My last several posts were intended to make a point, my friend Hatrack. It is that you make broad generalizations both for and against ideas without responding substantively. Capitalism is a form of market enterprise, where the markets are defined into certain categories. It is a generalization of a method of organizing an economy and a shorthand to represent various elements of the system. Socialism is also a generalization of concepts of government providing for or controlling aspects of an economy. Neither form of economy exists in the real world, anywhere, in a pure form, or ever has.
Externality is a concept familiar to all economists in any discussion of capitalism and market economies. It is not always considered a bad thing. For example, the siting of a facility in a community has "externalities" unassociated with the actual production of the goods/service marketed by the company. On the positive side, the wages paid to workers, and expenses of the enterprise circulated in the community (e.g., lumber bought to build the facility) are positive externalities, just as the pollution, burdens placed on local infrastructure, and such, are negative externalities. Pretending that they don't exist is not rational nor consistent with discussion of the costs and benefits of capitalism as a system. Surely you actually recognize that?