Consider a house, the builder sells it once, but it gets bought and sold on average every 7 years subsequently.
These don't apply to all big ticket items, but since you mentioned houses, I thought I'd flesh out the picture on who benefits from buying/selling activity.
It's worth noting that all of these people get paid, regardless of whether the home seller made money or lost money on the home (or how much). So in a strong market, they will get a small share of the gains. But in a down market, the seller may make nothing, while these service providers all get paid.
There's an entire industry of artists making art to sell to the Richie Riches and Willy Wealthies of the world, and this has been going on since antiquity. Why do you think all that medieval Italian art was created? It was rich Italians patronizing the artists.
The same with real estate. In the meantime, while someone owns a house, they gotta pay others for insurance, repairs, maintenance, taxes, etc. Even buying the house will cost you 6% going to the starving real estate agent. Owning a house is very expensive, not counting the purchase price.
Meanwhile, the people spending all that money are the same people setting things up to ensure that surplus flows back to... themselves. So the wealthy people spend money, the people who manufacture their stuff and provide their services get as little surplus as possible without inciting them to riot, and the remainder goes right back to some other wealthy person, and then the process repeats.
There's no guarantee that surplus/welfare/utility flows along with the money, and it should be obvious to any observer that it definitely does not in practice.
The tired old argument that wealth accumulation doesn't really exist because the money all eventually goes "back into the economy" has always been an insulting hand-wave that is neither a principled model nor in agreement with basic facts about the economy.
The government, on the other hand, gets money by taking it.
Its missing, because it is mostly not true.
The wealthy predominantly get wealthy by getting other people to create wealth, and taking it from them via contracts relying on imbalances of power and econonic coercion (in a fairly benign modern capitalist system; is less benign, less modern, emerging (or pre-) capitalist systems, the coercion is often jist direct threat or application of force rather than the economic coercion of the inherent precariousness of the working class in capitalist society.
Everybody in a business is creating the wealth of the business, and they get their share of the created wealth in the form of pay and benefits. Unsurprisingly, their compensation is in proportion to the value they add (i.e. the wealth their contributions create).
It is not a system based on forcing anyone. The cooperation is voluntary, with their compensation set by supply+demand.
Power imbalance does not make for informed consent.
But they aren't. Only 1.5% work for minimum wage.
1/100 and 1/1000 is different, but the difference isn't that big.
Your overall point didn't make any sense though. "Lots of people don't earn minimum wage" doesn't mean that there isn't any power balance.
There is no power imbalance. If a worker produces a lot more value than he costs, he simply goes to another company that bids higher for him.
People who don’t work for minimum wage are still facing the same basic constraint.
That's clearly not true. It's just ussually very hard to quantify how much wealth every individual is creating and it becomes even harder as you go up the chain of hierarchy.
> Unsurprisingly, their compensation is in proportion to the value they add
Well... that's a strong statement and generally incorrect, at best their compensation if bounded by the value they add (not that it's easy to measure in most roles). Supply+demand (as you said) is what determines compensation in 95%+ of all cases.
Supply+Demand certainly does determine employee compensation. But consider that there is no demand for workers who would cost more than the value they add. If the worker was producing far more value than he was paid, then the worker will be enticed away by some other business offering him more money.
So, you can see how S+D nudges employee compensation towards being paid according to what value they produce.
In general yes. But as as some of the venture capital funded growth companies have shown us in recent years these values can stay detached for quite a while.
But yeah over longterm I'd you to be mostly right.
Wealthy people accumulate wealth by many means. Creating wealth is only one of those means. Nor is wealth creation incompatible with the model I described.
> The government, on the other hand, gets money by taking it.
Who said anything about the government?
But if you want to argue that point, the government may create wealth just like any private individual or enterprise. In fact, it does create quite a lot of wealth, in the form of public services and overcoming various incentive problems of private industry operating in free markets.
Of course, governments do levy taxes in order to fund their activities. But you can't seriously argue that tax revenue is "taken" from the economy and also argue that wealth accumulation does not exist because wealthy individuals' money is not "taken" from the economy.