The problem OP is that your concept basically resembles the current system of socialism and communism. The reason all types of government eventually fail are all related - the greed of people in power. Eventually it might even be the downfall of the system we have now.

Don't get me wrong, in concept what you are saying is completely logical, and maybe, sometime far in the future, we will reach a point of evolution where those types of systems would work. Personally, though, I would wager we are still a couple thousand years out from that, if ever. A greedier, more violent, warlike race has never walked this planet. Between those who would ruin everyone for their own gain and those who have become so apathetic to it, there is zero chance of a system like that working where it wouldn't eventually collapse.

Capitalism may have its' flaws, and there is no debating that, but it is the only system that has made it even possible for people to progress upward by their own design.