I think the former has to go, but I think the latter is a pretty decent system. But I suppose we can get lost arguing about the definitions of such nebulous terms. I think the current system, with a more progressive tax policy, universal healthcare, free state-run higher education, strong regulation of the financial sector, investment in infrastructure, etc. (insert leftist laundry list) would be good.
As to your question, I think if even 1% of the American population that's on the left was at least moderately involved in politics, we would have massive changes in this country. But look at, say, what they call the netroots. How many of those commentators do you think is active politically? In fact, I've _never_ seen a mainstream liberal blog say, "let's try to find a way to solve these problems, let's organize, let's get together and get active." It's just potshot at Santorum #75, Romney said something stupid #106. I know the extremists in this country are problematic. All of their readers know. When do we actually start to do things - or at least start to talk about things that will make a difference?
I know a lot of people on this site are pretty active, but I just want to point out that we're dealing with a handicap of no leadership on the left, and very few active people.
As for advice for people who are active?
1. Try not to be insular (I've seen a lot of groups turn inward and cut themselves off from the outside world).
2. Try to focus on small, achievable goals - a boycott of Wells Fargo won't do much good if your group is only 15 people. But delivering food to people or helping them with foreclosures can do a lot of good, and show people that you're serious.
3. Don't break the law. With all the unused tools at our disposal, I can't think of any reason why it would be justified.
4. Try to connect with other activist groups. Not everyone will want to be part of your group - most won't. But the way to get things done is through coalition building.
Well, those would be my suggestions based on my experience. I'd be happy to hear yours.