I wouldn’t say interchangeable, but they are not far removed. I agree with the dictionary definition that it is a system of private property with trade in a free market. I would personally add that it is motivated by greed as that is what I observe. A company that is successful will eventually want to grow. Perhaps it might turn to sabotaging the free and open market as it helps it secure its own profits. In that case it will resemble feudalism somewhat. This is based on what I have read on history and what I see on current events around me today.

But to your title. Capitalism does not say anything about cronyism being bad, nor to discourage it. I think you just really like capitalism and need to rationalize the negative stuff away because you are aware it is a bad look. I understand the mindset. I had it growing up conservative and being a member of the church.