Incorrect.

What you see in Scandinavia is actually a mix of both.

There is no problem with Capitalism as an ideology for Trading activities, as long as it's secondary to the ideology used to manage people's lives in society.

The problem is when Capitalism is the only thing used to manage everything in a country, including people's lives in society, because its an ideology to maximize resource use and trade, which is not at all the same as maximizing quality of life (simple example: heavilly poluting industries maximize resource use but worsen quality of life) so you need people-oriented (rather than trade-oriented) ideologies to manage Society for people, something that Capitalism won't do because it aims to maximize wealth without caring about the distribution of it or any non-monetary elements such as the Environment of people's quality of life.

This is also an answer to your other comment on a question of mine: what I suggest instead of Communist or Capitalism as the ideology for rulling a country is a people-oriented political ideology such as Social Democracy and under it Capitalism for Trading, heavilly regulated.

Capitalism is very bad for guiding Society, but it's pretty decent at managing Trading as long as it's subservient to a political ideology whose aims are people focused, not money-focused.

You will notice that Capitalism worked somewhat decently up to the rise of Neoliberalism in the late 70s - Neoliberalism as the name indicates is all about removing oversight on Capitalism by any other ideology, mostly by the State removing itself from the work of Regulation (which is even anti-Democratic, since it weakens the power of the vote vs the power of money), thus making Capitalist objectives the ultimate objectives of Society and the only guiding hand be Money (with makes power distribution be extremelly uneven), and the natural result of that was that anything to do with quality of life and fairness in Society was entirelly dropped from the mainstream political discourse and it's now it's all about "Greed is good" and maximizing Economic outcomes quite independently of the distribution of the wealth thus created or the damaging side-effects for Society and the Environment of it.