You want the incentive to get rich and then have that incentive fall off as you acquire more wealth.
The list of enormously valuable privately developed technologies goes on and on- in fact, almost all technologies. Many of these developed in the 1800s and early 1900s when there was very little government spending on research/etc. For example, oil, railways, cars, etc.
Even in cases where government research did help, often the practical realization takes a lot of money!
P.S. Companies are not necessarily collectives. It depends on the ownership structure.
Did you know that their entire aviation industry was based on technology copied from a B-29 bomber that made forced landing in Russia?
Yes, but people like examples. There are plenty more. N Korea, for example. China, when they had collective farms. It goes on and on, to the point were I can't find any examples of successful collective farms.
> It was an incompetently managed and corrupt state
Nobody has ever managed to create one otherwise. State run economies are always a mess.
Consider all the innovations that come from Bell Labs, Xerox, Kodak, Boeing, Microsoft, Amazon, Apple, Google, Nvidia, RCA, US Steel, Ford, General Electric, industrialized agriculture, Dow Chemical, and on and on and on.
Every modern economy is a mixed economy where you have some private funding and collective funding, some collective ownership and some private ownership. Countries that try to embrace either extreme of all private or all public end up collapsing. Arguing between either extreme like it's some moral dilemma is kinda pointless.
The thing that works is a little of both. It's actually kinda funny, when someone argues for extremely wealthy individuals pushing the country forward by making unilateral economic decisions you end up arguing for a form of central planning. But massive wealth consolidation isn't doing anything for you when the rest of us are fighting over the scraps.
This is the "fixed pie" view of the economy, i.e. if someone has more, that means others have less. That may be true of socialism, but in free markets it is not true at all.
Wealthy people create wealth, they do not "consolidate" it.
If I go to Home Depot, buy some wood, make a table and sell it to you I created wealth, I didn't take it from you. If you planted an apple tree, harvested apples and traded them for the table, you didn't take wealth from me - you created the wealth.
PS. I don't think it's a coincidence that both of your examples of creating wealth are typical "poor people" jobs. Obnoxiously wealthy people rarely create anything because they can simply pay someone else to do it, usually for a fraction of the value of their output.
That's the Labor Theory of Value perspective. What actually happens in those cases is the particular jobs being done are not that productive. Consider if you could pay someone $10 to do $100 worth of work. Inevitably, your competitor sees you making this easy money, and entices your worker away for $11. Then you entice him back for $12. Then Fred entices him away for $13. See where this is going? The wages go up until it is barely profitable to employ the person.
> Obnoxiously wealthy people rarely create anything
What they do is conceive of it, finance it, and manage it. Those are critical wealth-producing activities. Start a company yourself, and this will quickly become apparent.
> is rarely distributed among those who actually do the work
Scores of millions of destitute people immigrated to America in the 19th century and moved up into the middle class and beyond.
Also, free markets do not "distribute" wealth. Again, that is the fixed pie viewpoint. The actors in free markets create wealth.
> Predatory pricing,
I.e. offering lower prices. Nothing wrong with that.
> regulatory capture
That's a problem with government, not free markets.
> and buying out competition
Nothing wrong with that, either. Lots of conglomerates become so complicated they collapse, and new competitors always spring up.