But as a matter of fact, that's not what happens. What actually happens in the actual real world is:
1. The owner of the company doesn't keep all the profit -- they share out the vast majority of it. (Look at the retained profits vs gross margins of any company you can think of. Look at the wages that you, yes I bet you yourself, are paid).
2. When we don't do it this way, we don't actually get the innovation. The thing that incents people to solve the problems of bringing new products to the public (the very large problems, the problems they can spend the majority of their lives attacking) is the possibility of reward.
1 depends on the industry, some industries are low-margin while others are high-margin. Either way, why don't the people who generated the profit, the workers, get to decide how the profit is divided?
2 isn't true. Not only is most innovation funded by taxes and conducted by public institutions, but it's the market that drives iterative and combinational improvement on new inventions and you can have markets without capitalism. Capitalism is the division of people into capitalists who own the means of production (traditionally factories but nowadays increasingly IP), and workers who work them for a wage. The first step in moving in the right direction, IMO (I'm keen on incrementally and cautiously implementing improvements) would be to ratchet up the number of cooperatives operating within the economy. They're more likely to survive than corporations and they're more empowering for workers.
1. The owner of the company doesn't keep all the profit -- they share out the vast majority of it. (Look at the retained profits vs gross margins of any company you can think of. Look at the wages that you, yes I bet you yourself, are paid).
2. When we don't do it this way, we don't actually get the innovation. The thing that incents people to solve the problems of bringing new products to the public (the very large problems, the problems they can spend the majority of their lives attacking) is the possibility of reward.