Capitalism is a production system where ressources allocation is decided by capital owners. It doesn't really oppose socialism (after all, if we're all capital owners we can all decide what to produce collectively!) , it's more opposed to dirigism (it has another name but I cannot remember). Successful example of dirigism are stuff like Apollo, Airbus or the Messmer Plan, often requires high centralization, which makes it highly undesirable to people (like me).
Anyway, mixed economy all the way imho. Capitalism for small stuff, dirigism in natural monopolies.
Just like with "socialism", most discussions about "capitalism" are actually people with different definitions talking past each other. I'd say the important issue in economics is monopoly vs anti-monopoly not "capitalism" vs "socialism" and free software is definitely on the side of anti-monopoly.