profit margins will continue to get thinner and thinner as competition increases

Competition doesn’t increase under capitalism, it decreases as a consequence of economy of scale, consolidation of markets, corruption and many other reasons. Tell me how competition fosters when Amazon, Google, Walmart, Apple, Uber and the rest of big firms control all their respective markets.

Your second paragraph is a senseless utopian dream not based on reality, I won’t even bother arguing against it.