This has enough truth in it to have persuaded most Americans to accept it almost as a religious dogma. During the latter half of the 19th and much of the 20th centuries, more and better goods have become available to more people in Capitalist economies than in non-competitive Marxist economies. Despite persistent pockets of poverty, most developed capitalist economies had higher average standards of living than controlled Communist ones, and the pressures of the market on capitalists to produce more popular goods at lower prices clearly have a lot to do with this.
But capitalism is not always competitive. The Japanese economy thrived for several decades by strictly controlling competition. Would-be monopolists are always emerging as natural products of capitalism, threatening to do away with competition from capitalist, not socialist motives. If people have been able to raise their standards of living it has been partly because of the work of labor unions and those who have agitated for minimum wage and maximum work day laws, all denounced as harmful to free competition.
Sometimes it is the capitalists who fear the free operation of the market and call for regulation. When employment is high and people are achieving higher wages, the stock market frets about inflation and creates pressures on government regulatory agencies to “cool off” the economy, creating more widespread unemployment and lower wages.
As the Asian “tigers” (Japan, Korea, Taiwan, etc.) stumble in their pursuit of regulated capitalism, the free marketers are currently triumphant; but the record of the unregulated market in post-Communist Russia is not inspiring. That unregulated capitalism could produce misery was demonstrated during the industrial revolution, and the demonstration has been often repeated since. No society can long tolerate the entire lack of restraints on business, and never does.