They were (and mostly still are) heavily statist countries. "Capitalist" they were only if you would think about this word as a scale. Like North Korea being slightly capitalistic.

Those countries though lack attributes of classical capitalistic societies like

- proper ownership titles and their protection from third parties, including the state

- low barriers for market entry

- free(r) flow of capital, including across their borders

All of these were practically absent in those countries. Good luck establishing your broadcasting service being a christian/jew/<minority> and without connections to the feudal rulers/police/military.

Which capitalist society does employ it's military to produce basic goods, like milk?

Were the actually capitalist? When I think of the Middle East monarchies dominated by an inherited nobility that controls all of the wealth and gives handouts to keep the lower class from revolting, "capitalism" is not what comes to mind.

I feel like I'm being mistaken for a staunch libertarian here, so I want to point out that I'm not that at all. I do think there is a big role for government investment to play in society, including in providing drinkable freshwater. This was the Israeli solution, and it's increasingly going that way in California as well. I'm not advocating for strict market-force-only supply-and-demand, but rather just pointing out that wasteful uses of water will go down as the price of water goes up, which it should be allowed to do rather than being subsidized in order to control wasteful uses. The cost of having enough water to drink and to cook with is measured in the low cents per day per person in the US. A single penny gets you over two gallons from the faucet where I live. And I'm in favor of safety net programs to prevent people from dying from illness, hunger, or thirst.

I think the point here is as in Israel, there needs to be a system, government, and culture that makes a free market possible. In the case where such a system is corrupt or instead offloads the costs onto another group of people, such a system falls apart and you have revolution as a result.

Exactly. While the parent comments correctly claim that many Middle-Eastern countries are technically capitalist, they do not provide a fair system where anyone with the capital can set up shop and start offering products/services. There is a large amount of bureaucratic red tape and often lack of property protections that scare away genuine capital.

At least to start, the problem was totalitarianism and corruption, not capitalism.

"But when he put them on sale, three inspectors from the council asked him for bribes. Mohamed refused to pay."

http://www.bbc.com/news/world-africa-16230190

That's crony capitalism, which is what you also have in Putin's Russia. The government decides which private enterprises will succeed, and in return the owners give the governmental officials their political support and immense bribes. It is not nearly as efficient and adaptive as the considerably less corrupt version of capitalism in Israel or the US.