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Although you may not have been implying it, saying the capital is being "lit on fire" makes it sound like the money vanishes into thin air, when that's not tech

Although you may not have been implying it, saying the capital is being "lit on fire" makes it sound like the money vanishes into thin air, when that's not technically the outcome. Even if the capital is given to/spent by a failing company, that money is at least still mostly spent on either materials or labor, which means it ends up back in the economy but somewhere else. Obviously not the most efficient use of that capital if its being invested in poor companies, but it's not vanishing into thin air.

quickthrower2 3y ago
But it is a waste of resources if they have to chuck stock in a landfill. Probably not what is happening here. More like some winners and losers at the craps table.
- KoftaBob 3y ago
  Yeah that's true, that's an example of true waste for sure.
- Ekaros 3y ago
  As long as they don't brick the devices it might not be so bad. The spend was likely not optimal. But there probably has been worse cases see the likes of Juicero.
elliotto 3y ago
Is this like one level of abstraction from the broken window fallacy? Investing money in window breaking companies rather than just windows (to be broken).