How Financial Institutions Like Silicon Valley Bank Fund the Weapons Industry
After Silicon Valley Bank’s near collapse, commentators rightly focused on the unfairness of state intervention for an institution that had acted irresponsibly. But little attention was paid to the role that banks like SVB play in financing US militarism.
US Navy personnel walk past an F-18 jet fighter on the flight deck of USS Gerald R. Ford, on November 17, 2022, in Gosport, England. (Finnbarr Webster / Getty Images)
The collapse of Silicon Valley Bank last week sparked a number of debates. Was SVB “too big to fail?” Was the Biden administration response a “bailout?” Are the libertarian-leaning tech CEOs hypocrites? Is this a sign that the Fed’s interest rate hikes should come to an end?
But one element of the SVB collapse has been lost in all the discussion of naive tech bros and their questionable banking habits: the importance of the bank, of the tech industry, and of finance to the project of US global power.
As Fortune put it, SVB was the “central artery for financing the startup ecosystem.” Nearly all of the bank’s depositors were young tech firms backed by speculative venture capital — and the bank’s collapse threatened the very survival of both the tech and VC industries. While many have been rightly focused the potential fallout of the collapse for the US banking system, the geopolitical dynamics of these events have mostly flown under the radar.
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