Louis XVI was not incapable but he did lack a lot of the qualities and knowledge necessary to a monarch. Some are due to its education, others are due to his own personalities.

First, it is to be remembered that Louis XVI was not born to be king. His father Louis-Ferdinand should have reigned after Louis XV but he died before. Plus, Louis XVI had an older brother ( two actually but one barely lived a year ), the duke of Burgundy Louis-Joseph-Xavier. This is more important than it looks in the development of the future Louis XVI ( born Louis-Auguste ). As he was not supposed to be king, not even the heir, his education was that of a future prince and not future King. He was more educated for court life : foreign language ( Louis XVI spoke an excellent English as well as Latin ), dancing ( which he never liked ), ...Etc Very little education in economics, warfare, ...Etc

When his brother the Dauphin Louis-Joseph fell sick around 10 years old, the future Louis XVI had to remain close to his dying brother and act as a companion, a playmate. For a ten year old, Louis-Joseph was a very clever kid, or so we are told and so the people around him back then were told. The parents and tutors never ceased to praise him for his brightness, his intelligence. Louis XVI felt it and when Louis-Joseph died in 1761 he lived in the shadow of his late brother. " At your age your brother knew that, did this, ...Etc ". Then Louis-XVI parents died soon after, his father the heir in 1765 and his mother in 1767. He was the heir of an old King ( Louis XV ) extremely afraid of leaving the Kingdom in the hands of such a shy little boy.

Even as heir, the education of the little Louis-Auguste was not improved. He learned geography, history, religious texts, ...Etc But still a clear lack in any economics, ...Etc And he grew quite shy ( partly due to his physical appearance ), he never liked court life, ...Etc

When he became king in 1774, aged 20, things looked quite good for him and Marie-Antoinette despite the situation of France in terms of economics for example. He enjoyed a lot of popularity as we saw during his coronation in Reims and in Paris. It is hard, even impossible to say how popular he was throughout the Kingdom. But it gave him confidence in himself for the moment.

He lacked the ability to take decision. One of his many mistakes was to be indecisive when facing the nobility and his councillors in terms of reforms. Some of his ideas would have made him an excellent and very popular monarch, including with posterity ( abolition of the "question", that is torture, more rights to the Protestants and the Jews, ...Etc ) but most of the time he did not have time or was opposed in doing so. Some say that one of the most important points in his reign was the incapacity to impose a tax for everyone, including for the nobility and the clergy ( note that these orders did pay taxes in the Ancien Regime, including the capitation ). Hard to say if this really changed anything in what was to happen but it illustrates a certain lack of authority.

Would the Revolution occur with a different head of states ? Impossible to say. On the other hand Louis XVI can be credited with preventing it from being even bloodier. Probable someone like Louis XIV or even Napoléon would not have ordered his troops ( the Swiss for example ) to stand down. As a quality, Louis was a compassionate person; both religiously and " humanly ". During his travel to Cherbourg in 1786 he was very affected by the sight of the people. Some cheered him some did not even bother to nod but all looked very poor. Louis only travelled twice in his Kingdom, to Reims and to Cherbourg. Thus he did not have a very good understanding of the state of the population, until Cherbourg and he then got to work to reform a lot of things. His piety also, probably, prevented him from accepting the idea of a constitutional monarchy. The king did not hate all the revolutionary ideas, far from it, but one of the things that blocked him was the loss of the " divine nature" of his position. It was too much " written " within him that kingship was granted by God's will. Not by the people and certainly not by the Nation. When he refused several times the Civil Constitution of the Clergy, it was because according to him the Nation could not dictate the clergy. This shows that he had a strong will, because he fought this idea for a time before signing it. More than once he was able to show authority. In 1789 during the General Estates he shouted " I am the King! ".

If we resume, yes Louis XVI was a capable ruler. Despite lacking education in several important fields he was very clever. Perhaps the most learned monarch France ever had and perhaps one of the most clever of his time. He had a lot of knowledge in science ( he was after all a monarch of the Enlightenments ), languages. According to most people, of his time and today, he was good-heartened person, not mean and shunning cruelty. People who learned a lot about him as well as naval historians and enthusiasts remember him for a monarch who greatly improved the state of the navy, making it able to beat the Royal Navy. Under his rule and with his supervision sciences thrived in France. The first balloon flew ! Exploration expeditions were launched and closely followed by the King due to his fascination for geography, the most famous being the expedition of La Pérouse. He had a lot of qualities. But he lived in a time when the people, the Kingdom and the economy struggled. There we found his issues. We can say that Louis XVI was a good ruler, but not good at it considering what period he lived in. He was not responsible for the start of the Revolution as it was mostly due to happen some time or another and in some way or another. On the other hand he brought the fall of the monarchy ( as a whole ) on himself by not accepting entirely the idea of a constitutional monarchy. The Revolution was certainly too much for his shoulders.

Note :

The historiography of Louis XVI is very lively and difficult. In France and I suppose elsewhere as well. The image of Louis XVI can change dramatically from one historian to another. From the martyr king to the poor big shy man and of course the middle. One of the turning points in the historiography of Louis XVI is the work of the couple Paul and Pierrette Giraud de Coursac. They were excellent historians, the first to use some archives and documents on Louis XVI that had been forgotten since the Revolution. But, they were accused, not without reasons, to be too involved in the memory of the King, to have " too royalist " a view. Even with these critics, their work is fundamental and everyone truly interested in Louis XVI should read them ( something I have to finish ). The facts in their books are true but it is how they interpret it that can cause issues. On the other hand, every honest book that deals in a way or another with Louis XVI use the Giraud de Coursac's works since they were published in the 60s, 70s and 80s. Some of the greatest historians in the world, whom were never accused of taking any sides and were objective ( take this word as you want ) have praised their excellent work. They were necessary to lighten a new image of the last monarch of the Ancien Regime since historiography was so impregnated with revolutionary images ( the stupid tyrannical pig king ) or the early Third Republic teachings ( which trying to establish republicanism in France was very negative toward the Ancien Regime ).

Sources :

• Histoire de France by Jean Carpentier and Albert Lebrun
• Louis XVI by Bernard Vincent.
• Nouvelle Histoire de la Révolution Française by Jean-Clément Martin.

I would also add that the Memoirs Beyond the Grave of Chateaubriand give us a very short, but fascinating view of Louis from the point of view of a noble whom at the time he met Louis XVI ( but not when he wrote his books ) was, if not hostile, not fond of the court. We have to remember that with rulers, be it kings, presidents and whatever, their personality is very important when we want to learn about them as rulers.