Well, it is something for nothing. Sort of. The "secret" is that the difference is a result of either technology (advances like the cotton gin and the printing press) that is more efficient or productive, or a result of more intelligent organization (like Wal-Mart having a superior logistics chain). Instead of paying $2.00, and half of it is wasted on non-productive activity, you pay $1.00 for the same thing because it's done better. The difference is used to pay for what would otherwise have been an opportunity cost. It's a net gain.
Everyone who has saved a buck by buying a cheaper leather chair will spend that buck on something else. On the average, a few more cars would be bought, and the laid off worker would be hired at the car factory to meet the demand.
This is the reason the private sector and capitalism is vastly more efficient than government bureaucracy.
To preempt (once again) the argument that Mexico will now have the benefits of productive employment at the factory: yes, but that is only feasible as long as we Americans have our own cost-efficient exports to trade. The end result is that everyone and everything is automatically allocated to where it can meet its best use. In other words, a free market.
I think I've essentially repeated myself four times and it's frustrating.
"The end result is that everyone and everything is automatically allocated to where it can meet its best use. In other words, a free market."
The good old invisible hand, which all conservatives should respect and appreciate.