It is the core difference, in my opinion, to the socialist vs capitalist society. Under socialism we all receive close to the same income, which doesn't take money out of the picture completely but does take away a lot of its power. And as many say, as well as you did in your post, may stunt productivity and innovation presumably because people will not be as motivated. Or, maybe they'll be more motivated because they'll persue certain disciplines out of passion and not chasing the dollar.
Then there is capitalism that breeds competition, which we all know can be healthy, but also very dangerous when taken too far, which we see in today's greed. I believe the answer is a healthy balance of the two. How to get there is beyond me. But at least there are many people who are starting to move toward this type of thinking as we see the ugly greed that takes place today.