Hello Woko Haram,
Agreed. So it's OK to set a floor, because without it, and constantly increasing wealth disparity, more and more of society would end up with nothing as time goes by. The end result being lots of people with nothing and a few with everything, a totally lopsided society and a ticking time bomb for a revolution. It's not sustainable.
Generally speaking, wealth is only hoarded when investing it is less desirable. The wealthy invest in a lot of things, and they invest most often when the business environment is most attractive. The more you tax them and the more you regulate things, the less they like to invest.
If we look at the societies where revolutions have occurred due to wealth disparity, the applicable economies tended to be feudalist. This is distinctly different from capitalist. Feudalist societies and economies involve a heavy amount of government intervention that takes from the working class and gives to the wealthy. They also tend to interpret property rights in such a way that significant property is only owned by oligarchies. Most importantly, these societies also have very low economic mobility. This is the most significant factor for why a revolution can occur. If a society does not allow for people to rise in income via business and hard work, then they have no reason to continue supporting said system.
Our system is nothing like these in most respects. However, there are certainly some states that tax people heavily and consequently make economic mobility low. We tend to see this problem most blatantly manifest in NY and California. This is why so many people leave these states to get tax relief and regulatory relief.
Supply and demand holds it back. We are on the cusp of creating machines so advanced that these machines can dream up and create future machines that we can't yet imagine. All they require is the raw materials and the energy. These machines will be extremely expensive at first, but able to reproduce themselves, given the proper facility, materials and energy. Those who spent big money to develop them will not wish to give away the technology. So it will be restricted to the rich. If the public got access to it, it would be transformative. But the laws of supply and demand will hold it back because only a few will be able to afford it, and they won't be getting it to share it with those who cannot pay for it.
Any innovation will be expensive at first. This is because you have to pay for the cost of developing said technology. If there is no period in which someone can reap the benefits of research and development, then why would anyone choose to innovate?
If you want to reform patent laws to have shorter exclusivity periods, that's one thing, but any system that actually allows for innovation will have to follow this pattern of temporary exclusivity and expense.
It is made possible by both. Many of the technological advances we enjoy today came as a result of the government-run space race. Right? That one? The government that can't ever do anything right? Went to the moon. Check. Been there, got the T shirt.
Guess how much technology was the result of World War I and II government war efforts? If you said a lot, you are correct.
When government is motivated to meet a big challenge, it can combine with capitalism and socialism to fulfill big goals requiring ambition, innovation, planning, funding, management and execution.
Space and war are different from most endeavors, in that they don't operate like normal markets. After dramatically changing NASA in recent years, private industry has picked up some of the slack, but space exploration overall is not yet a profitable thing to research. From that perspective, state involvement makes sense. It also poses national security concerns.
Because war involves direct state involvement by definition, it's also not a standard market.
All that aside, having government invest in research through universities is fine. From that perspective, yes, government helps innovation. However, if we look at most industries overall, innovation is done outside of government.