It’s official — Tesla’s stock market value has topped $100 billion. After a heady three-month surge, the electric car company’s stock reached $571 this week. If things keep up, in six months Tesla CEO Elon Musk will be in line for a $346 million bonus.

For the short sellers who have lost billions in the past few weeks, Tesla’s recent ascent is a painful surprise. But they can be forgiven for their misjudgment — the last couple of years have been rough for the company. Musk got in trouble with the Securities and Exchange Commission for illegal tweets and got sued by a British Good Samaritan who objected to being called a pedophile and child rapist. More broadly, the electric car manufacturer has been plagued by more nuts-and-bolts problems, its struggle to meet production targets.

Things are coming up roses for Tesla in 2020, however, which raises the question: How is it that a company whose electric vehicles struggle to make the trip from San Francisco to Reno, and makes a fraction of the cars produced by General Motors, is the most valuable car company in the world by market capitalization? (GM is still worth more measured by enterprise value.)

At the risk of stating the obvious, Tesla’s valuation is not a result of it being a great place to work or a smoothly functioning institution. Tesla workers say life at the company, particularly on the production line, can be hellish, rife with sexual harassment, racism, homophobia, forced overtime, and frequent workplace injuries. A 2018 investigation of Tesla published in Wired told of Musk’s rampages and “rage firings”; according to one former executive, “everyone in Tesla is in an abusive relationship with Elon.”

Instead, the Financial Times offers three possible reasons for Tesla’s monster valuation: Tesla’s successful entry into China to produce cars for the Chinese electric car market and more broadly its “more reliable financial and operational performance” of late; the future potential for the Tesla fleet to serve as a robo-taxi service; and, finally, Musk’s claim that the company could make mountains of money selling its batteries to other markets.

The first explanation is in some respects the most reasonable. Yet it’s also the least believable. Successfully producing and selling cars makes Tesla a lot like every other auto manufacturer (GM and Ford have long produced in China) — in other words, pretty boring and not warranting a surging share price.

The second and third reasons make more sense, though not necessarily because they accurately predict the company’s future moneymaking strategy. Tesla’s scheme to have its customers — who have paid upward of $90,000 for their cars — rent them out as self-driving taxis during the day while they are at work is pretty implausible.

Tesla’s plan to become a mass battery manufacturer is more credible than robo-taxis, but it isn’t yet in the works, so we can add it to the list of other Musk promises: solar roof tiles, hyperloops, “fully self-driving” cars, the Tesla Semi, and electric planes, to name a few.

Rather, these reasons are more informative because they capture the irrationality of present-day capitalism. They demonstrate the absurdity of a system in which the value of companies rests as much (or more) on their ability to tell a good story as it does on their actual track record.

In today’s economy investment decisions are the privileged domain of private capital. Decades of financialization, deregulation, and corporate welfare have created an environment of easy liquidity in which hedge funds, private equity firms, and other investment companies are flush with cash. This windfall of cash is not the result of some natural process. The money has been handed to Wall Street, particularly over the past decade, through explicit government policies such as quantitative easing, which pumped trillions into financial markets, and Fed-engineered low interest rates.

Yet companies are essentially allowed to do whatever they want with this money. Desperate for a fat return, investors dump cash into anything that looks like it could be the next big thing, or on the flip side, trigger a fire sale at the first hint of failure. The result is a speculative mania — intense FOMO and a short-termism that prizes shareholder returns above all else.

This is not just inefficient, it’s profoundly undemocratic. Society has no say over how all this capital is being allocated. While the masters of the universe play the odds, the rest of us are scrambling, trying to figure out how to slow down the looming ecological catastrophe, how to mitigate the growing chasm between the rich and the poor.

As the Tesla example shows, capital is not being invested rationally or with an eye toward the social good. Investors, who are easily swayed by snake oil salesmen peddling exciting visions of the future, prioritize making a quick buck over long-term growth and development.

The money necessary to implement a Green New Deal or provide health care and jobs is there — it’s simply being given away to the Wall Street casino. To build the future we want, we need to grapple with not just redistribution, but how to democratize the allocation of capital. In short, we need to socialize finance.