you might define "work" - historically, it's been plenty succesful in producing wealth and conquering the world - if our space exploration is ever to get anywhere significant, it'll take capitalism to underwrite it i bet.
A better question is, how well does it work in comparison to other economic systems. Despite it's many flaws, I'm not sure humanity has yet to find a better system -- although we keep modifying capitalism in various attempts to squash its darker, nastier aspects, to greater or lesser degrees of success.