First to clarify terminology. Capitalism on it's own isn't a phrase with much depth. It simply means that wealth should be created by adding labor to raw material. It's in opposition to systems like feudalism and mercantilism who respectively believe that wealth can only be created by working the land or wealth can only be created by having a trade surplus and thus by importing more gold than you export.

What you're thinking of is a specific kind of capitalism called, free market capitalism. Free market capitalism requires three factors to function. Government non intervention, perfect competition and perfect consumer information.

While the ideal is obviously impossible to achieve even the imperfect version is pretty good. If the consumer knows everything and everyone can sell any product the consumer will inevitably ruin any company not working in the consumers interest. No intervention is needed.

However, this system does not account for the need for innovation. Having a world where anyone can print magic cards is all well and dandy until you consider that it takes a lot more money to develop a set, commission the art ect. in addition to printing it, than it is to just copy the cards and print them.

The problem becomes infinity larger when you consider technologies that cost tens or hundreds of millions of dollars to develop and a tiny fraction of that to copy. To get innovation the government needs to intervene specifically to disrupt perfect competition.

All of this would still work fine if we at least had the, if not perfect, the relevant information and here's where we get to your central point. Free maker capitalism isn't bad do to people being apathetic about important issues and enthusiastic about the new shiny, it's impossible. Marketing and advertising are some of the first things we associate with capitalism, and are at the same time by far the most uncapitalistic thing you could do short of establishing a monopoly or nationalization

However, it's also really important to point out, the problem isn't the system. The system is fine. You know how they say communism looks good on paper but doesn't work in practice? That's bullshit. It looks horrible on paper. It complacently ignores people. It's a system for robots. Capitalism does account for people being people and thus selfish, it does look good on paper because while it's hard to imagine people being selfless automatons only working for the betterment of the collective, people being self interested and acting accordingly is perfectly reasonable.

What no system can account for is people acting not in their own self interest, or the interest of the collective, but doing things that are self defeating, hurting them selves, hurting those around them and only forwarding the fortunes of a choice few that make it openly known they want nothing to do with the masses.

Why would anyone tie money to a balloon and send it to the sky only to get pissed on? I don't know, but but they do. What system could possibly account for that? How do you build a society where it's members are hellbent to ruin it.

Don't blame the system. You're point is that we should try something else because capitalism isn't working. It's not the system, it's us. You're looking for the best engine that works on sand. You need to get rid of the sand, because you're not going to find the right engine.