Someone having money doesn't preclude someone else in the economy from CREATING VALUE. Hacker News is a site filled with people who understand that it's possible to create value out of nothing. Your scenario is impossible, but assuming someone acquired all of X currency and refused to let anyone else have any, that currency is effectively nonexistent - currencies are only worth what they can be exchanged for. People would trade using something else.
People would, but that wouldn't alleviate the overarching economic failure of excess concentration. Look at places like North Korea; there's an underground economy, but virtually all economic power is vested in the state, with dreadful effects for the population at large. Well, you say, that's not a free society in political terms; but preservation of ownership is essentially a political good. Indeed, it's one with a high cost for the American economy:
http://tuvalu.santafe.edu/~bowles/GarrisonAmerica2007.pdf
Of course, even at that point the remaining humans can just form an economy among themselves which the rich man doesn't participate in...