Welcome to the world of common myth.
1. So far, anyway, democratic governments have succeeded best when at least some degree of free market economy has been preserved. They are not interchangeable terms, as the explosion of free market success in China shows; moreover, the success of social democracies in Europe shows that you can regulate capitalism for the interests of society without completely discarding its benefits.
2. Success or failure has nothing to do with voting and democratic participation, which is the actual basis of democratic government.
3. Why, Loki, I never realized you were a Social Democrat! And here I thought you voted for GW Bush this time around!
4. Fascism is distinct from the economic considerations you listed above; in fact, capitalism usually flourishes in fascist societies, as fascism is highly corporatist. Recent American shudderings towards proto-fascism have included the discarding of decades of social programs towards massive corporatist privatization.
5. And, as discussed above, socialism and capitalism can also work together to form a regulated hybrid that melds the best of both systems.