Perhaps, but capitalism is an echo of mercantilism. By its nature, it is not harmonious in the sense that all people work together for a common purpose. They actually pit subgroups against each other for personal advantage.
When capitalism behaves positively, the government acts more as a referee than a participant. During the Cold War, governments tended to act as participants (interjecting national goals into the system) which created the "insanity" you refer to.