From Libertarian Michael A. LaFerrara at Principled Perspectives:
So why would King uphold the moral principles of capitalism in his most famous speech while repudiating it in his politics? It’s obvious that King didn’t understand capitalism or fully grasp the moral implications of the Declaration of Independence that he so eloquently honored.
He undoubtedly viewed the America of the 1960s as capitalist, when in fact what America had was a mixed economy; a mixture of economic freedom and government controls—that is to say, an economy corrupted by heavy political interference, which included the virulently anti-capitalist Jim Crow segrgation laws. America in the 1960s was just emerging from a time when large segments of blacks were legally oppressed and hence unable to enjoy “the riches of freedom and the security of justice” that is capitalism. Blacks, King failed to understand, were not victims of capitalism but of statism.
King’s legacy includes an end to state-sponsored segregation and oppression—a monumental achievement. But his democratic socialist political policies also “succeeded,” strengthening and entrenching the mixed economy in America, which he mistakenly perceived as capitalism—the result being, in turn, to reduce economic opportunities for many poor but ambitious people, including African-Americans.