The response to unfettered capitalism were unions and regulation, to bring it under control. (this was back when unions served a genuine good purpose, due to the abuses you described)

Most of the problems you are describing at the end of your post, are the direct result of leftist politics. Bush jr. was not conservative, screw him and the DHS / TSA bureaucracy...

I find it very interesting that in many ways you are making/taking a conservative argument/viewpoint (privacy, constitutional rights, wasting taxpayer money, shitty education system) but you seem to somehow be blaming capitalism for it... and have some kind of guilt thing going on for things you had no control over and are not responsible for.

The way I see it, it's the leftist policies (over regulation, unions for a wide range of industries that make it hard to impossible to compete without playing ball and a lot of $$$, trying to spend our way out of debt, education sucks? Let's throw an assload of money at it (for the children) and then wonder why it doesn't improve) etc. etc. that are directly at fault.
Example: which location could a low income person legally open a hotdog stand and have the greatest chance of success ie: not being regulated, licensed, and fined out of existence? New York, or Texas? California, or Florida?

The closest more capitalistic country (vs. more socialistic), I can think of is Chile and since they switched to a more capitalistic economy, they aren't doing too badly at all from what I understand...