The story you tell about China's rise is exactly the same story I told, I believe. It started with low wages and short-term thinking by rich owners and politicians all too happy to take their bribes, but over time it has turned in a complete inability to compete with China on manufacturing. But one thing is certain: this policy was never a popular demand, American workers have not been happy to let this happen, and American politicians did not do it to appease their voters. It has been a move by and for investors, with American politicians supporting it for their donors. Co-ops rarely move their operations off-shore.

The same thing might have happened with IT and India and Easter Europe, except that IT people are easy to move around and the actual IT drivers have been careful to move the main talent back to the US, even while outsourcing huge amounts of work to those places (I am a Romanian programmer working for an American company). Also, the US has been effective in Eastern Europe (and I believe in India as well) in doing what it couldn't do in China: it has retained all of its IP while doing this, at least for now. Even while Eastern Europe and India have more programmers than the US and EU combined, there are basically 0 software companies creating their own products in these places. When our government needs an OS, it buys Windows from MS. When it needs city planning software, it pays most of the money to Oracle to build a system on it. People are buying games made by French or American companies, quite likely with local programmers.

And one of the major reasons for which the India and Eastern Europe have not been able to profit from IT the way China has from manufacturing is that India and Eastern Europe have bought much more into capitalist ideals. Speaking from mine and my parents' experience in Romania, the joy with which we the Russian and later Chinese-inspired "socialist" dictatorship's end was celebrated was hard to imagine. The hopes for a brighter capitalist future like we'd only seen in brief trips and old movies were high. Everyone was excited about the prospect of private investors taking old, inefficient communist-era factories and running them with modern equipment and modern management practices - Privatization was the word of the day. The state, under IMF and World Bank and US guidance, was to quickly get out of the way, institute free market policies, and watch the money pour in.

The actual result was that corrupt politicians sold those factories to corrupt investors for negligible amounts, investment in modernizing factories was negligible, they were quickly out-competed on the free market by cheap goods from China and Turkey, and were soon closed down and most people laid off. Just like in the US, countries that had had engineers, production line designers, chemists and so on; and manufacturing capacity that had been able to at least half-supply the country with half-decent (only half, mind you) goods locally became entirely dependent on imports. Any strategic and long-term goals for having these industries preserved were sacrificed on the altar of free markets and private rights.

And I do agree: attributing all of these problems entirely to Capitalism is too simplistic - there are other factors, such as globalization, corruption, the culture war which has become a major motivation for many people beyond anything else, demographic shifts and so on. However, the basic problem of the rich controlling the entire economy and putting their own profits before almost any other consideration is a major driver of all of these problems, and a major driver of their continued existence.

For example, you complain that the US was unable to produce N95 masks for the pandemic, and you are absolutely right. But do you believe that the people who designed the policies that led to this situation are surprised? Do you believe the companies that moved their textile and other production to China regretted it when they saw they couldn't produce these masks? Do you think they would choose differently today, had they known?

Even the pandemic itself has only really affected working people. Stocks have been booming, CEOs quickly moved to work from home, they were comfortable in knowing they will be able to afford any medical expenses needed to care for them, they had access to any PPE they required, and had plenty of room to have any kind of private parties they wished to assume the risks for. I don't believe that we will see any major shifts from the top because of Covid19: the system worked perfectly for those for which it was designed.

And yes, policy blunders like the 1800s treaty you mention do happen, and the political gridlock in the USA is unlikely to fix it any time soon. I'm not even sure it was so much of a blunder since, until relatively recently, most of the shipping from China to the US was actually from US companies' factories to US companies' warehouses or more complex factories. Now as Huawei and Alibaba and myriad others are starting to sell their wares directly to US consumers and competing with Apple or Amazon, the act is becoming far more troublesome. But I would not be surprised to hear that there are major lobbyists for other industries explaining how much money they would lose if shipping from China becomes more expensive.

And to be clear, the USSR or China are not socialist by any stretch of the imagination, even less so than being democratic. The USSR and its many sattellites were state capitalist systems, with the exact same profit motives as any capitalist system, just working for the dictator class on top instead of the more vague class of investors, and of course with even more direct control of the population and resources than a democratic capitalist society. China is a more complex mix between state and free trade capitalism, with all of its enclaves where private property is supported.