YANIS VAROUFAKIS
ATHENS – The recent merger of SpaceX and xAI, a financial spectacle greeted with celebratory yelps from the usual quarters, is a sight for sore eyes. More accurately, it is a sight for eyes still sore from what they witnessed 25 or so years ago, when Wall Street’s perfection of the dark art of corporate mergers sent phoney valuations into the stratosphere, before they crashed back to Earth. As Elon Musk cashes in, we are left staring at a perennial flaw of modern capitalism: a market forever eager to buy its own illusions.
Like all large-scale swindles, this one comes complete with a pseudo-scientific cloak: the touching faith that a company’s share price is the best indicator of its underlying value – a rational predictor of its future wealth, health, and profitability. The fact that the creative calculus behind the $1.25 trillion valuation of SpaceX-xAI went unchallenged can be explained in two words: motivated irrationality.
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