How do you solve a problem like economics?

I am a strong, even radical social progressive and civil libertarian. Individual freedom is most important to me, but when it comes to the other big division between the Left and the Right, I'm a bit less sure what "the way it should be" is. I've yet to see the subject summed-up as simply and brilliantly as Oliver Wendell Holmes summarized the issue of individual freedom with his quote, "The right to swing my fist ends where the other man's nose begins." Previously, I have not been particularly interested in the subject, but in reading political blogs and discussion, I've begun to become more interested in these issues simply because they present more information that is new to me, and provide a logical question that I have yet to solve.

The first problem that I see is that we know historically, that communism -- at least in the Leninist form demonstrated by the Soviet Union -- does not work because it fails to encourage hard work and innovation, but inheritance and nepotism prevent the laissez faire ideal that those who work hard and innovate will be the ones with access to capital from working. An interesting but entirely impractical solution to this that came to me is to eliminate parenthood as in Huxley's Brave New World. This would prevent people from becoming wealthy by inheritance and would allow the for all people to enter the workforce with level footing, as assumed by the capitalist ideal. Because it would mean that wealth can't be bequeathed to ones descendants, and of course, you can't take it with you when you die, this would remove much of the motivation to accumulate vast amounts of wealth beyond what one can use, and the excess wealth would either be donated to charitable organizations or used to purchase goods and services for ones own enjoyment (stimulating the economy in the process) rather than being hoarded indefinitely, and any remaining funds would presumably go to the government (reducing or eliminating the need for taxes) and/or to charitable organizations upon the individual's death.

A more practical idea that I came up with to offset the barriers to accessing capital and encourage competition would be for the government to provide special loans to new/struggling businesses to replace the need for venture capital. There would obviously need to be safeguards to ensure that this money is not pocketed by business owners, and the the assets bought with the money would become property of the government (most likely to be auctioned-off) if a business fails. This would not only decrease the barriers to entry, but by making these loans indefinite and only requiring them to be paid back with interest in the case of a merger or buyout by a company that has already received such funds (or absorbed a company that has), it would discourage the formation of monopolies. Of course, more loosely-linked trusts would still be an issue, but by providing these funds, the government would in a sense become an investor, giving it a right to monitor the actions of the business to avoid such abuses.