No, the biggest problem with our current form of unrestricted representative democracy is a large, perhaps even majority, of the people have learned that they can vote themselves benefits and money from the taxes while passing those taxes onto others. What you mention is a problem, but not nearly as big as the self entitlement vote.
As to your whole socialism thing. Yeah, right, we all will transform into Mother Theresa overnight and never ever do anything selfish again. Good luck with that. If you haven't noticed, we have a large number of Americans who chose not to work at all because they can live off the government and still have a level of wealth and standard of living greater than the majority of middle classes in most other countries. And that number is only as small as it is because in the 90's welfare reform was passed, otherwise we would be seeing even more of them.
No. Democracy needs to be limited to those who have shown to care and are willing to place the welfare of society above their own. A period of service in a way that is selfless and places the person in service at great risk with little to no chance of self profit. I.E. Military service, police and Firemen.
Only those who have done such service for a specified amount of time should be allowed to vote or hold political office. Further, any seeking to hold a political office should be required to complete a professional training course and serve through a series of apprenticeship posts.
The economy needs to be removed from government interference except to enforce rules of fair competition and minimum safety (a few others, but not spelling it all out here). The government should pass no law protecting existing business or any law that hinders the rise of competition.
Methinks you are a fan of Robert Heinlein's "Starship Troopers."
I'm not so naive that I don't think people will be lazy sacks of crap if they could afford it. I understand the power of an extrinsic incentive to get people to do the jobs that need to get done. My problem is with how automation isn't used to replace work, it's used to replace workers. If automation continues at it's current rate, we will eventually have to just "create" jobs for the sole purpose of having consumers to buy what the machines make. All previous forms of communism/socialism have failed because they still had a leader class that decided how the wealth was distributed (and funny enough, they distributed it to themselves). My proposal, essentially the Project Venus proposal, implies that we give all the powers of wealth distribution to a computer network. The main points of failure are limited to having people fulfill the necessary roles of government and public workers. It's true that there does need to be some form of incentive, just due to human nature, but this incentive doesn't necessarily have to be wealth. I've always admired the "starship troopers" solution, of democracy and other "freedoms" for those who serve these social roles. The main issue is to stop rewarding automation as a path to personal wealth, but not deter it as a path to universal prosperity.
I agreed with almost everything that DVSentinel said except a little on the last part; capitalistic business WILL continue after a shift towards socialist utopianism, since capitalism stems from basic human behavior and economic theory. The issue I have is with how this competition has always benefited the companies more than the consumers, and this competition is inherent to obtaining wealth. That kind of competition would have no meaning after a utopian shift, except for the same way that we find it on internet forums. To the best of my knowledge, nobody is being paid to post here, and yet we still have a mild competition to give better arguments, facts, proposals, etc. Personal industry would be limited to intellectual, artistic, and athletic ventures, and would be almost universally unpaid. I still believe that there will be human advances of every kind that stem from unpaid or grant based ventures, and that it will progress at a similar or even faster rate to what we have now.
I still acknowledge that the vast, VAST majority of people will just stop doing anything, so there are legitimate flaws. But, the people that will do NOTHING are the same people who are just coasting through life right now; it's not like society is depending on them right now, anyway. The ultimate hope is that everyone will have the chance to figure life out, be productive or consumptive at their leisure, and promote a peaceful advance of humanity. As a libertarian, I acknowledge that nobodies liberties are completely absolute, but I feel that modern capitalism is an infringement on our liberties; no force, physical or social, should be used to make people waste their lives needlessly on jobs that not only don't benefit them, but don't benefit society. (I'm talking about you McDonalds)