A) You do know that the economy isnt' a zero sum system right?  That wealth is constantly being added or subtracted?

B)  Almost nobody feels rich.   Most rich would self identify themselves as "Upper Middle class".   Most poor usually identify themselves as "Lower Middle Class" as well.  In general we're programmed to think of ourselves as near a baseline.

Four out of Ten Millionaries don't feel rich.

http://www.reuters.com/article/2011/03/14/us-fidelity-survey-idUSTRE72D3RK20110314

"The fact that we’ve improved productivity so dramatically over the last century is also the reason why the poorest people today have a better standard of living than the vast majority of people a century ago." Are you sure about that? I would say the lot of the poorest today has not improved over what it was to be poor a century ago (1911). At least it hasn't improved in the same proportion as the fortunes of the ultra rich. Have you seen the impocverished conditions of the poorest of society? Even the poorest of American society? I haven't visited those neighbourhoods in America, but I've seen them in India and Thailand.

"Now, with that said, why does wealth have to come from screwing people over?"

It doesn't have to, it shouldn't have to, it just does. It's how the world works at the moment. But it doesn't have to keep working that way.

"If I discovered an inexpensive cure for cancer tomorrow, charged people a fair rate for the treatment, and made billions of dollars as a result how would I have screwed anyone over?"

You wouldn't make billions. You'd be a research scientist either in a university or at pharmaceutical company and you might get a salary bonus for the year, and a mug saying "I found the cure for cancer" but the billions would go to the company, i.e. you'd be the one who got screwed over. If you happened to be a start-up and you got lucky, you'd soon be bought out (for a tidy sum of money meaning you wouldn't have to work another day in your life if you didn't want to), but again the billions would go to the pharmaceutical company who bought you out. And likelihood is you'd find this cure in some plant extract from a tropical rainforest. Guess who'd get screwed over then?

I have huge respect for Warren Buffett. He seems like a really honourable bloke and he's mega rich. But I don't for a minute believe that he didn't invest in some companies that used oppressive employment practices or environmentally damaging business activities to ge those profits and shareholder values up. I think it's doubtful he ever screwed anyone over directly, but in some of his investments the returns he got and the wealth he accumulated resulted from people being screwed over.

I'm not sure what the point of your point A) is. That's pretty much a given. However I've heard some economists say that there has been no true economic growth since the late '60s. What looks like growth since then has basically been achieved by going into debt and the interest accumulated on that debt has negated any apparent growth that's been achieved from the borrowed amount.

As to your point B). That there is the problem. Those of us who are among the richest 10% (hell even the richest 20%) SHOULD feel rich. Why don't we? because there's stuff we don't need that we want but that we can't afford, and we also know that our material situation is quite fragile mostly because we are all in debt up to our eyeballs (mostly from having a mortgage). There's bound to be plenty of other factors. Those who are poor who think of themselves as lower middle class don't realise how badly off they are, they seem to be living on some kind of social hallucinogen but all the while they still suffer from the various ill effects of poverty. They think that because they aren't homeless they are living a prettty average life.

As one Australian put it: when he was a kid in the 70's his dad worked, and his mother didn't. He dad had a median wage sort of job. They could afford to throw a steak on the BBQ whenever they wanted and they lived a comfortable life. Now someone with a family doing the same level job can barely make ends meet and inevitably both parents need to work to get ahead. Is that really economic progress? Seems kinda arguable to me.

The problem with that statement is that is very, very inaccurate.

If you have a 2-income home and cannot make ends meet, you have a problem. Period. I've ran the numbers over and over again, and the reality is that a two-income household, even earning minimum wage each, working 40hrs/wk should be doing rather well for themselves as long as they didn't live a lavish lifestyle.

The reality of differences between Mr. 1970's and Mr. and Mrs. 2011 is that Mr. 1970's didn't have massive credit card debit because he had to have the newest HDTV, car, or PC. Mr. 2011 usually does. In 1970, the average family had a credit card burden of under $300. In 2008, it was $8,000 USD. At an APR of 19.9%, that means that each US household is paying $2,000 a year just to service their credit card debt, much less buying needed things for the family! Additionally, credit card debt as a percentage of household income has risen from 3% in 1980 to about 15% in 2000 and has held generally steady since then. This has a huge draining effect on the health and well-being of the poor and middle class household.

This is just one example, but there are many when it comes to comparing the household of the 1970's to 2010, but the reality is that spending habits are vastly different which causes a lot of strain. I've seen it personally, and can attest to its negative effect on income and savings... Among other things.

I think your problem is... neither A nor B of your statements are true...

As for A Economic happens whenever there is an increase in wealth, so every new big invention like say... personal computers have created wealth and an increase in the economy.  It's pretty absurd to think there hasn't been any wealt growth since the 60's.  I can only think you read an exaggeration or just misread something.

As for B.   That most the top 10% don't feel rich... isn't a new occurence.  It's basically a psychological truism.  It's fairly new for Millionaires, but only because millionaires were rare in the past.

Anyone who is well off, will likely get adviced by their accountant to incorporate themselves, and set up a business, in order to change how they are taxed, and keep their taxes as low as possible.

As far as why the comparison, someone said that rich people pretty much cheat to get where they are.  I commented to that by saying people who are rich play by different rules than people that aren't.  This is what I was commenting on.  Individuals incorporate themselves.  And it was in response to this quote:

Galaki said:
To get rich quick, you don't play the rules.

And, with this trend reversing, look for economic activity to slow down.  A large chunk of economic activity in America, which also then impacts China and any nation importing to America, is going to be affected by this.

Doesn't change the fact that we have to pay the piper for our actions. When you do stupid things like wrack up needless debt via mortgages, credit card debt, and student loans, you will have to pay as well as those that live off of your purchases.

Consumer spending will plummet, builders will get laid off, and colleges will go without students. But the reality is that in doing such, our economy would grow in other ways that would make society better. Many pine about the 'good 'ol days' of the middle class, without realizing the sacrifices a generation took to get where they were in terms of income equality - it wasn't something that someone waved a magic wand and it happened... It took sacrifice, something our society at large doesn't understand.

And lets face it, many nations impacted by this such as China do deserve it. They've forced one-party solutions on their fellow countrymen and have de-valued their currency to make it more attractive for the American consumer gravy train. Its partially their fault for this mess, and they will pay the piper too.

My comment was clearly about western developed economies, and it can't be related to third world or undeveloped nations primarily because they are not developed and have therefore not gone through the transformational productivity increases. As for the impoverished in American society:

The poor have a vast array of luxuries that didn't even exist a century ago, and their adoption of these luxuries tends to lag typical Americans by (roughly) 10 to 15 years; and the typical American tends to lag the adoption of rich Americans by (roughly) 10 to 15 years.

Personally, I find it remarkably ironic how many people are protesting the inequity of capitalistic society by tweeting from the $600 iPhone or iPad on their $50 to $100 a month phone plan ...

Except it doesn't work that way ...

Most of the most wealthy people in the world developed their wealth by creating companies that produced products at prices people were willing to pay, and people willingly worked for these companies under the working conditions that the company established. Certainly, there are questionable practices when it comes to speculation in the economy (most of which can and should be dealt with) but speculators are not representative of the majority of wealthy people in our economy.

If I had a start up how am I getting "screwed over" if I choose to sell my company for the amount another company is willing to pay? Simply because someone else got significant (potentially greater) benefit from a business deal does not mean that you ended up getting a bad deal ...

It is interesting that Warren Buffett was consistently on the lists of the most corrupt capitalists when liberal activists compiled them, but simply by calling for income tax increases on the wealthy (remembering that he doesn't pay income taxes) he becomes the most respected capitalist of the left overnight.

you are not really any of this things, are you?