> In a purely capitalist economy a lack of supply would cause prices to go increase and the market would respond accordingly.
In a purely capitalist economy, those with capital would have the easiest time getting more capital, as they get more capital they get more and more influence and exist farther and farther from consequences. Then it's trivial to get things like citizens united, stock trading congress members, and regulatory capture. As ruling institutions weaken so to do the systems that enforce "pure capitalism." Thus "pure" capitalism plants the seeds of it's own destruction.
"The free market solves all problems" is 2000's Ron Paul era thought, and it is clearly very wrong.
The right results from a "free market" are not inevitable. The results, right or wrong, are a summation of the actions of it's individual participants. Culture is the first line of defense, and when culture fails, you must rely on regulation, and when regulation fails, you must rely on force.
> The fix for to much regulation is less regulation, not more.
The fix for the wrong regulation is the right regulation.
Analyzing for less and more is intellectually bankrupt and shows lack of critical thinking. Less regulation used for regulatory capture is good, less regulation used for legitimate consumer protection is bad. More regulation that stifles innovation is bad, more regulation that prevents robber barrons and bullying of small business is good.
You need to do more reading on "the tragedy of the commons." https://en.wikipedia.org/wiki/Tragedy_of_the_commons