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Yes and no. I would have said "Capitalism works when the state acts as impartial referee to regulate markets", which involves more than just protecting compe ion - it also means protecting consumers, employees, the environment; anyone without power in the market system who can thus be exploited.
Capitalism is great, but there's also a little thing called "market failure" which leads to short-term profit at the expense of longer term goals like social and environmental concern.
Capitalism with strong regulation is the ideal IMHO, however the political system is co-opted by money from industry lobbies and short-term electoral cycles, so what we get is unbridled capitalism, which is leading to social problems, economic inequity and a collapsing environment... still a better result than Communism, but a long way from perfect.
