The system we have now isn't capitalism because capitalism only exist when people are to trade what ever they want for whatever they can. When the government steps in and says, you cannot trade this product, then it ceases to be capitalism.
Capitalism, as stated by Adam Smith (the finder of capitalism) does not mean the government doesn't have a role to play in the market, and on the contrary, has the moral obligation to ensure anarchy does not ensue and people aren't allowed to freely harm others (this includes Fraud). Capitalism and a free market are perfectly capable of existence of social(government) services and some regulations. Its not consistent, and ceases to even exist, when these regulations and social services are used prevent entry into market or used to promote 1 market over another.