No contradiction that I can see. Cheating may benefit some people short term, but it hurts most others. So that it is to the benefit of the majority to establish rules and laws that make cheating illegal.
Capitalism goes hand in hand with democracy. People rule, and people have to make sure that their elected officials make and uphold the laws needed to keep the system working for everyone's benefit.
Elected officials have to be accountable. They have to be thrown out of office, or in extreme cases even imprisoned, if they don't do their job. In a system where an elite rule by edict, one is at the mercy of that elite. If you're lucky, that elite is competent and is after the well being of the people. But that would be sheer dumb luck, and likely to change at any time.