Any "pure" system tends to self destruct in a positive feedback loop, over time, even capitalism.
Under capitalism,the bottom line goal of business is to grow, and make maximum profit; and to do this, it must beat and/or reduce the competition.
The paradox is, capitalism only works when there IS competition. Corporations however, have a duty, so to speak, to "win", and this ultimately leads to buy-outs, hostile takeovers, and mergers, all of which eliminate competition. Without some measure of outside control, the system tends to be cannibalistic. This is why government regulations are necessary. Sorry, Libertarians, but it's true.. the Sherman Anti-trust act is proof of this.
The controversy is over how much regulation is too little or too much, and as with everything, moderation is the key, balance is difficult to achieve. The best system is a hybrid system, as that provides some checks and balances between government and the private sector. But that doesn't make it easy.