Does increasing your military tech have the effect of reducing the amount of military available on the private market?

no, amount of land, and amount of military that you had available to purchase before logging off / logging back in. if you bought out your PM of a unit then log off... and then you login after x amount of turns/time pass by, youll have your max amount available to buy until a turn passes, then decay will occur.

What do you mean by "decay will occur"

On your private market, you accrue an amount of military per turn, and you also lose a percentage of your existing military every turn (decay), and this decay is based on the last time you "logged in." So it has an equilibrium point if you were to login (view a page in your country) every single turn whereby your accrued military would very closely equal your decaying military, and as such your private market would remain almost completely static. What LittleItaly is trying to say; if you buy out your entire private military such that you have 0 units, then there will be no decay (as long as you stay logged out, don't view any page in your country), however the amount you accrue each turn is static. This knowledge can be manipulated when you are going to make a big jump with a lot of stock, and you plan to use your private market almost exclusively to jump, which is a fairly common tactic.