To this end, capitalism is very much a zero-sum game. There are only so many resources to exploit, and once they're gone (or otherwise locked up), that's it for growth.
As a simple example, let's say I have a large bag of peanuts - but I'm allergic to peanuts. And you have a copy of Smith's 'The Wealth of Nations' (which you clearly have no interest in reading ;-)). By trading my peanuts for your book, we both come out ahead and no one is worse off - the trade itself creates value.
Every time any trade/purchase takes place, value is created. Both parties are better off than they were before the trade - otherwise they wouldn't have chosen to be involved in the transaction.
In other words, you're really stretching to use his notion of "wealth" as an argument that trade creates more wealth. Wealth generation does not occur when an item is traded -- it occurs when an item is created, using labor. Smith goes out of his way to say this:
"The value of any commodity, ... to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities" (Wealth of Nations, Book 1, chapter V)
The peanuts in your example didn't gain or lose value when they were traded for a paperback. Nor did the paperback gain or lose value. We merely created a market that defined their values as equivalent. Confusing this process for wealth creation is a big reason why we're in the economic mess that we're in today.
That (the labor theory of value) is exactly what all the classical economists (Adam Smith, David Ricardo, Karl Marx) got wrong.
I've got to defer to the guy who said that internet geeks don't know what they're talking about when it comes to economics.
The "marginal revolution" is one of the major events in the history of economics.
EDIT - here's some useful wikipedia links:
http://en.wikipedia.org/wiki/Labor_theory_of_value
http://en.wikipedia.org/wiki/Marginal_utility
EDIT #2 - paragraph 3 from wikipedia:
Different labor theories of value prevailed amongst classical economists through to the mid-19th century. It is especially associated with Adam Smith and David Ricardo. Since that time, it is most often associated with Marxian economics; while modern mainstream economics replaces it by the marginal utility approach.