Capitalism may hold us back in some regards but really helps in others.
The majority of people would likely be feudal peasants, working under a warmonger family that owns the sustaining land by force. No upward mobility except through bloodshed.
Commerce is just the exchange of goods and services. If we all stop exchanging goods, in what sense would we have a civilization? What would you or anyone accomplish if you had to grow your own food, make your own clothes, build your own house...?
Significantly less, since commerce and the ability to trade things for a different value forms the basis for civilization. It's easy to grow and hunt your own food, because that's immediate and concrete. The farther away you get from that, the more abstract that thing becomes. It's going to be harder for people to feel any sense of connection and purpose with making the rubber that goes into a seal on the International Space Station when they don't see any direct benefit from the research done there, and they likely can't even see the indirect benefit of that fundamental research.
For good or ill, commerce is how civilizations universally work, and you'd have to imagine a completely different species that evolved under vastly different circumstances to have anything else.
I kinda feel like we would have done way, way worse without commerce. We're social beings. We do better when cooperating than trying to go at it alone. Commerce is merely one of the many glues that keep us cooperating on some level. Yes, it also leads to competition; but less so than it would without it. Why kill you and take what you have that I want when I can just give you something I have that you want for it?
Capitalism, and making commerce the end all be all of civilization is what we could do without. It's a means to an end, not the goal.
I'm currently reading The Day The World Stops Shopping by JB Mackinnon, which argues the same point you're asking about, I think you'd find it interesting.
What about a meritocracy based system where any type of contribution is rewarded, whether it be research, garbage cleanup, etc.? (I’m sure there’s holes to poke in it, just thinking outside of the box.)
Wow. Good luck building your stick cabin in the woods all by yourself and growing and foraging all your food because you refuse to trade your labor for produce from a farmer because that would be evil commerce.