> When your part in wealth creation is having your wealth acquired by somebody else.

That's called "theft". In a free market, transactions are mutually agreed upon. Equal wealth for equal wealth.

> Wealth creation only works when the the money available to buy wealth creating instruments is significantly less than the value of those instruments.

Your statement presumes that "value" is some construct independent of the market. The only "value" in commerce is what someone is willing to pay for it. There is no other useful definition of value.

As for how wealth is created, I buy a canvas and some paint for $50, and paint a masterpiece that Ritchie Rich buys from me for $10,000. I created that wealth. Taylor Swift figured out how to turn her song skillz into a billion dollars. She created that wealth. Musk figured out how to turn hunks of metal into rockets that are quite profitable. He created that wealth. And so on.

> How would markets behave if investment accounts had more cash in them than there were investment vehicles?

Now that is a complex topic. But I'll make a simple take on it. When there is more cash than things to buy, then the value of the cash diminishes. We call that "inflation". Wealth creation does not cause inflation.

As for private equity, nobody is making you invest in it.

In a hypothetical free market yes. But we don't have one. We have k-polies for small k.

I have come to doubt whether free market is even possible.

The rich will use their wealth to ensure (by corruption or otherwise) to bend the laws in their favor.

Wealth has power and they will exercise this power. Why wouldn't they ?