Our in-house economists can correct me, but I believe the quotation was designed to reflect a short-term phenomenon.

In a market setting, the rising prices and profits tempt the producers to increase production. Those rising prices and profits also attract new producers into the market. Both of those developments reduce prices and profits.

Eventually, production will settle at a level beyond which the marginal cost of additional production is too high.

I don’t think the writer was implying that capitalism encourages producers to place an artificial cap on production.