Capitalism, in its purest form, relies on the "invisible hand" -- the premise that self-interest alone, in the context of free markets, will lead to the Pareto-optimal distribution of resources. However, it is not clear that such as Pareto-optimal distribution is the same a compassionate society's preferred distribution of resources.
For example, if resources are moved to where they can be most productively used, then the severely disabled or sick, to the extent that they are less "productive", would likely be short changed if not completely abandoned. So an allocation commensurate with a caring society is not one that would likely be realized by free markets alone. Hence the need for government and moderation/management of markets.
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