Third way is not democratic socialism.

Democratic socialists always get gulaged when the revolution comes.

"Democratic socialism has never been tried". Both India and Israel were founded as democratic socialist states and both gave up that ideology.

The problems with post soviet Russia and the current USA are the democracy part, not capitalism. Huge amounts of govt corruption waved away with talk of "our sacred democracy". Countries like China and Vietnam that have retained authoritarian govt but introduced capitalist market reforms have lifted huge swathes of their people out of poverty.