, linked to in an OWS discussion as an example of 'creating wealth' talks about the net worth of Apple as if it is $350 billion that comes from nowhere
, except for the genius of Steve Jobs, of course. Thinking of wealth as something that can be created from nothing breaks my brain a little bit. My understanding of money is that it represents purchasing power that entitles you to a 'share' of the available resource-based production. Therefore, if Mr. Warren Buffett gains 1 billion dollars this year, and my wealth remains constant, my ability to purchase material things should go down as I proportionally now have fewer shares of purchasing power.
I started to think about this while watching The One Percent, in which Milton Friedman defends the enormity of change of the average income of the wealthy by saying that also the average income of the poor has gone up. He then promptly shuts down the interview and ejects Jamie Johnson, but that is here nor there. This seemed disingenuous to me; if the wealth ratio of the rich to the poor goes up, doesn't that mean that they are gaining disproportionately more purchasing power and that the poor are actually getting poorer?
Please explain to me how wealth can be created, a la "poof," and how this miracle affects the wealth of others. Forgive me for never having read an economics textbook, but the defenses of the income disparity that I see brought up repeatedly seem wanting in common sense.