Your last paragraph is actually describing, with some important exceptions, the American economic system for the first couple of decades after WWII. FDR got the New Deal passed, so the socialistic share of our society increased greatly, yet it was one of the longest and strongest periods of economic growth (I acknowledge that it was not so great for POCs, but either is the current system).

In the early 60s the share of national income going to the richest 1% of Americans was 8%. Today it is over 25% and climbing. This has occurred after 40 years of bashing government and outsourcing its responsibilities to the private sector, repealing important government regulations that helped control capital markets, and slashing the taxes paid by the rich, essentially redistributing the spoils of a capitalist society from the middle class to the rich.