Im a little confused. Is America actually capitalist, or is it crony capitalist? Would TRUE capitalism have any problems? On the surface, it makes sense: make good product, get money. Someone makes better product, you need to improve yours or you go out of business. The issue is when we get monopolies and regulations that then restrict actual good products from being able to exist. But thats not a thing in true capitalism (so they say)
Is the best thing a mix of socialism and capitalism? I dont think we could abolish government, as someone has to lead. Certainly government needs to have actual checks and balances in place.
A lot of initial theory was written when the idea of complex markets and how they functioned was a relatively new idea. Compared to previous economic systems that were implemented, capitalism involved a lot less government involvement.
Crony Capitalism came about as an idea when established companies found it was cheaper to buy off the government for a better regulatory environment.
In theory you can have capitalism without crony capitalism, but it generally requires political power to be very diffuse and not concentrated in certain industries.