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Well only a TRUE Scottsman could tell you how TRUE capitalism works.
But OK so in short the gist of theory in capitalism.
Free market ideas - IE capitalism with no government oversite. If a company makes shitty products, someone else will make a less shitty product and all consumers will switch, or if a company starts dumping toxic waste into the drinking water, people would figure it out and stop buying that product... Parts of it are kind of a pipe dream because, some products are inherantly expensive to get started in. Lets face it, Facebook, Windows etc... aren't dominant because their products are the best, pretty sure you could poll their userbase and find abysmal satisfaction among them. Yet even a giant as big as google, can't accomplish the resources needed to compete in those markets... let alone a startup out of nowhere.
Now regulations obviously that's where crony vs regulated comes up in discussion.
Obviously to me the big part is, safety matters. First off the bat, information, consumers can't even make decisions if they don't know. If you are putting poison in food, or calling something healthy when it's loaded with crap, consumers have to know that.
Environmental is a bigger problem. Obviously requiring you to shield and not leak toxins into the drinking water... is a big problem, and it creates a huge problem, as the companys selling gas, or manufacturing chemicals etc... that spend less on safety are at a huge advantage in pricing to the consumer, who can't tell why the more ethical companies are so expensive, only that they are more expensive. But the more safety that's required, the higher the bar to entry is..