I disagree with the OP. Capitalism implies that the capital is in private hands. However, I agree that you can have a capitalist command economy. In other words, the government picks winners which in turn support the state, but the government does not own the capital. I think this is how China does things. They don't have any of this capital sharing nonsense; their corps are owned by individuals and shareholders, but the government doesn't allow a totally free market. Rather, business success is heavily intertwined with control of the government apparatus.
It still seems to come down to property rights. Government can't do anything unless it can violate property rights, e.g. regulations, taxation, money printing (indirectly by forcing people to use government fiat).
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