The core issue here is that you don't have accurate or consistent definitions for your terms, so you wind up making inaccurate and inconsistent straw men. Like I said, hammers and wrenches. This is the cognitive dissonance about capitalism that bugs me most.

If you want to have a valuable discussion on the topic, you need proper definitions of "capitalism", "Marxism", "socialism", and "communism".

You're very clearly using "capitalism" to mean the same thing as "market economy", as opposed to "centrally planned economy", which is not accurate.

You seem to be lumping "Marxism ", "socialism", and "communism" into the same thing, which you seem to define by "wealth redistribution" and "centrally planned economy". Such, I assure you, is not the case.

Capitalism is an economic system which operates by the formula I provided above, where investors (who themselves do not contribute labor to a company) extract profit by paying the workers (who do all the labor to generate value in the company) less than the value that they contribute.

Marxism is, at its core, simply a critique of capitalism and the general search for an alternative. Marx analyzed capitalism, most famously in Das Kapital, and revealed the inherently exploitative nature of the core mechanic of the system; that it will always, by virtue of it's fundamental principle, always result in the emergence of a wealthy investor class (bourgeoisie) and increasingly impoverished labor class (proletariat).

Marx's only principle was one you seem to agree with: systems naturally beget the systems that replace them, and capitalism is one such link in the chain. To return to the steam engine analogy, someone develops a dynamo to turn rotary motion into electricity, then eventually someone realizes you can run the dynamo in reverse, turning electricity into rotary motion. I agree with Marx that the change is inevitable, eventually, when the conditions are right. We're not quite there yet, so obviously any attempt is going to fail.

Socialism is simply an economic system that takes the wealthy investor out of the above equation: the workers themselves own the company, and instead of being paid in wages, the profits are divided between them. That's it. The most straightforward example is a worker co-op, which simply takes the familiar capitalist concept of investor and worker, and combines them into the same group. This still operates quite nicely in a market economy, with all the benefits thereof, and without needing nearly as much labor regulation as capitalism.

The most extreme version, and the one you seem to think is representative of the concept, is State socialism, where all companies are (in theory) absorbed by a democratic state so that every worker is an owner of every company. Personally, I think that could be possible in several decades if co-ops saturated the market and then iteratively federated, but jumping straight to central planning results in the failures with which I'm sure you're duly familiar.

Communism is a hypothetical, post-scarcity, stateless, classless, and moneyless society organized by spontaneous voluntary cooperation. Marx theorized that the fundamental pressures of capitalism would eventually concentrate so much wealth (and cause so much class divide) that the workers would topple the bourgeoisie and "loot the palace", as it were. In theory, if the concentration was great enough, the system previously established could support everyone by voluntary contribution and the resulting society would be sustainable without hierarchy.

Personally, I have my doubts we're anywhere close to that, but if current trends in automation and AI continue, we could very well find ourselves with no other option in a century or two. As it stands, communism has never been tried above the very small scale. Certainly, some attempts at a transitory system with the stated goal of communism have been proposed in good faith, and certainly some ambitious dictators have used that banner to con people into supporting them. But a hammer is not a wrench, and diligent propaganda doesn't change that fact.

Capitalism is irredeemable. It's mathematically certain to widen the class divide. The "regulated capitalism" you mention is just periodic spurts of state-socialism to bleed off a bit of the pressure. The success of that mixed economy speaks equally to the successes of capitalism and state-socialism, and honestly it's still not great. Why cobble two failed systems together to clumsily balance each other, when you can learn from both and synthesize them into a functioning system: Market Socialism.

The problem with capitalism isn't markets and competition, it's the extraction of value from labor in the form of profit, and concentration of that value into the self-perpetuating generational wealth of non-working investors. Divide equity of every company between its workers. Then you still have markets, you still have competition, and you still have socialism (the workers own the means of production).