High quality hand made clothes still exist and people do want to pay for them. Mass produced clothing made in sweats shops are what the majority of the people buy because that is where the capitalist companies drove the production.
The loom dropped production costs immensely - even hand-made clothes are done with premade fabrics, they dont do it from scratch.
Mass produced clothing exists in many industrialized countries - typically the premium stuff; the sweatshop stuff is quite cheaper, and customers are happy paying less; its not capitalism, its consumer greed. But nice story.