I am assuming you are a defender of free markets - but are using the term capitalism - since you view them as the same.

There are several areas where your arguments get mangled up - especially because the premise of your arguments are based on a discourse that is dominated by European thought.

Consider the following premise and see if it makes sense to you:
Marxism or Capitalism - both fundamentally contradict liberty and have taken turns in killing free markets.

While capital (stolen gold from the america’s) became the fuel that fed Europe’s initial growth, the same capital quickly bought favourable legislations.  In English varying laws were passed in the 1700s when the “capitalists” lobbied the parliament to create laws that would force English weavers - who were employees of these capitalists - to delliver quality products on time.  Failure to comply could result in public floggings or sometimes even public hangings.  Remember - these were “laws” specifically created by the “capitalists.”

Modern America is no different - where government organizations primarily work as an extention of many “capital” intensive companies.  For example, the FDA as an extention of the half dozen drug companies.

The question you should ask yourself is whether any nation in the world was succesful in implementint a polity that allowed free markets to thrive?
A place where neither the government nor the capitalists derived power over production or trade.  

The answer might surprise you.

No discussion of capitalism can be complete without mentioning the idea of property rights.

There can be Only one right, and that is the right to life, and it encompasses every other right.
Expanding the sky of rights doesn’t help the individual yet, it helps the state to make Individuals slave.
Property right is not like a man has some birth right on some property or thing/object or service.
Property right means he has freedom of action, to create, produce or earn an object/property/thing/service.
Property right certainly does not mean any birth right for anything.
As for example, the four sons of a rich man are not rich by birth because they have any sort of right over their father’s property.
it is their father’s will to provide his sons the benefits of his property, but it is his optional right, he may simply disallow all or any of his son to enjoy his own earned property and suggest them to make their own property, earn and possess it. it is His will to share his property with sons or with someone else.

Since property right is just a consequence of Right to Life, hence if some state government try to impliment it as right to education or employment or health care for citizen than it is rouge, corrupt idea, it is idea of making Individuals slave.
There can be no health care or education right as health care and education or home, or any such other facilities are Services/property.
One can get education only if someone works to educate him, if education becomes right, then the person working to provide education will become slave. One can get and possess a home because someone builds it and provides it. if right to own a home becomes a birth right, than it is rouge idea of making the workers slaves.
health care is possible because doctors, nurses etc works for it.
if health care is a birth right, than it is slavery for doctors nurses etc.

Thus, there can be only one right, and that is Right to life.

Bal Gangadhar Tilak put it promptly. “Swaraj Mera Janm Siddh Adhikar Hai” He did not mean that britishers should leave india and there should be HE to rule on India.
he meant as a human Self Governance is his birth right, that is, he denounces supremacy of any other government over his individual existence. That denouncement of government included any foreign government, or Indian government including the present government. he was extreme support of Liberty of Individual existence.
Self-Governance or right to life includes all consequential rights, of which property right is main as without it, no other consequential right of life is possible.. yet property right only means the freedom of action to earn and possess and hold a property/thing/object/service.

Their main opposition is reservations, but then to make a strong political presence they had to say that they have a “better” plan for the poor students, and that is free education/subsidized education etc etc for all.

Another problem with faulty economic thinking is distortion of logic through common sense illusions via brainwashing.
My best example in this regard, and soon I am going to write a short story about it is this:

A student comes to his Physics teacher after the Columbia shuttle disaster and says ‘Sir I have found the perfect solution to solving these problems of falling things. We must abolish the law of gravity, if we remove the law of gravity, and punish everyone who allows any object to fall towards the earth, this will reduce the losses by a great degree, the extra money saved will be HUGE and will stimulate the economy thereby helping all the people’

Right when you say things like ‘When you abolish the law of gravity the benefits will greatly outweigh the effort taken, and it will create more social prosperity’ it becomes difficult to argue with this kind of stupid logic.
YFE and other people who support public education have the same argument, I try to explain them that by using forcefully extracted private money, those many number of businesses will never be able to start, but then they say that by teaching everyone, these kids will be able to get at least some job, then make a LOT of MONEY, and then creating more prosperity for everyone and more jobs to the rest of his batch mates.
And now he thinks that he has out smarted you with his economic analysis. And the truth is that without readily available facts and figures you can’t explain him this stuff.
Another similar discussion which happened with me and my boss, where he honestly believed that outsourcing jobs to India, and China makes people more unemployed, and the current recession is caused by that(he is Indian too), when I tried to explain him the logic that when a laptop making company sends his laptop manufacturing to China, it reduces the cost of the laptop by half, that means more businesses are profitable, companies’ profit margin has increased and now more people are benefitted and companies can hire more people.
To which he simply said “well how many new jobs are created by that, like 1 job for every 10 jobs lost?” Since I had no figures at hand(coz nobody collects them) I couldn’t answer it, though I tried to give the same example for 20th century movement against machines using the same argument, but machines created a lot more jobs than they took away, but it was all futile.  His common sense seems to show him that job of a software programmer disappeared when it was handed to someone in India.