The Wealth of Nations Book I, Chapter 9

Of the Profits of Stock

• You might think that when people and companies start to use more and more of their resources to produce stuff, their profits would increase. But it's actually just the opposite.
• That's because the more people there are producing stuff, the more competition there is. In an effort to get people to buy their stuff, people start dropping their prices and their profits end up shrinking. It's great for the people buying their stuff though, because who doesn't love low prices?
• Smith also mentions that countries that are open to trade with other countries always tend to be wealthier because they open their companies to international competition. This ends up driving down the price of stuff.