"...the theory of how capitalism is supposed to work without taking into account the reality of what's happening."

That hits it right on the head. Capitalism works because it harnesses the desire of people to work hard and take risks in order to better themselves. It also is self-regulating through market mechanisms, competition and all that. This is why I can never be a Communist, or a pure socialist (Note the two are not identical).

On the other hand, capitalism has its shortcomings, it is not very good at providing useful things that can't be easily pegged to a price, and people who are good capitalists quickly develop the skills to defeat the checks and balances of the market. As one of my fellow Zoners put it, they're good at "gaming the system". A good capitalist can be compared to a lawyer, skilled at using the law to protect the guilty and abuse the innocent. Another example is a crooked politician, who uses his knowledge of the legislature for his own benefit. It doesn't mean the law is bad, it just means people are people.

My solution is a free market regulated by a democratic social system, with freedom of information and speech so everyone can be informed and participate. This is what everybody wants, but good men disagree in how to do it. Fine, that's why we have politics.

What I don't like is ideology, someone telling me it has to be THIS way because that's what the founding fathers wanted or what Karl Marx wrote. Personally, I don't care what Ayn Rand or John Lennon and Groucho Marx said, (although I think we have something to learn from them all. We are human beings, free men, we get to write the rules we want, provided we can get our fellows to agree to them.