Capitalism is the idea that those that own the means of production own the profits from them.

Meritocracy is the idea that those with skill will prevail over those without.

I can agree on these definitions.

the problem is that that which capitalism holds in high merits is that which generates capital at the fastest rate

I tend to disagree with this, not that it’s entirely incorrect, but I think quality can’t be disregarded; can the product be made safely is another factor; then innovation plays a role allowing for higher quality products at faster rates. These aren’t smoke screens that some capitalist business man made up to trick you into thinking they are altruistic. These are things that might that effect bottom line.

Let’s switch back to the question, how would nepotism effect any of these things. Well, if the higher quality, safely produced, innovative product can’t come to market because it’s competing against people who have hoarded wealth though centuries long line of succession it’s not because capitalism has failed. Maybe it is, maybe this definition of capitalism would not prevent this type of stagnation. Would it be possible to expand the definition of capitalism, or even just build on the basic principle? I don’t know.