“Direct Democracy” would solve all the mentioned issues.
Why do you think that system is not “allowed” worldwide? (see Switzerland) 🤔
Instead the “indirect democracy” is preferred, where people handover whole power to so called “representatives” invariably present on all sides: left, centre and right. That power is knowingly given to them for few years, with no easy way to reclaim it if things go bad.
In a “Direct Democracy” the State has exactly the amount of power people decide should have at ANY given time. NOTHING can be done without people’s consent ‼️
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What you describe are Worker Cooperatives and democratic socialism.