That's not true and misleading. Capitalism promotes removal of unprofitable content. If your audience is the general public moderation will fit that, if it is people who are into something undesriable and unpopular it will follow suit.

A person can be harmed and that harm can be popular and profitable even for sites like reddit or HN even. The law protects the one innocent or wronged person first before the masses.

For example, it may be popular and I will agree with saying "the only good nazi is a dead nazi" however in the eyes of the law, if Nazis felt actual threat and suffered trauma let them sue me in court and if HN did not take down my content after it was flagged (no obligation to proactively monitor) then YC gets sued also.

There is a nice real place between utopia and dystopia.