Earlier quoted context omitted.
I tend to agree, but there's a missing element in this economic model, though one that others have mentioned (cf. sunahsuh's comment): marketing. If you look at Marx, or even Smith, it's clear that the wants and demands of the consumers are not always organic, but are often fabricated by the companies themselves. Smith thought this was cool, Marx thought it was evil; in any case, you are right to some extent, but few…
I'm not so sure Smith thought it was cool: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same…
I was talking about fabricated demand, which I don't have a quote for because I don't have my notes or copies of Wealth of Nations or Theory of Moral Sentiments with me at the moment. But my basic argument, even if he didn't explicitly treat the subject, would be that fabricated demand is an accumulation of capital, thereby increasing national opulence, which Smith holds as the highest good.