No, this is objectively wrong.

First of all, our current level of population is already overpopulated. We would do immense damage to the earth at our numbers regardless of how our society functioned. 7 billion indigenous people would also be making an enormous impact on the planet.

Second of all, we could never support 7 billion indigenous people. The literal only reason we can support our current population levels is because of industrial farming and our ability to make nitrogen enriched fertilizer.

Thirdly, there is nothing about capitalism that necessitates those thing, and nothing about communism or dictatorship or any other form of resource distribution that inherently avoids them.