That is what has enabled us to move beyond an economy where 97% of the workers worked on the farm raising food. That's down to something like 2% now. The rest of us can now do other things like make cars, computers, and software.
You may disagree with his thesis, but let's not pretend he's a naïve bumpkin when it comes to economics.
1. I'm not a big believer in saying "this person won this award so their argument must be well thought out". Even geniuses can make stupid arguments.
2. Krugman is an ideologue and people like that tend to ignore facts that don't fit their world view. So he doesn't have to be a "bumpkin" to not realize an obvious fact he just needs to not want to see it (just one example: http://tomstechblog.com/post/Another-Defense-of-the-Paywall....)
"Consider: A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that’s more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success?"