The setting of "Paul's Case" is important to the theme of the American Dream. When the story was first published in the early twentieth-century, the Progressive movement was becoming increasingly prominent in the United States, challenging the damaging economic and social consequences of unrestrained industrial capitalism. In large cities such as Pittsburgh, where Paul lives, the poverty, exploitation, and greed of the Gilded Age were on display for all to see. It was in cities like these that Progressivism received its widest level of support.
Yet despite the growing criticism of capitalism, the American Dream still captured the public imagination, and Paul is as devoted to pursuing that dream as much as anyone. He feels completely at odds with his surroundings—his family, his school, and his social class. He yearns to escape from his humdrum middle-class existence and emulate the opulent lifestyles of the robber barons and captains of industry who display their wealth in patronizing the high arts.
As we often see in American literature, however, the headlong pursuit of the American Dream can all too easily lead people to do things they really shouldn't, and Paul is no exception. Instead of working or studying hard to gain a better life for himself, he succumbs to the temptation of easy money and steals from his employers. Paul is so trapped in this fantasy world he's built for himself that the only way he can live the dream is through theft. The robber barons of Pittsburgh whom Paul so deeply venerates earned their name for a reason. What they did on a massive scale, Paul does at a much lower level. But the abiding moral is the same: the obsessive pursuit of wealth can corrupt and destroy lives.