Your logic is 100% flawed.
When you have a strong government to pick winners and losers, that influence over the market empowers corporations.
When government gets out of the way and lets the free market work, the power is returned to the consumer.
Sorry, you seem to be using a grade-school model of capitalism. Start-up costs, efficiencies of scale, and established credit give massive advantages to established corporations which they can leverage to limit consumer choice. We have laws against monopolies for a reason -- they come into existence quite readily.
With power over their marketplace, corporations have power over their workers. With no union protections, as long as there isn't universal solidarity or very low unemployment, replacements can be found any worker who goes on strike for better wages. And solidarity on value is a very unsteady thing above subsistance-level.
Why do you think all of our jobs are moving offshore? American wages, protected by the government giving power to the workers, are at a much higher level than just subsistance level. Corporations can choose to go do business in contries that don't have those protections, though, and the American consumer is free to choose those products. And we do choose to buy from those low-wage manufacturers over our high-wage manufacturers. So in a market without government intervention, why do you think the American worker would be high-wage when the American consumer has already proved that he would rather only pay subsistance level?
The free market consumer has already spoken: It says that Americans, except for corporation owners, should all be dirt poor. But oh gee darn we have union protections which enable the workers to "steal" what the rich would otherwise skim off their labor, thereby putting money into the hands of the middle class where it is spent on the middle class economy, which broadens the middle class economy, which broadens the middle class...
See how this works?
Having only two economies -- that of the dirt poor subsistance level and that of the rich, doesn't generate much demand for growth. Subsistance level is determined by our physiology, which hasn't really changed in millions of years. It is the middle class who are the primary drivers as they leverage more than subsistance out of the system, creating an economic level which then grows as it opens up to the poor as economy of scale is leveraged, enriching everyone.
The upper class has its use -- you need someone around who can spend obscene amounts to be the first adopter. But without government standing as a pillar with which people can use as a fulcrum to leverage themselves into the middle class, it won't trickle down.
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