Capitalism works EXCEPTIONALLY WELL with socialism. Using ideology to separate capitalism and socialism limits the growth of national wealth.
First of all, capitalism is not a way of life. Capitalism is a method of recording wealth transactions. Capitalism does not care where the investment wealth comes from nor who owns the assets. Capitalism has NO laws or regulations and only one penalty: poverty.
All law or regulation rules are from the common needs of the population enacted by their representative - it's called government.
Three forms of regulating capitalism - assuming your society has excess wealth to invest - are utilized.
- Single points of control - dictatorships of all sorts including kings, war lords, a few wealthy people, and others with the ability not to make decisions without referencing anything.
- Autocracy when more than a few wealthy groups have to listen to the other wealthy people - like America's Golden Age of the 1850's through today.
- Socialism - or where the middle class controls investment and consumption through a government more interested in the middle class that aggregating wealth interests of the asset owning class.
You can see why the wealthy hate socialism. Casting it as EVIL and identical to communism (although not even vaguely related) at a fairly successful rate helps the wealthy stay in charge and fulfilling their emotional need to accumulate wealth. Take into account 20% of the economic strata are actually keeping the economy running. Is this good? Is this bad? Does using ideology help reach a good conclusion?
Manufacturing Villages certainly uses capitalism. Why would I use anything else? It's just a matter of asset ownership when long-term goals are involved.