I believe it is possible for us - all - to adapt regarding the cultural impacts, changes to Art, and decoupling of practice from creation (for things like music, drawings, movies, etc.). In a crude but useful analogy, people still run marathons despite the invention and widespread adoption of cars, bikes, etc. So people will still make Art. People will still appreciate it.

The problem is that art-making-as-a-job is doomed; so are, in the long run, many other 'knowledge worker' jobs, although we can't for certain tell which ones are going to be replaced fully by AI first.

So the hardest problem is not the one relative to creative activity (for pleasure, self-expression, or catharsis), but economic activity. In your words, "Capitalism doesn't work anymore". We can discuss to what point whatever replaces our previous system will still be 'capitalism', but it is apparent that - if it works - it will be very different in many of the aspects we take for granted.

My personal (and likely naive) opinion is that a large part of the political discourse will shift towards trying to define what is -necessary- vs what is -luxury-, as the rewritten order will shift to ensure that all people receive all that is "necessary" and work (whatever it looks like) will be for "luxuries". I don't like it, but I guess that this will be ultimately the question dividing "left" from "right" for a large chunk of this century.