> Not a true Scotsman, eh?
No, accuracy. If there's a raft with "YACHT" scribbled on it in permanent marker, and you call it a yacht, and I correct you that it is, in fact, a raft, then my correction is not an example of the No True Scotsman fallacy. To date, there haven't been any 'true' communist states. For that to be so, the workers would have had to hold the power. It is trivial to prove that in most self-professed communist countries, the workers have not held the reigns of power.
For example, in Mao's China only 11% of the communist party consisted of working class people. In Cuba, the working class never held power -- it was a revolution solely of the upper echelons (Actually, the way the revolution was performed was quite clever, I'd advise you to read about it, it's quite a marvel of strategy :)). In the USSR, for a short time, the workers held the reigns, however this was quickly made not the case. And -- to paraphrase Cliff -- if the state truly consisted of and gave power to the workers, the workers would have fought against the destruction of it.
> It's called social democracy or social market economy. It's still largely a free market capitalist system because the means of production for the most part are privately owned.
Yes. It took some of the materials from communism and bolted it on to capitalism so that the roof doesn't fall down every 20 years.
> Like many people being lifted out of poverty in the last decades? Like the average person having a much easier life than the average person just a hundred years ago?
Really? From the UK all I can see is the literacy rates getting worse and worse in either country, people being driven into unspeakable amounts of debt by private universities and bank bailouts, and Americans dying of silly things like Type 1 Diabetes just because they couldn't afford enough medicine.
Just because things are "getting better", doesn't mean that things aren't bad -- in fact, it's an open admission to that fact. Nor does it mean that under an alternate system things would be worse.
> Quite to the contrary, free markets overall have been tremendously beneficial to the development of mankind.
On the contrary, "free markets" of the current ideation have only existed for about a hundred years or so. Just because something is a market doesn't mean that you can jam it into the capitalist Free Market slot. I'd advise you to read Ellen Meiksins Wood "The Origins of Capitalism" for an academically correct view on this.