Yeah but it isn’t something new. When you lend friends or family money, you still count that as your money and expect it to be paid back (whether with interest or not). But the person you loaned that money to also counts it as their money and spends it as needed. Ideally, the borrower is able to make better use of it than the lender, and the arrangement leads to a net positive for both parties.

Yeah money actually does disappear. Banks don’t need to hold all of their deposits in reserves, they can lend them out. So 1 real dollar can act as multiples of that in the economy by people depositing and loaning it out in succession. This only works if there is confidence that borrowers can pay back their loans. When that confidence breaks down, as we saw in 2009, then businesses are unable to borrow for payroll and other expenses and the whole economy contracts. You can then try to print money to stimulate the economy, but that will lead to inflation.

We only need to look at human history, and animals in general. The power of an individual is very limited, so those with shared interests group together for protection. The bigger and more powerful groups dominate the smaller and weaker ones and power naturally concentrates into the modern nation state, political party, corporation, etc. And whoever controls those groups holds the most power.

Your perspective requires that all humans be willing and able to come to mutually acceptable compromises for any disagreement. But that’s obviously not possible, there are many disagreements where humans can’t just split the difference or are simply unwilling to make any compromise for whatever reason. And so power becomes the deciding factor.

A few people will always end up with all of the power, it’s how its always been because that’s how our species works. Having mechanisms for choosing these people peacefully is better than a free for all power grab.