Oh my, S.T.A.L.K.E.R. and MGS4 inspiration? Yes please. Would a military contractor company (fancy for mercenaries) that became so wealthy and bloated that it is now effectively an independant entity with its own industries, R&D departments and military bases on private islands and other remote locations be a good fit for this world?
TL;Economics is hard and scary: Yes but also not really depending on what company you're talking about and operating under what conditions
Basically because of how international politics, business - and when you merge the two, business subsidies - work, getting something to this point is, to put it mildly, not really possible in the "80s cyberpunk megacorporation" kind of way...
...but you know as well as I do that there's always loopholes to use and abuse in the system. So, to answer my own question, we gotta break it down bit by bit:
Would a military contractor company (fancy for mercenaries) that became so wealthy and bloated that it is now effectively an independant entity with its own industries
It really depends on the industry in question. It might be acceptable in the case of an umbrella/shell corporation which in turn owns several subsidiary companies all under the same industry of broadly "Defense" (i.e. They own one small arms company with one name, another aerospace company under another name, a PMC under yet a different name, but are all operated by the same parent company), but because of how funding and grants work in defense - alongside this tiny little document called The Geneva Suggestion Convention - mercenaries de jure replacing entire defense industries would, in all likelihood, cause a lot of backlash both inside the Military Industrial Complex as well as throughout the general public. Most companies in this era with that kind of influence tended to get broken up pretty quickly, thanks to some antitrust laws. However, there's nothing really stopping anyone from making an umbrella corporation and using plausible deniability throughout the defense industry proper to at least maintain some distance from "The Guys Who Made Your Hunting Shotgun" and "That Mercenary Group On CNN Who Pillaged The Iranian National Gallery Last Week".
You also have to get all that money from somewhere. That "somewhere" is usually governments proper. Most funding from defense contractors comes from those sweet, sweet government grants, and without them, most of our own real-life giant corporations wouldn't be able to sustain themselves to nearly the same degree. With that in mind, it might be an interesting idea to have your PMC proper act as a sort of "army-for-hire" for less well-off/third-world countries, in which you make money and you also take the blame for all the shit that you got ordered to do, and the governments which hired you get to save money via your contract fees and not having to deal with all hubbabaloo of officer schools, training, pensions, maintenance...yeah, you get the gist.
and military bases on private islands and other remote locations be a good fit for this world?
You can already buy private islands out in the middle of the Pacific and Caribbean. Though, do note that these are usually for private, individual ownership, much like how you buy a plot of land out in bumfuck Wisconsin so you can fulfil your lifelong dream of owning a chicken farm. You can technically avoid this by saying that this is owned by, say, the CFO or CEO of the umbrella corporation themselves, and they simply allow the operations of the company to happen on these islands, but keep in mind that both:
- The person who owns the island is paying for any and all expenses out of their own pockets, and can't write them off as taxes for part of the company.
- If shit does down on this island, the person who legally owns it is accountable for it, which is going to cause one hell of a legal headache for them if it's their company in question who committed the fuckup.
