> money is saved for a part of the population, which will spend it
The money mostly goes to the capital-owning class, i.e. the established rich, who spend relatively little of their incomes. They tend to buy high-quality items with a high purchase price and a low total cost of ownership (Terry Pratchett has an interesting passage on boots), and once you've got enough income you just can't spend it all -- so they spend a much smaller percentage of their incomes on job-producing things than the poor. (Here, "the poor" includes the middle class and noveaux-riches, who tend to squander money on mortgages -- and on gaudy short-lived consumer goods, like Teslas).
The rich tend to reinvest money instead of spending it, and typically live well within their means. It's not a bad way to live, as an individual (although you need some self-control and relatively modest tastes); but it has problems when most income goes to people who live this way. A lot of money ends up chasing few investment opportunities -- a situation that should sound familiar from the financial news.
> The money mostly goes to the capital-owning class
In a free (and not colluded) market, end prices will go down. Profits will depend on the market, not differently from the effects of economies of scale in general.
> The rich tend to reinvest money instead of spending it
Investing money and spending it is practically the same, from the perspective of the economy.
The money mostly goes to the capital-owning class, i.e. the established rich, who spend relatively little of their incomes. They tend to buy high-quality items with a high purchase price and a low total cost of ownership (Terry Pratchett has an interesting passage on boots), and once you've got enough income you just can't spend it all -- so they spend a much smaller percentage of their incomes on job-producing things than the poor. (Here, "the poor" includes the middle class and noveaux-riches, who tend to squander money on mortgages -- and on gaudy short-lived consumer goods, like Teslas).
The rich tend to reinvest money instead of spending it, and typically live well within their means. It's not a bad way to live, as an individual (although you need some self-control and relatively modest tastes); but it has problems when most income goes to people who live this way. A lot of money ends up chasing few investment opportunities -- a situation that should sound familiar from the financial news.