Here's the breakdown of this entire argument: Capitalism only works when mediated by a somewhat socialistic government.
Capitalism is a system based on greed. Greed is the only thing driving it. Dressing it up in terms like "ambition" and "working hard" doesn't change the fact that it's about hoarding wealth. It is an utter lie to say that anyone can prosper in a capitalistic system, or that even the poor "become wealthy", or that "hard work" is all it takes to be successful. If that were true, than I should have been making far more money working on a printing press 12 hours a day with virtually no benefits and immense personal risk to myself, than I do now sitting at a computer writing code for 8 (with vacation and sick leave). And yet I now make 3 times as much money. And before you claim that working on a press requires less skill, I should let you know, having performed both jobs, that they both require a lot of skill to do properly. One is simply far more physically demanding in addition to being mentally challenging - and yet pays 1/3 the money with fewer benefits. (Neither require a college degree, either.) How is hard work rewarded in a capitalistic system when the top earners, the richest people in this country, don''t work as hard as the average janitor or auto mechanic?
The gap between the rich and the poor is widening. Why? Because capitalism is based on greed. When you take any given human society and provide them with a finite amount of resources, their instinct will always be to hoard those resources for their own private consumption. Any anthropological study will prove this to you. You will never convince the super-wealthy to actually share their wealth, unless they believe it will lead to more wealth for themselves. That's what creates jobs. Corporations don't create jobs out of the goodness of their hearts. They do it because they think it will make them more money. Insurance companies don't pay your benefits to help their fellow man. They do it because they are, in some way, making a significant profit. And when something cuts into those quite ample profits, they compensate by raising prices, cutting benefits, or dropping problematic (read: sick) clients.
Capitalism is inherently a faulty system when practiced in its purest form because of the tendency of humans to hoard resources. It MUST be moderated by socialistic practices such as taxes and regulation to ensure the maximum level of prosperity for all of its citizens. Even the largest corporations would completely and utterly fail if they did not have a consumerist society with money buying their products. They need us as much as we need them. It's a symbiotic system. But to prevent them from becoming unruly and destroying the delicate balance we share, the government MUST regulate them.
Right now that means challenging the current model of health care, which has clearly failed. Skyrocketing medical costs, 50 million uninsured Americans, crowded emergency rooms, insurance premiums up and benefits down, chronic illnesses going untreated until they become critical, and a system based on putting out fires rather than preventing them in the first place. There's a problem here. Letting the free market regulate itself is like letting a 5-year-old decide what he wants for dinner. He's going to make himself sick.