New technologies = new wealth; or the rich get richer, but the poor don’t get poorer *UPDATED*

One of the great Marxist fallacies is that there is only so much pie to go around.  We know that changing human efficiencies put the lie to this, but the liberals still live in a small pie world.  That’s why you end up with Robert Reich, who ought to know better, trying to compare today’s economy to that in the 1970s.  John Steele Gordon puts him firmly in his place:

Reich simply ignores the fact that whenever there has been a major technological development, from the full-rigged ship in the 15th century to the microprocessor in the 20th, there has always quickly followed an inflorescence of fortunes based on the new technology. This, inevitably, causes income inequality to widen. The poor don’t get poorer, the rich just get suddenly much richer. The more fundamental the new technology is, the more the gap will widen, and the microprocessor is the most fundamental new technology since agriculture 10,000 years ago.

Read the rest here.

UPDATE:  This very silly video, of a woman returning to the workforce after 30 years, nicely illustrates Gordon’s point: