Movin' On Up

Cafe Hayek's Don Boudreaux takes NYT columnist Paul Krugman to task today over his contention that America's rich get rich at the expense of the poor, and substantiates such an absurd claim by pointing to a piece in yesterday's Wall Street Journal by Stephen Moore and Lincoln Anderson, who show that folks in all income categories have grown wealthier in recent decades.

The problem with the reasoning of people like Krugman is that they believe wealth creation is a zero-sum game, like checkers, where there has to be a loser for every winner. I.e., that there is some fixed pot of money available from which we all draw, where every dollar grabbed automatically leaves one less for someone else to snatch.

Certainly under a socialist economic model or any dictatorship Krugman's ideas make sense. But when it comes to capitalism, where dynamic interactions between individuals specializing according to their comparative advantages create continual opportunities for new wealth, he is simply out of touch.