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Nem said:

That is the classic system of Socialism, but it is old and outdated. 

Can you expand on this? In which way is this "classic system of Socialism" outdated? Sure it's old, but so are many other political theories. Liberalism is older than socialism, yet still kicking. 

I am open to the idea of socialism adapting to new social conditions, for example we live today in a world of mostly financial capitalism whereas in the 19th and 20th centuries, industrial capitalism was predominant, but the fundamental theories of exploitation and property certainty aren't outdated, and social democracy doesn't resolve these fundamental problems -- it merely makes them somewhat more comfortable. 

The concept of "contributing to the state and the state giving back" seems quite conservative to me, even more conservative than pro-capitalist liberalism. It almost sounds like the absolutist contract which predated the enlightenment: except "sovereign" is replaced with "state." But of course, much of the fundamental actors in social democracy were absolutists acting in reaction to bourgeois power by co-opting/"allying with" worker's movements*, so that makes sense.  

*Bismarck comes to mind.