There is only one problem with Capitalism. Its that the equation between supply and demand don't balance.
Capital Comes From Production
Capitalism favors accumulation of capital (ofcourse). The capital comes from production. A part of production is not consumed, its accumulated in form of capital.
More capital means more production in next cycle. Then even more in next cycle, and so on. This perpetuates because it makes its supporters (capitalists) stronger.
Capitalists Will Always Out-Produce Non-Capitalists
Politically, capitalist countries will always out-produce non-capitalist countries and therefore beat them in all material wars and gathering of human talent. Economically, capitalist companies will always beat non-capitalist companies because of sheer production.
Tried And Failed Methods Against Capitalism
Different techniques have been tried to beat capitalists in production. British Mercantilism failed, inspite of its control on markets (colonies) it just couldn't out-produce america (note that pricing is a derivative here, not a primary, because if you can out-produce you can always offer low price). German and Italian Fascism failed because of their focus on quality. Soviet Communism failed too, but why? Soviet State itself can easily out-produce private companies in capitalist countries and Soviet Union was a very large country, in population, area, raw materials, everything needed for production.
Note that other communisms didn't fail. Cuba survived.
Why Did Soviet Communism Failed
Soviet Communism failed because it was focused on accumulation of capital. Soviet State invested heavily in production. Be it factories or power plants.
Soviet Communism not only failed, it failed faster than Capitalism.
The reason Soviet Communism failed is that it don't balance the equation between supply and demand. There was a lot of supply, but there wasn't enough demand. You know demand as an economic term means not only there is desire to buy there must also be money available to buy.
Soviet Communism didn't pay the workers and the managers enough. They were paid just enough to get by, not get anything comfortable, yet alone even any minor luxury in life.
Lots of stuff was produced and stored and ruined in godowns.
This ofcourse leads to a regressive cycle. In next cycle less stuff is produced because the state bureaucracy see little demand last year. This goes on for a while till everybody got fed up and basically resigned from communism ideal.
Why Would Capitalism Fail
The right way ofcourse is to produce what people desire. Things of utility and quality. Capitalist countries are great in this. They not only out-produce in quantity, they also out-produce in quality and in whats needed and wanted by consumers. This is, however, where goodness of Capitalism ends.
You see Capitalism to be capitalism has to forever accumulate capital. It cannot afford distributing everything that is produced to workers and managers. Its death of capitalism if that ever happen. Some must be saved for next cycle. This is the poison of Capitalism.
Karl Marx was half right ofcourse. Production should be distributed to workers and supervisors. But thats only half of what should happen. The other half is, it should be distributed to entrepreneurs (managers of business), or you would soon have no wealth to distribute.
Makers of wealth is not workers alone (as Communism think). Makers of wealth is not entrepreneurs alone (as Capitalism think). They are both. All the surplus thats left after costs of production, and the costs includes living costs for workers such as rent, food, medical etc, must be distributed to both workers and entrepreneurs (managers).
Why Did Cuba Survive
Cuba didnt go on path of extreme production. It never focused on accumulation of capital. Whatever is produced is more or less consumed.
Cuba distributed whatever is produced more or less evenly. But its not the reason why it survived. You see even Feudalism survive.
The Equation Must Be Balanced, Equal Distribution Or Not
Whats produced don't have to be distributed evenly. The distribution can be very lop-sided. System will still survive. The only requirement is, nothing is kept aside. Everything thats produced is consumed by someone.
See this is why capitalist countries thrive in wars. They produce more and consume less, and still survive. Its because a lot thats produced is just destroyed.
As long as the equation between supply and demand, which is another way of saying production and consumption, is balanced, system survive. It don't thrive though. You cannot have it both ways. Either you have a steady state or a dynamic state.