American politics, bipartisan as always, often makes us think of capitalism of regulation and capitalism as opposites. As in, you're either capitalist and free-market oriented or you're not capitalist and what regulation and government taking over. The libertarians says markets need freedom from government interference to function. The progressive often talks as if markets are dangerous by default and need democratic power imposed from outside to restrain them. Both pictures assume regulation is external to market life, something layered on top of it. I think that is the wrong starting point.
Regulation is infrastructure
Regulation is market infrastructure. Not all legal structure matters equally, and not every rule improves a market, but no market exists without some legal architecture underneath it. Even fully free market needs at least copyright laws (else who would even bother innovating since is very expensive) Contracts are regulation, property rights are regulation, fraud rules are regulation, disclosure rules are regulation. Insurance wouldn't exist if not for regulation. These are not pains we have to deal with impositions on market exchange. They are the the system itself. Don't think of regulations as the breaks in a car, but rather as all the systems that allow the engine (Capitalism) to moves us to prosperity.
One failure mode of unregulated capitalism produces is the conversion of wealth into political power. At lower levels, additional capital is still mostly used for productive competition: investment, expansion, hiring, production, product improvement. After several hundreds of billions, more of that capital starts going to influence political parties. It goes into lobbying, regulatory capture, litigation designed to exhaust weaker rivals, campaign finance, and the acquisition of political access itself. At that point, Elon & co are no longer competing inside the market, but paying their chronies to own the rules around it, not to improve the market. 1
Another failure mode is mass poverty and market erosion. A market needs broad participation to stay alive. People deep in poverty are not just morally failed by the system, but they don't take risks, don't allocate themselves to the most effective jobs they can do, they spend their energy just trying to survive. And they consume less, save less, invest less, and have less ability to take productive risk. Their labor and capacity are used badly. Broad demand gets weaker. The argument for anti-poverty policy is partly moral if you want it to be. It is also a market-function argument. A capitalist system that leaves too much of the population unable to participate meaningfully is damaging its own consumer base and its own talent base. We have plenty of food and income to ensure everyone has a baseline, when we solve that problem, the majority of the people will still want more and work for it, counter-intuitively effectively than when they're just trying to survive.
Yes, there's a ton of examples of how regulation can be corrupted or get in the way. Agencies can get controlled by the industries they are supposed to police. Compliance costs can become a moat that the big players survive and the smaller ones cannot. However, that is not an argument against regulation. When some pieces in your car break, you don't just decide they were never needed. Y look into them, you fix them, you replace them. You don't just remove it and expect your car to move on. Laws can be amended. Agencies can be sued. Rules can be repealed, rewritten, exposed, and fought over in public. When dominant firms own both the market and the means of shaping its terms, the leverage against them is smaller and the visibility is worse.
Nordic countries
That is also where the Nordic comparison matters, if handled carefully. It does not prove that more regulation always produces better outcomes. It does show that extensive regulation and competitive markets are not natural enemies. Several Nordic economies maintain larger regulatory states than Anglo-American libertarians would prefer while still ranking well on competitiveness, market-entry quality, and institutional trust by common international measures.2 Same with Singapore, still the most succesful Asian country, and most business friendly country on earth. Their government has very strong laws in place and they intervene A LOT. The point is that the slogan "regulation kills competition" is too simple to survive contact with the world.
Don't base your political thinking in memes. Being a capitalist, being a pro-market entushiast doesn't mean you become a caricature and just repeat "free market" everywhere against any regulation or control. Capitalism without real regulatory infrastructure does not stay clean, dynamic, and meritocratic for long. It drifts toward a system where the wealthiest players buy the referee, rewrite the rulebook, and then call the result market freedom. That is not a freer market. It is just private power with better branding. That was the lesson the Monopoly game tried to teach us and failed.
Research on the relationship between wealth concentration and policy influence includes Martin Gilens and Benjamin Page, "Testing Theories of American Politics" (2014). The causal interpretation remains contested, but the relationship between elite economic power and policy outcomes is well documented.
Nordic economies regularly rank highly on competitiveness, market-entry quality, and institutional integrity despite maintaining larger regulatory states than many Anglo-American economies. The comparison should be read as a counterexample to the crude inverse claim, not as clean causal proof.