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I know the usual arguments why rewarding value creation is a good idea, and I'm not trying to argue against that. Instead, my first comment points out how markets don't always reward value creation. They do a more complicated and recursive thing. You can think of it as "if your product is awesome but your customers are poor, you're screwed". Only even worse because there's feedback effects, where value creators can become poor just because other value creators are poor etc.
To put it yet another way, in a PageRank-like system the utility will tend to clump together, leading to inequality and monopolies. That's more or less what the system does. The original PageRank had some nasty attractors after people started gaming it, which is why Google is tweaking it all the time. Someone on HN once made a cheeky comment saying "the end game of capitalism is one corporation selling everyone oxygen", and I can see how blindly trusting a recursive system to be fair can get you there.
Also, your St. Paul quote is a famous Soviet slogan, instantly familiar to anyone who was born in the USSR, so I chuckled a bit when you used it to defend free markets :-)
I disagree with your first comment about the $100 and the loaves, as I said, because you are overly simplifying. For example, even aside from the things I already mentioned, you also ignore the fact that the person needs to spend money or goods in order to produce the loaves.
That said, you might be able to refine that example or come up with another; I certainly do not think that markets infallibly have the result of rewarding value creation. I agree that free markets leads to that kind of inequality and that this is a not particularly great aspect of it.... (read more)