It's single stream that's bad, not 'capitalism.'
My town has a drop-off only transfer station, no pickup. Residents sort their profitable recyclables* into several large bins. The revenue from these high-quality, high-profit recyclables usually pays for the tipping fees on the trash (which includes non-profitable 'recyclables'). Town tax revenue is still required to pay for the facility upkeep and the people.
Of course, what works in a small bedroom community might not work as well in a dense metro area.
*glass (actually costs money to get rid of, but less than garbage), tin & steel cans, Aluminum cans, #2 colored plastic, #2 undyed plastic, #1 mixed plastic, newspaper, mixed paper, corrugated cardboard.)