Reinvestment is necessary to provide the tools for doing anything more than basic subsistence. Without the factories and tools provided by reinvested capital the "people doing actual work" wouldn't be more productive than a hunter/gatherer/stone-chipper or, at best, a Medieval serf.

Two good, readable books on economics are David Friedman's "Hidden Order: The Economics of Everyday Life" (a popularization of his Price Theory text) and Thomas Sowell's "Basic Economics". Sowell's text is amazingly clear and uses no math at all. Economics is one field where textbooks aren't superior - they bury the important principles under masses of usually useless detail.