This statement is enormously naive. Bill's money has to come from somewhere so the "everything else remained the same" is just not possible...
Only if you see money as a fixed quantity of dollars. We're really talking about purchasing power here.
Bill Gates invented a way to make anyone who used his products more efficient. (You can do a lot more with Windows than older OSes.)
Since everyone is more efficient, your $1 can buy more. Of course, you will probably choose to give some of your money to Bill Gates, but since the rest is worth more it's a fair trade. (Also, no one can force you to give money to Bill. If you think it's not a fair trade, don't buy Windows; ignoring monopoly power here.)
In formal terms, the economy is not a zero-sum game. Your assertion that "money is like energy, which can never be created or destroyed" is incorrect, if we're talking about the purchasing power of money and not its numerical face value.
You are completely right that what I was trying to talk about was the purchasing power of money - I did try to imply that there are reasons why money can be created and destroyed (this is true for the numerical case as well). It is a valid point that things can depreciate in value with improvement in e.g. manufacturing process, but I think that is quite independent of people making money - Bill Gates is an interesting example because Microsoft have changed the world in that way. A lot of the very rich do not make such contributions so I do not see how their amassing wealth can do anything other than to take away from others.
It seems very fundamental - maybe I miss something, but if you get money (spending power, whatever) it comes from other people. Therefore people can't get richer without making other people poorer.
Is there historical evidence of the deflationary power of operating systems?
Windows has been on the market since 1985. If we're so much more efficient using Windows than not, one would expect a dollar to be worth more today than back in the old, inefficent days of... whatever we had before.
However... in 1985 US$1.00 had the same buying power as US$2.08 does in 2011.
Average annual inflation over this period was 2.86%.
Inflation is a separate phenomenon that occurs through time and can be influenced by the money supply. The government encourages inflation to encourage investment (i.e. prevent people from hoarding cash) and for various other reasons.
I'm only looking at a snapshot: imagine you work for a year in 1985 and spend all your money the same year. Can you buy more or less than if you work for the same amount of time (with the same skills etc) in 2011, and spend all your money the same year? Turns out you can buy much more in 2011.
If you really want to look at the "through time" case, calculate what your $1.00 in 1985 would be worth if you invested it and what it could buy in each case.
Only if you see money as a fixed quantity of dollars. We're really talking about purchasing power here.
Bill Gates invented a way to make anyone who used his products more efficient. (You can do a lot more with Windows than older OSes.)
Since everyone is more efficient, your $1 can buy more. Of course, you will probably choose to give some of your money to Bill Gates, but since the rest is worth more it's a fair trade. (Also, no one can force you to give money to Bill. If you think it's not a fair trade, don't buy Windows; ignoring monopoly power here.)
In formal terms, the economy is not a zero-sum game. Your assertion that "money is like energy, which can never be created or destroyed" is incorrect, if we're talking about the purchasing power of money and not its numerical face value.