[lowbloodsugar]

You are correct in your assessment of capitalism, and wrong on your prediction of the outcome. The situation you describe is one where an entity (the government) offers services for a fee. Some of its customers, the citizens, are captive. These customers' switching costs are enormous: they must leave their country and go to another one. Another group of customers, have much lower switching costs, in fact, negligible switching costs compared to their revenue: corporations.

The natural outcome is that the entity makes every effort to meet the needs of the corporations, and zero effort to meet the needs of the citizens. Indeed, it can reduce services to the citizens while increasing their costs, at the same time as doing the opposite for the corporations: reducing their costs while granting them monopolies and regulatory protection, for example.