Lyric discussion by rasg 

Cover art for Chant Down Babylon lyrics by Bob Marley and the Wailers

Babylon is not capitalism, exactly. Babylon is the nation that has historically "cast a stumbling block" in front of Jah's children. Babylon is referred to in the Old Testament, and continues today in many forms, metaphorically being a problem for Rastas. Most specifically, though, through the Roman adoption of Cristianity and mixing their native culture (which they got from Babylon), Babylon and the doctrine of Balaam is seen in the Roman Catholic Church.

The "system" is Babylon, but it is not as easy as saying "capitalism" is Babylon. (Though I&I don't like the doctrines that end in "ism", anyway. Ism and Schism, from "One Drop")