It depends on what people mean by saying it works. Clearly, the way we live now is unsustainable. The world's escalating population, climate change, insects disappearing, rain-forests getting smaller, and a whole host of other issues regarding the degradation of the environment, are very worrying indeed. Of course, one might argue that it is modern industrial society rather than capitalism per se that is the main culprit here, but they are deeply intertwined.
Let's just consider a few other detractions of modern capitalism.
Capitalism creates gross inequalities. Indeed, in the USA, apparently the bottom 80% of people have a mere 11% of all wealth! I find myself unable to adequately convey how utterly shocking this is. 80% (4/5ths) of people in the USA only have 1/9th of the total wealth? So just 20% (1/5th) of them have the other 89% (8/9ths) of the wealth? This is a complete disgrace beyond words.
Capitalism has killed many millions of people, even if only indirectly. Consider the Native Americans and Africans captured to become slaves. Consider those who died as a result of poor health care, poor housing, overworking in unsafe environments. Consider those who have died from pollution caused by corporate greed and from drugs over-sold to consumers. Consider the members of the armed forces of capitalist nations that have been used as canon-fodder in wars to protect and enhance corporate interests.
The rise of modern capitalism and the introduction of the division of labour to maximise profits has resulted in many people living their lives as wage slaves, obliged to do work that is dull and repetitious. Repetitious work for five days a week taking up most of the day is surely deeply unsatisfactory and unfulfilling. Indeed, a good proportion of the population seem to effectively clock-watch, hoping that 5 pm and the weekend quickly roll by so they can let their hair down. Thus they are effectively wishing their lives away. All this is somewhat ameliorated by the camaraderie of the workplace. But, considering they live such brief lives, is it a satisfactory state of affairs to engage in unfulfilling work wishing their time spent doing it quickly passes by?
Democracy too is deeply flawed. In order to win and keep power leaders are incentivised to pander to the electorate and avoid, as much as possible, unpopular policies. They slip and slither and slide around every issue to make sure the voters keep on voting them back into office. This often results in very bad decisions that are highly detrimental to society as a whole.
So, my conclusion is that modern democratic capitalism does not work, or at least only works extremely poorly. It is a poor show indeed if it is quite impossible to improve upon this dire state of affairs.
So, will any other system lead to even worse outcomes? One thing is for sure. Any alternative system can't just be cobbled together without a huge amount of forethought and planning that will be necessary to deal with all the immense complexities and problems engendered by millions of people interacting with each other. The most noteworthy problem is the tragedy of the commons.
In my opinion, so long as people are estranged from each other, so long as each person is an island who only cares about his or her own self-interests and of their close family, so long as prestige and adulation are measured and evoked by a person's wealth and fame, then any type of "socialism" or "communism" will be impossible. The tragedy of the commons will ensure that.
It is therefore absolutely essential that we have a feeling of connectedness, empathy, and affiliation towards others, or at least for those in our immediate community. We require, in other words, closely-knit communities that encourage co-operative and caring behaviour, that encourage empathy and a feeling of responsibility towards others. That is, we require social harmony. But it seems to me that our modern world could scarcely be more antithetical towards this ideal. For it fosters an attitude where our prestige and worthiness is measured by our wealth. Unfortunately, it seems to me that multiculturism is also antithetical to this ideal since a closely-knit community cannot be achieved when the newcomers do not integrate and assimilate.
I see the modern world, global capitalism, as being deeply antithetical to our deepest needs and what makes us happy. This constant striving for economic growth doesn't appear to be making us any happier and is destroying the planet to boot. We seriously need to find a better way to live.