>Why not just create the benefit directly instead of going the roundabout way of having people act in their own self-interest, fostering mean-spirited relationships between people, competition instead of cooperation and general wastage of resources?

Because people always act within their own self interest for the most part. One may take more than their fair share of the benefits of society while others will attempt to get out of paying theirs. Don't forget the officials whom will attempt to push those monies one direction or another in order to enrich themselves.

Capitalism is the only system that takes this into account as far as I can tell, everything else is either predicated on people willingly giving to help society on the large scale (counter to human nature) or forcing others to do so at the end of a gun (that tends to lead to dictatorships and suppression of freedom as it requires near total government)