgets and prepare for conflicts that may continue for decades.
Actual wars generate demand by consuming weapons and exhausting national stockpiles. Perceived future wars can be even more commercially valuable because they justify long-term purchases of submarines, aircraft, missiles, surveillance systems, military bases and weapons factories. The commercial beneficiaries therefore do not need to provoke a world war. They need governments and populations to accept a condition of permanent insecurity.
War as a growth industry
The world’s 100 largest arms-producing and military-services companies recorded combined arms revenues of US$679 billion in 2024, the highest total ever measured by the Stockholm International Peace Research Institute. That was a real increase of 5.9 per cent in one year and 26 per cent over the decade from 2015. US companies accounted for approximately US$334 billion of the 2024 total.
These figures predate much of the subsequent rearmament now flowing through company accounts. Recent corporate results show not merely higher annual sales, but rapidly growing order backlogs that lock in government spending for years.
Lockheed Martin reported a record US$194 billion backlog at the end of 2025. By July 2026, its backlog had reportedly climbed to approximately US$230 billion, accompanied by higher profit and sales forecasts as missile production expanded.
BAE Systems reported 2025 sales of £30.7 billion, operating profit of £2.93 billion and a record backlog of approximately £83.6 billion. It increased its annual dividend by 10 per cent.
Rheinmetall’s 2025 sales rose 29 per cent to approximately €9.9 billion, while its operating result increased 33 per cent to €1.84 billion. Its backlog reached €63.8 billion, compared with €46.9 billion a year earlier, and the proposed dividend rose from €8.10 to €11.50 a share.
Saab’s 2025 order backlog rose to SEK274.5 billion, from SEK187.2 billion a year earlier. Its adjusted operating income increased 37 per cent.
These are not abnormal windfalls detached from government policy. They are the financial expression of deliberate decisions by governments to transfer greater quantities of public money into military procurement.
Why perceived conflict can be more valuable than war itself
Actual combat consumes ammunition, missiles, drones, vehicles and spare parts. It creates immediate replacement orders. But a long-term strategic confrontation creates a broader and more reliable market.
The prospect of a future conflict with China, for example, supports spending on nuclear-powered submarines, long-range missiles, aircraft, satellites, cyberwarfare systems, hardened fuel facilities and military infrastructure across the Indo-Pacific. These projects involve development, construction, maintenance, upgrades and sustainment contracts that can last for generations.
There is a genuine basis for concern about China’s growing military capacity and increasingly assertive activities. US defence planning explicitly identifies China as its principal long-term strategic competitor, while official budget documents describe a Pacific military posture designed to deter China through forward-deployed, combat-capable forces.
Yet a real increase in Chinese power does not mean every worst-case prediction is equally probable. The crucial political technique is to move public discussion from the proposition that China possesses greater military capability to the assumption that war is increasingly inevitable.
Once that assumption is normalised, almost any expenditure can be presented as prudent insurance. The prospect of conflict becomes self-validating. Chinese military expansion justifies allied rearmament. Allied rearmament then reinforces China’s belief that it is being encircled, which provides Beijing with further justification for its own expansion.
This is the security dilemma in commercial form. Each side describes its military growth as defensive while interpreting the other’s as evidence of aggression. Weapons producers on all sides benefit from the cycle.
The incentive to exaggerate danger
A defence contractor does not need to fabricate a threat to profit from it. It can emphasise the most alarming interpretation of genuine events.
The commercial logic is straightforward. A manufacturer benefits when governments believe that:
existing stockpiles are dangerously inadequate;
adversaries are moving faster than expected;
diplomacy is unreliable;
military superiority must be restored urgently;
weapons production must be protected from ordinary budgetary restraint.
This does not generally operate through a single conspiracy. It works through an alignment of institutions.
Military services seek larger budgets and more advanced capabilities. Contractors seek long-term programs. Politicians gain security credentials and employment in electorally important districts. Strategic institutes gain funding and access. Retired officials find lucrative positions in industry. Financial analysts reward companies that secure larger backlogs. Shareholders receive dividends, buybacks and capital gains.
Each participant can claim to be acting rationally within its own role. Together, they create a system with a pronounced bias towards militarisation.
Lobbying and the revolving door
Weapons manufacturers do not passively wait for governments to assess threats. They maintain extensive lobbying operations, cultivate legislators and employ former military and government officials.
The revolving door is particularly important because it blurs the boundary between public service and private reward. Senior officials may participate in procurement, force-structure or strategic decisions and later work for companies that benefited from those decisions.
A US Government Accountability Office examination found that major defence contractors employed substantial numbers of former Department of Defense officials and that the Pentagon lacked a centralised means of identifying all former personnel subject to post-government employment restrictions. The GAO warned that incomplete monitoring weakened the department’s ability to manage conflicts of interest.
Earlier GAO research also found serious under-reporting. Contractors reported employing 1,263 former defence officials in 2006, while tax data indicated that the actual number was 2,435.
The problem is not that former officials possess no legitimate expertise. It is that their future earning prospects may be affected by decisions taken while in office, while contractors gain access to their knowledge, relationships and institutional authority.
The appearance of impropriety can be almost as corrosive as proven corruption. Citizens cannot easily determine whether a weapons program was approved because it was the best strategic option, because it protected a military service’s prestige, because it created political jobs, or because influential participants expected future employment.
Prolonged conflict and replenishment profits
The wars in Ukraine and the Middle East illustrate how conflict generates revenue through both immediate consumption and subsequent replenishment.
A missile fired today may have been manufactured years earlier. Its use does not instantly appear as revenue. The financial consequence arrives when governments decide that inventories must be restored, expanded or redesigned.
The commercial sequence is:
weapons consumption → depleted inventories → emergency appropriations → replacement contracts → expanded factories → long-term sustainment
This is why an apparently temporary conflict can reshape industry for decades. Production facilities, supply chains and multiyear procurement contracts remain after the initial crisis has receded.
The most commercially attractive environment may not be uncontrolled global war. Such a war would threaten markets, infrastructure and political stability. A more profitable condition is prolonged tension punctuated by limited or regional conflict: sufficiently dangerous to maintain public expenditure, but sufficiently contained to preserve financial markets and government solvency.
Investors and the financialisation of insecurity
Defence companies commonly defend their profitability by pointing out that their percentage margins are not necessarily higher than those of technology, banking or pharmaceutical companies. This is true but incomplete.
The attraction of defence investment lies not only in margins. It lies in the quality and predictability of the customer. Governments can tax, borrow and commit future administrations to multiyear contracts. Defence orders are often politically protected and difficult to cancel. Strategic programs can survive cost overruns that would destroy an ordinary commercial enterprise.
Investors therefore benefit from:
rising military appropriations;
contract extensions;
emergency replenishment;
government-funded factory expansion;
higher dividends;
share repurchases;
expectations of future geopolitical tension.
Most shareholders do not consciously advocate war. Many hold defence stocks indirectly through superannuation, pension or index funds. Nevertheless, capital markets reward management for increasing sales, contracts and shareholder returns. They do not ordinarily reward a defence company for reducing the likelihood that its products will be required.
That creates a moral distance between cause and reward. The shareholder sees portfolio performance. The company reports backlog and earnings. The government announces deterrence and readiness. The human consequences occur somewhere else.
Presidential power as a market-moving asset
The conflicts of interest become more acute when political leaders and their families retain extensive business and investment interests while exercising powers capable of moving entire markets.
Donald Trump’s second presidency has produced an extraordinary convergence of public authority and private wealth.
Reuters reported that Trump disclosed more than US$1.4 billion in income from family cryptocurrency ventures during 2025. Almost US$800 million came from World Liberty Financial, including more than US$520 million from token sales and more than US$250 million from sales of ownership interests.
A separate Reuters investigation estimated that the Trump family had generated at least US$2.3 billion in profits from four cryptocurrency ventures since the November 2024 election. Reuters concluded that the family carried little or no downside risk in those ventures while many retail investors suffered substantial losses.
Forbes estimated Donald Trump’s personal wealth at approximately US$6.5 billion in March 2026, an increase of about US$1.4 billion over the preceding year. Other published estimates differ because private companies, crypto holdings and Trump Media shares are difficult to value and may not be readily saleable.
The broader family’s wealth has been estimated at around US$10 billion, nearly twice its level around the 2024 election, although such figures should be treated as approximations rather than audited accounts.
These gains do not establish that any military decision was taken for personal financial benefit. They do establish that the president and his family are financially exposed to businesses, investors and foreign-linked entities whose fortunes may be affected by presidential policy.
More than 21,000 investment transactions
Trump’s annual financial disclosures revealed another extraordinary development. Investment advisers managing his accounts completed more than 21,000 securities transactions during 2025. ABC News reported that the accounts grew to at least US$858 million and included interests in approximately 1,600 companies.
During the first quarter of 2026 alone, Trump’s accounts reportedly completed approximately 3,600 trades worth between US$212 million and US$695 million.
The Trump Organization says the portfolios are fully discretionary, independently managed by third-party financial institutions and operated through automated investment processes. Public evidence does not show that Trump personally selected individual trades.
That defence is significant, but it does not eliminate the underlying conflict. A president can affect the value of companies and sectors through tariffs, sanctions, contracts, regulatory changes, military action and public statements. The public disclosures provide ranges rather than exact transaction prices, and they appear only after trades have occurred.
The question is therefore not limited to whether Trump telephoned an investment manager and ordered a particular purchase. It is whether a president should remain the economic beneficiary of an exceptionally active portfolio containing interests in sectors directly affected by his own decisions.
Suspicious trading before presidential announcements
The most alarming evidence does not yet directly identify the Trump family. It concerns unidentified traders who placed enormous and highly profitable positions immediately before market-moving Trump announcements.
Reuters reported that traders placed oil-market bets totalling as much as US$7 billion during March and April 2026, shortly before Trump announced major shifts in US policy concerning Iran. The positions included short bets on crude oil, diesel and petrol before announcements that caused oil prices to fall sharply. Reuters could not establish who placed the trades or whether the traders possessed non-public information.
The US Commodity Futures Trading Commission began examining trades made before policy changes on 23 March and 7 April. One approximately US$950 million position was placed only hours before a US-Iran ceasefire announcement.
Another US$430 million bet on falling oil prices was reportedly placed 15 minutes before Trump announced an extension of a ceasefire.
Reuters also identified profitable trades preceding tariff announcements and military or diplomatic developments concerning Venezuela and Iran. Market-law specialists said the timing and size warranted investigation to determine whether confidential government information had leaked.
None of this proves that Trump, his relatives or their companies controlled the accounts. No public enforcement finding has established that connection. Yet it demonstrates the immense commercial value of advance knowledge about presidential decisions.
When the president can move oil, equities, currencies, bonds and crypto assets with a statement, confidential access becomes a potentially tradeable commodity. The weakness of transparency rules means the ultimate beneficiaries may remain hidden behind investment funds, brokers, offshore structures or pseudonymous wallets.
Conflict of interest without proven conspiracy
It is essential to distinguish three propositions.
First, presidents and governments can generate enormous commercial opportunities through war, threats, sanctions and military spending. This is undeniable.
Second, defence companies, investors and politically connected businesses have financial incentives to influence those decisions. Their lobbying, donations, employment networks and investments provide them with mechanisms for doing so.
Third, proving that a particular leader deliberately started or prolonged a war for private profit requires specific evidence of intent, communication or quid pro quo. Such evidence has not been publicly established in relation to Trump’s handling of Ukraine, Israel, Lebanon, Gaza, the West Bank or Iran.
That evidentiary caution should not become an excuse for complacency. Democratic ethics rules are meant to prevent circumstances in which the public must wait for a criminal prosecution before recognising an unacceptable conflict.
The Trump family’s expanding cryptocurrency, investment, licensing and foreign-linked business interests coexist with presidential authority over financial regulation, military deployments, sanctions, arms sales and international negotiations. That degree of overlap is itself a governance failure.
The deeper problem
The military-industrial complex does not require a secret committee coordinating wars for profit. It requires only a political economy in which the most influential institutions receive rewards from heightened danger.
Weapons manufacturers gain contracts. Executives receive bonuses. Investors receive returns. Politicians gain donations, jobs and an image of strength. Retired officials gain private employment. Think tanks gain funding. Media organisations gain dramatic content. Foreign governments gain access through arms purchases and commercial relationships.
Meanwhile, the costs are dispersed.
Taxpayers fund contracts whose full costs may not emerge for decades. Soldiers and civilians bear the physical consequences. Public services compete with military budgets. Diplomacy is treated as weakness. Those who question escalation are required to prove that peace is safe, while advocates of militarisation are rarely required to prove that their weapons will prevent rather than intensify conflict.
The danger is not simply that companies profit from war. It is that the institutions advising governments about danger are often financially and professionally integrated with the industries selling the proposed solution.
Conclusion
The pursuit of wealth does not explain every conflict, but it helps explain why military confrontation so often becomes durable, institutionalised and difficult to reverse.
Real wars increase weapons consumption. Perceived wars expand long-term procurement. Threat inflation protects budgets. Lobbying converts corporate interests into policy influence. The revolving door aligns public careers with private rewards. Financial markets turn insecurity into an investable asset.
Under Donald Trump, these longstanding problems have acquired an unprecedented presidential dimension. The sitting president’s family has generated billions of dollars through crypto and other ventures while his investment accounts have conducted tens of thousands of transactions across companies and sectors affected by government policy. At the same time, unidentified traders have repeatedly placed vast, well-timed positions before major presidential announcements.
There is not yet public evidence proving that the Trump family used advance knowledge to execute those suspicious trades or deliberately prolonged wars for personal gain. But the system should not require proof of criminal intent before recognising the danger.
A democracy cannot confidently distinguish national strategy from private interest when those exercising public power remain capable of becoming vastly richer from the political and financial conditions their own decisions create.
The central conflict is therefore no longer only between states. It is between the public interest in peace and accountability, and a political economy in which permanent insecurity has become extraordinarily profitable.
Australia’s AUKUS commitment: public risk, private opportunity
Australia’s continuation of AUKUS must be examined against this wider political economy of permanent insecurity. The nuclear-powered submarine program is officially estimated to cost between A$268 billion and A$368 billion over several decades. The Parliamentary Budget Office’s central estimate was A$367.6 billion in out-turned dollars, including a contingency of almost A$123 billion. Parliamentary analysis has also noted uncertainty over whether the headline figure fully includes eventual reactor defuelling, submarine decommissioning and the long-term storage and disposal of radioactive waste.
This is not simply expenditure on Australian-built submarines. Australian taxpayers are helping finance the expansion of the British and American submarine industries. Australia has committed US$3 billion, approximately A$4.7 billion when announced, to increase the capacity of the United States submarine industrial base. A further A$4.6 billion over ten years is being directed towards the British program, including the expansion of Rolls-Royce’s reactor-production facilities in Derby and contributions to the design of SSN-AUKUS. Australia has also committed at least A$18 billion to supporting infrastructure in South Australia and Western Australia, with more than A$30 billion earmarked for the Australian submarine industrial base and associated supply chains.
The government argues that these payments are necessary because US shipyards must raise production before they can release Virginia-class submarines to Australia, while British facilities must design and manufacture the reactors for the later SSN-AUKUS fleet. That explanation is technically coherent. It does not alter the financial reality that Australian public money is being used to recapitalise foreign military-industrial capacity and support companies including BAE Systems and Rolls-Royce. The British Government openly describes AUKUS as a program that will strengthen its industrial base, sustain continuous submarine construction and support tens of thousands of British jobs.
Australian industry will also receive substantial contracts, employment and infrastructure investment. The government projects about 20,000 direct Australian jobs over 30 years, including submarine construction at Osborne and expansion at HMAS Stirling. Those benefits are real, but they do not resolve the central public-interest question. Employment generated by a project is not, by itself, evidence that the project is strategically necessary, affordable or superior to less expensive alternatives. Once shipyards, unions, state governments, contractors, universities and regional economies become financially dependent on AUKUS, cancellation becomes politically harder regardless of deteriorating costs, schedules or strategic assumptions.
AUKUS consequently creates the same self-reinforcing incentives visible throughout the international military-industrial complex. China’s military expansion is invoked to justify the submarines. The submarines, expanded US access and the rotational presence of American and British nuclear-powered vessels may then be interpreted by China as evidence of containment and preparation for war. This can encourage further Chinese military expansion, which is subsequently used to validate still greater Australian expenditure. By 2027, AUKUS plans envisage a regular rotational presence of US and UK nuclear-powered submarines at HMAS Stirling.
The sovereignty issue is therefore broader than whether an Australian officer will formally command an Australian submarine. The government insists that Australia will retain sovereign control over its vessels. Yet the capability will remain dependent on US and British technology, reactors, weapons, maintenance systems, intelligence and industrial support. Australia’s initial access to Virginia-class submarines also depends on US production capacity and future presidential and congressional decisions. Formal command authority does not remove the strategic pressure created by such deep operational and technological dependence.
The opportunity cost is equally significant. Hundreds of billions of dollars committed to one military capability cannot also be spent on housing, health, climate adaptation, public transport, education or less costly forms of national defence. The official description of AUKUS as averaging only about 0.15 per cent of GDP obscures the cumulative transfer of public resources and the possibility of further cost growth over several decades. The figure also spreads the political responsibility across governments whose members will never have to deliver the final submarines or account for their ultimate cost.
Seen in this context, AUKUS is not merely an Australian defence purchase. It is a taxpayer-financed commitment to the long-term expansion and integration of the Australian, American and British military-industrial systems. Its corporate beneficiaries receive contracts, infrastructure and unusually durable demand. Governments receive a symbol of strategic commitment to the alliance. The public accepts the financial, technological and geopolitical risk.
Whether nuclear-powered submarines ultimately provide Australia with a proportionate security benefit remains contested. What is already certain is that the arrangement converts anxiety about a future conflict with China into multigenerational revenue for weapons manufacturers, nuclear contractors, shipbuilders and associated investors. It is a clear Australian example of how perceived conflict, strategic dependency and the pursuit of industrial profit can become mutually reinforcing.
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