Anarchist Socialists believe in an immediate change to a society with no state. Marxist Socialists believe in using the state as a transitional phase to true Socialism - with no state.
Now you see, you're last point would work great if you replaced Socialism with Capitalism. Look around you, it just doesn't work. Surely this very thread goes a long way to proving that?
Marxists believe that communism is the final state, which in it's ideal is no state. However whenever people come together to run a country it forms a state. State is just governance, and it's hard not to have that. The difference is that it's a people state, the people run the country. Even though it's a state not of the rich, it's still a state, and since everyone a part of the state, its a HUUGE state.
Peoples produce needs to be collected and redistributed. This is so prone to corruption, and requires a huge amount of planning. Would you trust someone else to distribute it fairly? I would not, especially what i see of the governments. The amount of bureaucracy required for this also digs into the produce(Profits) to, so tends to be less efficient.
For example, a farmer produce 10 units of work, the state decides he is to get 10 units of work back. The state collects his units of work(which it's self uses 2 units), then distributes units of work back to him(which uses 2). So he ends with the same amount, but 4 units of work wasted. Our current state still distributes our units of work through tax, but not on such a big scale.
People often moan about welfare, which is distribution of units of work. The majority tend to moan immigrants abusing the system, or people scourging of it. I often dislike these people because they tend to take the stuff they read the sun paper or the daily mail as the truth when it's not. My arguments against welfare are purely based on efficiency, if you are taxed £500, then get £200 back of child credits it would be much more efficient just to tax £300 in the first place. You don't waste the administration costs of doing this, and the person has the same net result.
What's the incentive to work very hard, if the stuff you produce just gets redistributed? Less entrepreneurial work, because of this.
If you think the government is making a mess of things now, in a mixed private ownership and public ownership(Mixed capitalist economy). How would you feel, if they owned everything I.e Publicly owned.
Yes, in capitalist society there are people that abuse the system. However in a people run country, people would still abuse the system, but in a different way. Ruthless people, still rise to the top some how. Those ruthless people would just be saying, I would have work here, or redistribute my wealth like this, or i'm not allowed to own that company i started. There are annoying buggers in every society, and it's hard to stop that. But at least in a free market, I'm actually allowed to fight for my wealth rather having to distribute according to some guy who thinks he knows best or might be corrupt. It still sucks however.
I dislike governance, I dislike ruthless people rising to the top, I hate how some companies(Government in socialist case) abuse there employees, or their customers. This is actually why i have come to like capitalism. I can run my own company, screw the boss, employees can just leave their job rather than having to work for one company(government) and customers can change companies rather than just go to the state for everything.
I hate big government, and it's one area where I'm right wing. It's a bit margaret thatcher.