There's probably a difference between investing in your own vs in another entity's. In Islamic finance, you aren't allowed to just invest money. You're supposed to have some kind of leadership/skin in the game. like shared ownership. I vaguely recall this from a course I took in law school and I thought it was nice, but a double edge sword.

There's some academic consensus that one reason Europe was able to leapfrog the Islamic world after being behind technologically and scientifically was that Islamic law around inheritance and finance had specific ways property was to be split up, preventing the growth of large corporations.

Contrast with Europe, where the modern corporation was developed, allowing a business entity to be immortal and be controlled by one person at a time via inheritance in perpetuity (if desired).

The modern corporation could grow significantly larger as a result, leading Europe to greater economic power while inheritance law (uncle gets a share, brother gets some shares, sons get some shares, etc.) led to companies closing up or losing power because of the fracturing of control.

ANYWAY, I know that was a semi-tangent, but after a lifetime of learning to master "finance," to learn there's a whole parallel system out there, and different approaches lead to different social outcomes, was eye-opening.

In Jewish dietary laws, they're allowed to have grape products prepared by Jews, but not by gentiles (hence Manischewitz wine, which is kosher because it's made by Jews, versus most wine made by gentiles).

I wonder if this is the same thing: investing in your own military is fine, but investing in defense that is not specifically yours is not.