[noelchurchill]

I'm almost certain there there may be flaws in this though but:

Isn't there a limited monetary supply at any given time? So the richer I get, the less rich other people become. Even after I pay rents and salaries and everything else, if I'm richer than I was before, then there is less wealth available for everyone else.

[phamilton]

http://paulgraham.com/wealth.html

he presents a great example of a couple of friends with beat up cars....

If 4 guys all have old beaters worth 1000 each. in total they have $4000 split evenly. Each has 25% of the wealth. If one guy goes, and decides to fix up his car, and his car is suddenly worth $3000, then suddenly he has 50% of the wealth, and the other three guys only have 16%. But the face value of the other three cars did not change.

That's what screws up the old 80-20 rule... you think it's unfair until you realize that the 20% created most of the wealth they control.

[iterationx]

Imagine you're on an island with $100 split among five people and five goats, each goat is worth $20. But one guy has 2 of the goats and he breeds them until there's 50 goats. So now each goat is worth ~$2. So if the others had done nothing, they could still buy a couple more goats. So if you measure wealth by purchasing power it can increase for everyone.

[jonallanharper]

You've highlighted one of the most important fallacies in the modern liberal's mindset, in my opinion...

PG touches on this: "The Pie Fallacy" in http://paulgraham.com/wealth.html

My 2 cents on it: Wealth is created. Currency is a limited resource that represents that wealth. The value of a single unit of currency is increased every time more real wealth is created. Wealth is created when goods or services that people actually want are produced.

[Locke1689]

You've highlighted one of the most important fallacies in the modern liberal's mindset, in my opinion...

Completely unnecessary partisan drivel. The man asked a question and you made a useless generalization that shows, more than anything else, that you don't understand your opposition's socioeconomic philosophy.

However, you are correct, currency is simply a tangible representation of value. Wealth is not a zero-sum game. Consider a screwdriver. Physically, this screwdriver is simply its raw materials. However, by organizing the materials in the right way, this screwdriver becomes more than the some of its parts and increases its value accordingly. Thus, by selling this screwdriver for its perceived value, one can create wealth in the difference of costs vs. revenue. Of course, a simplistic example, but one that answers the question fairly well.

Edit: Maybe I should cite pg and get on the bandwagon...

[jonallanharper]

And, you are correct; I don't understand the socialist philosophy, it's incredibly illogical.

[Locke1689]

Ah, well, at least you associate "liberal" with socialist. Lots of progress made today...

[pragmatic]

If that were the case, we wouldn't have any more wealth that we did when the country was founded.

Don't confuse wealth with money.

[thwarted]

See http://www.paulgraham.com/wealth.html