I have been reading Friedrich von Hayek's, The Road to Serfdom. While Hayek is held up as a champion of capitalism, that is an incomplete description of his philosophy. Hayek makes clear in his book that he is champion of individual liberty--the classical liberal--and opposed to socialism (essentially modern "liberalism" as that term is used in the United States). He lays out a clear case of why socialism, notwithstanding the intent or vision of some of its leaders or followers, inevitably must lead to tyranny. (See also here).
However, Hayek is careful to note that the wealthy and powerful "capitalists" are just as much an enemy of free markets and liberty as the most ardent socialist because large business enterprises seek centralized planning and regulation to stifle competition and obtain monopolistic powers. Something that is alive and well among even the technology industry--those who we would expect to be most supportive of the free market.
Hayek wrote his book during World War II. He identifies at that time two large monopolistic organizations: labor unions and the large industrial and financial concerns. If we were to look at the two national political parties at that time, we would see that they reflect these two monopolies. The Democrats were the party of labor, while the Republicans, at least at the national level, were the party of the large business enterprises. Left out in the cold were the true liberals. But given the relatively free market system extant in the United States at that time, there was probably little incentive for liberals to win over one or the other of the parties.
In the '60s, the Democratic party began its transformation into what has become the home and hope of American socialists. The Republican party, however, has remained devoted to the large industrial and financial concerns even as those same concerns have increasingly supported the Democratic party. Again, the true liberals have been left out in the cold. The difference now is that such true liberals have incentive to fight for control of one or the other parties. The Democratic party is unwinnable. The Republican party is a different manner. The Tea Party movement represents the revolution within the Republican party, which is why the Republican leadership both loathe and fear it.
But the Republican party faces a stark choice. If it remains the second-tier socialist party--offering the essentially the same big-government, centralized planning choices as the Democrats--it will fade into irrelevance. Or, it can champion individual liberty and free markets, recognizing that to do so must cause the politicians at the national level to work to reduce their own power and influence.