capitalism, correctly imagined, is a society of self-governed parties, engaging in mutually beneficial voluntary exchange, all free to produce and consume

government, correctly imagined, is a single designated party (a monopoly) for final arbitration, requiring compliance (implies involuntary) to function, which itself does not produce by statute, meaning no exchange with it is mutually beneficial (rather, as apologists would point out, when private parties disobey and use force/fraud between each other, government settles the matter at a loss, and then all of society must account for that loss through taxation)

note that crime still exists in both.

in a free market capitalist society -- although we have little evidence because anarchist communities do not pop up very often -- it is obvious to anyone rational that individuals will still disobey, and commit crimes, because there is nothing stopping them.

in a government regulated "capitalist" society -- which we have had in all western civilizations for a very long time, and which demonstrate we have crime both in and out of government -- it is obvious to anyone rational that individuals will still disobey, and commit crimes, because there is nothing stopping them.

capitalism, however, does not "fail" when individuals commit crimes and engage in involuntary exchange whether by force or fraud. that individual, committing that transgression, fails, and has signaled to society that they will not treat you according to the rules, and that they implicitly agree they should not be treated according to the rules, either.

government "fails" regularly -- individuals entrusted to it commit crimes using it -- about a dozen times every day in the US. and that means, not just on the side, and not just taking advantage of a situation, like insider trading, but actual crimes: kidnapping, theft, summary execution.

government also "fails" on theory, according to the contemporary and more extensive (irrational) definition that the addition of nanny-state government to a capitalist society deters crime above and beyond merely arbitrating ex post facto -- an argument that progressives desperately need to make, since after all private arbitration was much preferred to government throughout US history, having had both available simultaneously for a time during the transition to a confederacy and then a federated republic, and still in fact exists even today (although it is regulated to a pre-legal option for a limited range of civil disputes only and cannot issue legally binding decisions).

you'll recognize this argument because progressives believe it fervently, yet lambasted it over the lack of evidence of WMD in iraq.

despite there being no true-positive indicator that crime is deterred by any mechanism at all, be it privately-owned handguns or public police forces, it is politically incorrect to point out that nothing is stopping anyone from committing great crimes (like school shootings?) under the imposition of government.

it is identical to the argument that, through invasion, "we" could prove there were or were not WMD in iraq, because if we never found them, they might still be there. no matter how much government invades society, if "we" take it away, the progressive can be sure crime will proliferate. that is what is truly bad, poor quality, and a systemic failure: the progressive mind.