Other systems are not dysfunctional because they aren't as good. They fail to work because they aren't as realistic. It is starkly rational to appeal to fallen humanity, because it is reality. Humanity is fallen.
The third model of human nature is found in the thinking of the American founders. “If men were angels,” wrote James Madison, the father of the Constitution, in Federalist Paper No. 51, “no government would be necessary.” But Madison and the other founders knew men were not angels and would never become angels. They believed instead that human nature was mixed, a combination of virtue and vice, nobility and corruption. People were swayed by both reason and passion, capable of self-government but not to be trusted with absolute power. The founders’ assumption was that within every human heart, let alone among different individuals, are competing and sometimes contradictory moral impulses and currents.
A free market can also better our moral condition—not dramatically and not always, but often enough. It places a premium on thrift, savings, and investment.
This last view of human nature is consistent with and reflective of Christian teaching. The Scriptures teach that we are both made in the image of God and fallen creatures; in the words of Saint Paul, we can be “instruments of wickedness” as well as “instruments of righteousness.”3 Human beings are capable of acts of squalor and acts of nobility; we can pursue vice and we can pursue virtue.
As for the matter of the state: Romans 13 makes clear that government is divinely sanctioned by God to preserve public order, restrain evil, and make justice possible. This, too, was a view shared by many of the founders. Government reflects human nature, they argued, “because the passions of men will not conform to the dictates of reason and justice without constraint.”4
The Anglo-Scottish Enlightenment philosophies of Adam Smith, David Hume, and Francis Hutcheson both informed and aligned with the views of the American founders and Christian teaching. Smith was himself a professor of moral philosophy; The Theory of Moral Sentiments5 preceded The Wealth of Nations.6 Smith and his compatriots did not believe in the perfectibility of human nature and thought it foolish to build any human institution on the possibility of attaining such perfection. Neither did they believe that human nature was irredeemably corrupt and devoid of virtue. http://american.com/archive/2010/december/human-nature-and-capitalism/
Probably another reason atheistic socialism hates capitalism is that the success of capitalism is another proof that the Bible is a true revelation from God.