Many people erroneously equate Capitalism with Free Markets.

No, many people incorrectly equate a monopolistic, pay-to-play, regulation-captured plutocracy with capitalism.

Fundamentally, capitalism is about handling economic planning in an efficient way by free-market autoregulation and policy makers who nurture competition to ensure that process continues to happen efficiently.

Your definition seems closer to ordoliberalism [0].

If competition and free markets are a necessary components of capitalism, then you would conclude - for instance - that the US stopped being a capitalistic country in the late XIXth century with so many prominent trusts. Or perhaps it never was capitalistic before WWII, since policy makers did not nurture competition but rather attempted to shield local industries from foreign competitions.

[0] Wikipedia definition: Ordoliberalism is the German variant of economic liberalism that emphasizes the need for the state to ensure that the free market produces results close to its theoretical potential

I was all set to say I disagree with the comparison to ordoliberalism pretty strongly with the following statement: There is a key difference about how often I think, from the perspective of a government official or regulatory body, the best policy would be to do nothing.

Then I found myself in significant agreement with the following paragraph from the Wikipedia article:

>Ordoliberal theory holds that the state must create a proper legal environment for the economy and maintain a healthy level of competition through measures that adhere to market principles. This is the foundation of its legitimacy.[9] The concern is that, if the state does not take active measures to foster competition, firms with monopoly (or oligopoly) power will emerge, which will not only subvert the advantages offered by the market economy, but also possibly undermine good government, since strong economic power can be transformed into political power.

However, I still hold some skepticism about this concept, since it often seems like, at least in the US, that government interventions are what serve to dissuade competition.

Either way, thank you for your input. I find it very interesting, especially because I've often admired the Germans' modern economic management which seems largely based on ordoliberalism.

Note that I was not trying to make a statement on whether capitalism is great or which variety of capitalism is best. Rather I pointed out that the word "capitalism" is not a synonym for "free markets", both when used by laymen and by academics.