Capitalism doesn't actually lead to juggernautic growth without state protection. The merger boom of the late 1800s, back when there was a great deal more competition than there is today, ultimately failed as the larger, bloated firms couldn't cope with their smaller, leaner competitors. And the profitability behind these mergers (new capitalization and issuance of stock) was often the fuel for the new competition. It wasn't until government began "regulating" the trusts (ie, protecting them) that larger and larger firms could hold market share and drive out competition. EF Schumacher in his book Small is Beautiful illustrates how gigantism doesn't naturally work in an economic environment.

As for encouraging greed for its own sake - raw capitalism encourages a server's mentality. When facing competition, you can't profit without serving your customers and adding value to their lives. It's only once government protects firms from competition that a mentality of greed can take over, because the firms and the people in them are no longer forced to win over the consumer. They need to only win over their corresponding government regulatory agency.