Strictly speaking, however, capitalism does increase the size of the pie
That depends on the pie. It increases the size of the economy, but not the ecology, of which the economy is a part.
When the economy bumps into the limits of the ecology, as is beginning to happen now, you have a problem on your hands.
Of course there are ways people could live equally or more enjoyable lives without as many material inputs. But that ability wouldn't correspond to "wealth" as presently understood, namely: the means of buying stuff. You inevitably run out of stuff to go around.
-- "Hige sceal þe heardra, heorte þe cenre, mod sceal þe mare, þe ure mægen lytlað."