Just recording a little something that just popped into my head so I can come back to it later:
Would capitalism work in a closed system (i.e. assume a nation with no external trade at all) with zero population growth and total abolition of interest? And by no interest I really mean NO interest whatsoever, none of that Islamic banking pussyfooting about the issue by calling interest something else, mind you.
I think about sustainability a lot, and it seems to me that the first serious step towards sustainability would be to halt population growth. If we're going to get everybody to achieve a reasonable standard of living, it would make things a hell of a lot easier if there weren't more mouths to feed with each passing day, no?
Anyway, I'm-a leave this here for now. Hope I remember to come back to this...
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On one hand, you raise an interesting point. I'm assuming finite natural resources is also one of the hypothetical conditions. If this is the case, then I think the only system that works is a community based model, such as that used by the natives of the Americas prior to European contact. Note that this isn't communism, since there is no system of currency whatsoever.
We're left with three fairly big howevers.
Firstly, is such a system ever likely so exist? Of course, as shown by the current state of the world, an infinite amount of natural resources is not required to sustain free markets, just a disparity in terms of where they're located. I know that your argument is framed in terms of sustainability, which brings us to the second point.
I know you take some differences with democracy as well as capitalism. I think Winston Churchill provided a good answer for this when he said "...democracy is the worst form of government except all those other forms that have been tried from time to time." Let's face it, at some point we as a species are going to exhaust this planet of it's natural resources (more on limiting population growth in the next paragraph). Let's also keep in mind some of the major motivating drives of our species; sex, power, social approval, and, where it can buy such things, money. One of the greatest boons of capitalism is that it provides crystal clear behavioral motivation for production on an individual level, thus stimulating, among many other things, scientific breakthrough. Of course, this is also on account of the high degree of specialization that a capitalist system affords its members, much like the cells of a complex organism. If there is another economic system that is nearly as capable of this, I'd like to be enlightened. I'll admit my background is not in economics.
Lastly (and I'm sure you'll take some difference to this, but nonetheless) one of the hallmarks of a just society is the degree of individual freedom it affords its members. A society which permits a high degree of self actualization and socio-behavioral freedom reaps dividends through the productivity, (relative) intellectualism, and overall happiness of its members. I know the word humane gets tossed around a lot, but really, there is no humane way to truly limit something like the number of children people will have. It's like the difference between education and indoctrination. As hopeless as it may seem, I think it is our responsibility to at least attempt to educate as many of our fellow humans as possible, whether or not they want to learn. Most secular scientists would probably agree. Lets not forget the humanist part of secular humanism.
Maybe being in Malaysia is leaving a bad taste in your mouth. Remember that the brand of capitalism you're currently most familiar with is hopelessly entangled with theocratic dogma. I think, overall, picking apart bronze age religions is more productive than picking apart the only political-economic system that seems able to motivate the lowest common denominator to willingly get off their asses. Is it perfect? No, but neither are human beings in general.
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