>For air and land in your typical scenario, there is zero productive work.

Someone has to build the property.

Someone has to maintain the property.

Someone has to own the property and its associated risk.

Someone has to pay taxes on the property.

Someone has to find a tenant that lives in the property.

Someone has to be rich enough to do all of the above, lots of people aren't. So the work gets split over multiple people. For example, a developer wants to focus on building properties, this means he wants to sell the entire property as soon as possible so he can start building the next property instead of waiting for the first property to pay off. This requires a market for real estate. Someone who buffers the stock and makes it available to renters or future buyers.

>What we are talking about is artificially induced scarcity.

How is land artificially scarce? If anything, it is naturally scarce and landlords make it less scarce through vertical scaling of the land. Given enough landlords there will be more housing than people and tenants will have an upper hand during negotiations. How is that not to their benefit? Take any existing housing market and eliminate 50% of landlords. Will this benefit tenants? No, in fact you want more landlords so that they end up competing against each other.

>The important factor here is that each instance of artificially induced scarcity sets up a scenario where the person who owns capital does not have to contribute to the GDP in order to benefit from the profits coming out of the asset. I'm not going to be paying a dime for the house I currently will own or sell. I am simply using a complex financial tool, to redirect wealth towards me.

The fact that outsize returns exist is a price signal that not enough people are doing this. If the risk free return is really as great as you say then everyone should jump into this market and reduce the risk free return until it reaches 0.

>What do you think is going on when "one side" owns property that can house 400 people and just rents it all out? Also who do you think actually allows one person to own more property than they need or to even own air if such a concept existed? The Government.

That is just the consequence of having to build large scale 50 story properties. If such a massive building is needed then it's a necessary evil.

I honestly don't understand your point. Whether an economic system favors workers or capital owners is purely a function of unemployment. Once unemployment is low enough inflation will pick up and completely decimate the ability to have an easy return on capital through unproductive endeavors. You're confusing the current system being unfair with the system always being unfair which is absolutely untrue. There is absolutely no guarantee that it will stay like this forever, if there is enough will power.

EDIT: Bonus plot

Zimbabwe had a land reform around the 00s. Mugabe wanted to redistribute the land of current wealthy white land owners because they obtained this land through British colonialism and thus never paid anything to acquire it and black land owners only got the worst land available. At first the government simply purchased farm land and made an agreement with the UK that it should cover some of the costs. So far so good. 3 million hectares were handed over without any big problems. But for some reason this wasn't enough. The plan was to acquire 11 million hectares but it was impossible to finance so violent repossession started.

There are obvious problems with this. First of all, redistributing all land, all at once is a recipe for disaster. The new owners don't get enough time to learn the ropes of farming. Some of them just become absentee farmers and fail to produce any food whatsoever. Others didn't get loans/financing from banks to start their own farm. So they could never buy the necessary equipment to actually run a productive farm. Worst of all, some people merely joined the program for personal enrichment without caring at all about how their farms are doing.

The government conveniently forgot that although the farms were owned by "rich evil" white land owners, the vast majority of the work was done by black people and they were reasonably compensated for their work. Maybe they deserved more money but they did have a job that paid the bills and let them live an average life in Zimbabwe. The land owner might have been a parasite but he was a parasite that cared about its host (the land).

The new black land owners didn't, because they felt entitled to their new possession. After all they fought long and hard for this, they spent a lot of time protesting, suffering from colonialism and so on. In their mind they already put in the hard work that made them worthy of owning the land which is perfectly fine but the way the land had been redistributed caused massive external damage. There are plenty of ways of making it fair for everyone involved, for the new black owners, for the new white owners but nobody cared. They just rallied for a populist political cause.

Remember all the black farm hands? Underutilized farms mean they end up unemployed. The average Zimbabwean consumer? Without food because production crashed. The government? With a huge deficit because the cash crop export industries collapsed and an obligation to import food from foreign countries. People's wealth? Gone because food imports have to be funded through printing money.

Your primary goal as a nation should be to take advantage of these "suckers" (the white land owners/investors) until you are strong enough to stand on your own feet, not kick them out.