I do wonder if the conflicts are truly fundamental, or whether they could largely be engineered around at a practical level (without abolishing any existing states).
Put another way, is it a philosophical or a practical problem?
Seems a lot of the problems can be reduced in severity if citizenship (your primary link to national sovereignty and its corresponding benefits and obligations) and country of residence are separable concepts.
It seems like the Schengen Agreement is a (limited) example of a system that allows freedom of movement while retaining national sovereignty.
It's not the whole world though, and I don't really know how the issues you raised are being addressed. After a brief bit of research (I am NOT an expert) it looks like:
> It's impossible to run any kind of social safety net
Welfare remains complicated (as it always seems to be everywhere at all times...); by default you'd be covered by your home country which will probably not pay you unemployment if you move overseas. However, there might be bi-lateral agreements in place between countries to "cover" each other's citizens. Seems fair.
> Democracy becomes impossible ...
You vote in your home country, unless you go through the citizenship process of your host country.
> Finally uncontrolled immigration economically crushes the native population by suppressing wages
Probably, yeah. Very long term, hopefully we'd see more similar development levels world-wide and this could become less of a problem.
You could also phase it in over a few decades, and/or have a growing "free movement" zones between areas.
> There's also the cultural and racial dilution thing
Yeah not sure about that one.
> EDIT: I can't respond to you because my posts are throttled, but how does this work with your children?
Well, first of all the can is kicked down the road by 20 years, which is beyond most politician's threshold of patience and avoids the worst immediate abuses ;)
But I can speak to this directly because this is actually my situation! My family is resident in Australia. But I am a New Zealander, I can live and work here but I can't vote or claim welfare and am not a citizen. My kids (who were born here) are actually New Zealanders until age 10 at which point they can apply to become Australian citizens.
From my perspective, my kids are Australians! They're not any different than anyone else born here, they grew up in the culture, reflect local values, and are the product of a similar level of educational investment as other Australians.
I admit that I'm biased, but I don't see that it causes a lot of problems.
In general it seems possible to retain the concept that countries decide who gets to be a citizen - it might not be automatic by birth, and parents would need to weigh up the rules when choosing a host country.