An Ethical Exploration of Defense Investment
By Faris Hamadeh
In recent years, defense spending has made a strong comeback. Governments, markets, and investors seem aligned in a narrative that places national security as an unavoidable priority. But amid this trend, one must ask: are we witnessing a rational response to a more dangerous world, or are we simply jumping on the bandwagon of what is now considered acceptable?
It’s undeniable that the geopolitical landscape has changed. Since 2022, international tensions have risen, and governments have shifted their priorities. As Patrick Schneider-Sikorsky, partner at NATO’s Innovation Fund, recently stated: “We are not entering a war economy. But the idea that peace is the default state… that was the anomaly. We’re simply returning to the old normal, where defense and security are central.”
Financial markets seem to share this view: the Aerospace and Defense sector is leading European equities in 2025.
The “bandwagon effect,” well documented in psychology, describes our tendency to accept something as morally valid when it becomes socially common. Defense investment, once taboo, is now seen as modern, necessary, and even desirable.
Even more surprising has been the defense industry’s ability to reinvent itself: from being an opaque and almost clandestine sector, it has come to represent the cutting edge of “techno-cool.” Sleek, shiny weaponry, designed with an “AI-first” approach by a new generation of military tech startups, has added a new component to the equation: desirability. Weapons of war now look so appealing that venture capitalists are as excited about these companies as they were about Tesla a decade ago.
If you Google “Anduril weapons Palmer Luckey,” you’ll see images of Anduril’s founder posing with his next-gen weapons, wearing his signature Hawaiian shirt and flip-flops. That casual, almost playful aesthetic—more fitting for a festival than a war industry—conveys a disturbing image: weapons are no longer just tolerated, they’re celebrated. Luckey appears as a Silicon Valley “tech bro,” smiling and relaxed, surrounded by drones and automated turrets, as if presenting the latest consumer gadget. War, wrapped in startup aesthetics, becomes desirable.
Few would argue that governments don’t have an ethical obligation to protect the lives, liberty, and well-being of their citizens. Hence the argument that defense investment serves to ensure deterrence or response capabilities against threats.
But before we, as private investors, start investing in arms manufacturers under the banner of self-preservation, we must make several important distinctions between different forms of defense investment.
First, we must distinguish between government and private investment. A government’s duty is to protect its citizens. A private investor’s duty is to generate profit. These are very different mandates, with very different moral paradigms.
As private investors, we must carefully reflect on whether we want to profit from war. Few things better encapsulate human suffering than war, where human life is destroyed—literally and figuratively. Take the case of a weapons manufacturer: we can assume that the more weapons sold, the more suffering caused, and the more profit the investor earns. This seems, undoubtedly, a perverse alignment of moral incentives. One could argue it represents impact investing in reverse: instead of seeking positive outcomes for people and the planet, profit is derived from harm. Of course, not all investors are impact-driven. Using religions as a reference for “ethical best practices,” all major world religions emphasize the importance of not profiting from others’ suffering or misfortune, even if not specifically in the context of defense. From Buddhism to Christianity, major religions explicitly discourage profiting from others’ pain. Mensuram Bonam, the guide developed by the Vatican’s Pontifical Academy of Social Sciences for aligning investments with the Church’s Social Doctrine, explicitly discourages profiting from the production or distribution of weapons—especially those that fuel conflict or human rights violations.
Not all “defense” investment is the same. Funding early warning systems is not the same as funding long-range missiles. Yet the industry has managed to group everything under the umbrella of “defense,” thereby diluting the ethical implications of each type of technology. This linguistic maneuver, as impressive as it is sinister, allows even offensive war weapons to be classified as “defense.”
One need not be a pacifist or abandon Realism to recognize that private investment in “defense” is far more morally questionable than its advocates suggest. Accepting the inevitability of conflict as a sad reality of human existence is very different from profiting from it. Every investor should critically and carefully reflect on whether that’s the kind of bandwagon they want to jump on.