It seems to me that Capitalism is the best way to distribute goods and services and to encourage the development of new products and to generate new ideas.
But, “free enterprise” or “unfettered capitalism” as the US Republican party wants is a road to disaster. There must be regulation. With proper regulation the Gulf oil disaster would not have happened. With proper regulation the sub-prime mortgage mess would not have happened. There are many, many more examples.
Governments must make laws to regulate all manner of industries and areas. They must also insure that there is sufficient money to enforce the regulations. Regulation without enforcement is useless. Regulation is the way to protect the general population from excessive greed or malfeasance by the Capitalists.
But regulation can also go too far. When excessive regulation is used by small groups on projects that they want to stop then regulation has gone too far. Regulation that takes years to complete and million of dollars can just be a measure ensnarl otherwise good projects.
I think that Social Democracies like those in the Scandanavian countries are very good at making the balance between Capitalism and the good of the people work.
Like many other things it all comes down to balance and how to achieve it.