[abalone]

What you're saying is true except for the claim that it has "nothing to do" with supporting commercial enterprise. The fact remains that Silicon Valley is a product of these billions in government spending and wouldn't exist in anything like its current form without it.

What we're both describing is the Pentagon system. The pretext for investment in high tech is that we need it for defense. And then we can just give it away to the private sector because, hey, it's like military surplus.

But it's highly unlikely Silicon Valley would exist without the hundreds of billions in government investment in core high tech. The government invests in nascent tech at a much earlier and riskier stage than venture capital, often billions over a period of a decade or more. There's also the critical role of (usually military) procurement in creating a market for early tech. This is orders of magnitude riskier and broader scale than any private VC fund.

You're biggest error I think is in missing the bigger picture of how this creates a (rather disturbing) feedback loop into war policy. Doing this all through the pretext of military spending means that the public has less control over how taxpayer funds are invested in the economy and the private sector can capture all the profits, using the logic that you articulate. But it also means that we have to keep finding new enemies and waging wars to keep the Pentagon system running.