Clinton jumped in after moderator Anderson Cooper asked Sanders about his proclaimed identification as a Democratic socialist and support for the social policies of countries like Denmark and Norway.
"When I think about capitalism, I think about all the small businesses that were started because we have all the opportunity and freedom in our country for people to do that and make a good living for themselves and their families," Clinton said. "And I don't think we should confuse what we have to do every so often in America, which is save capitalism from itself."
"I think what Sen. Sanders is saying certainly makes sense in terms of the inequality we have," she added. "But we are not Denmark. I love Denmark, but we are the United States of America, and it's our job to rein in the excesses of capitalism so it doesn't run amok and it doesn't cause the kind of inequities we're seeing."
"But we would be making a grave mistake to turn our backs on what built the greatest middle class in the history of the world," Clinton said.
Sanders defended his support for universal healthcare and paid family leave, saying "every other country on earth" provides that sort of social safety net.
He said he doesn't consider himself "part of the casino capitalist process by which so few people have so much and so many have so little."