Capitalism is a nice idea, extremely effective at efficiently allocating resources. But left to itself it's a self-destroying process - barring spectacular stupidity capitalism concentrates wealth into the hands of those who have it to begin with. It doesn't take long before those who have benefited from the wealth concentration manage to leverage their economic power into regulatory capture and other political power, destroying the free market. And many, many markets are natural monopolies where even a free market won't help things.
I'm not sure what exactly the solution is, but I think a measure of socialism is likely going to be part of it. You wouldn't expect the water cycle to remain stable if the water flowed into the oceans and then remained there to be leveraged in the internal power struggles of the whales, instead evaporation pumps that water back out into the hinterlands where it can then flow back to the sea, transforming the land along the way. I think we need something similar in our economic cycles - the myth of trickle-down economics has been pretty seriously debunked at this point, and is about the only mechanism unfettered capitalism offers for completing the cycle. Perhaps something like a "10% income redistribution tax" would do the trick - everyone is taxed based on income, the proceeds to be distributed equally to everyone - with the present income distribution in the US I believe something like 80%-90% of the population would benefit from that directly, and a steady flow of serious wealth from the bottom would give new economic players a chance to compete with and even overthrow the old conglomerate giants, reducing the market-destroying influence of the major powers.
Especially as ever cheaper and more powerful automation removes the need for human labor we're going to have to come up with new economic models. At present we seem to be headed for a world where those few who happen to be holding overwhelming economic power when near-total automation takes over will own all production and, aside from their chosen servants and jesters, the rest of us will starve. We already have the technology and productivity to turn the world into the sort of low-labor utopias dreamed of a century ago, personally I think we should at least make the attempt.