Things that tend to have a natural monopoly (for example, water pipes) don't work very well in a truly capitalistic market where everything is privatized. Unless you start with everyone being on equal footing, the incumbents can employ a strategy where they force new entrants to the market to pay exponentially more and thus snuff them out before they become a threat, and therefore can set their price to whatever the market will beare. Imagine you have to spend the majority of your income on potable water, simply because you can't get it anywhere else! You will pay it, because its your life, and it has infinite value if you can't get enough of it. Therefore, whoever controls the water can control others thru this power.