Right, if people can't elect their leaders, then the leaders must stay in power by other means, such as bullying. Seems rather intuitive to me.

Another way of thinking about it is imagine if the bullies got in power and took over the whole state. What kind of state would it be? One without free elections no doubt

Yeah certain models of governance tend towards bullying.

Capitalistic governments love to bully poor people

I'm not sure any governments are "capitalistic" per se, though many embrace markets to varying extents. As the sibling comment points out there Nordics are all VERY market oriented (more-so than the US/Anglospehere) and have strong welfare states. As for the US it varies a lot state by state, and most of the really egregious shit is done by municipal governments.

But none of that really matters because the US/West was never carting people off to work camps for something their children let slip in school, which the USSR and GDR did for decades.

Isn't it also true that in a truly capitalist system the capitalists (meaning people with capital, the rich) would be in power, meaning they could also "buy" the government?

There are many different flavours of capitalism. Sweden bullies poor people far less than North Korea or Cuba or Vietnam does, despite being a capitalist society.