this post was submitted on 24 Jul 2026
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Investment provides resource allocation, which is not something that just happens on its own. That is, it says "this company or project is a worthwhile project to allocate capital to, and this is not". The money here was also not invented out of ether, but rather lost by investors who shifted capital to SpaceX earlier, and gained by those who tried to shift capital away from SpaceX earlier; other investors came to agree with those shifting capital away. Those who do so earlier are rewarded; this encourages earlier efficient movement of capital.
Resource allocation is a necessary part of economic activity; any economic system will require such a thing to be done. You could have your government do it instead of investors, as in a command economy. Countries generally don't do that, because it has run into more serious problems of misallocation.