Government regulation is the route to go for the edge cases where capitalism incentivizes dark patterns. For cases where an endeavor is unprofitable, government investment is typically the way to go, and seems to work rather well (eg NASA and the many inventions that came out of it, that arguably form the basis of our modern life.)
I am not calling for unfettered capitalism, but I do think we have struck a somewhat happy medium today compared to almost any other point in human history. I think it can be improved further, but I see no evidence, historical or otherwise, that communism could fare better.
There is still a power incentive. In the proposed system we would likely factions rapidly forming to gather the most power and resources as quickly as possible. It would probably be quite bloody. (What you are describing is effectively the tribe system, which rarely ended well for most tribes.)
As long as resource scarcity exists I just don’t see this working out, unfortunately.