I understand your negative to anything sounding as socialism, coming from the perfect example of a country that tried to implement it but utterly failed. However, many countries have different levels of state participation in the economy — and for many, it has worked great.
Even countries as mine, not faring by far as well as North European ones, have gained a lot from the socialist traits in our politico-economical history. I won't detail into the importance of the land communalization in Mexico between the late 1920s and 1990s, but it drastically helped level out wealth distribution. During the same period, the State owned all strategic industries (petroleum, electricity, water distribution, etc.) and, while Mexico faced and faces huge problems (corruption being among the most endemic), it was during that period that we had our most stable economy in history — Stable because for 40 years there was no big crisis (as we now face every 5-10 years), and growing at stable rates around 7% each year.
Finally, on the point of state employed people, specially public universities (as it directly implies me and the plan of life I have): This is –again– different in each place. In Mexico, the only entities I'd really call "universities" are the public ones. My university alone is responsible for over 50% of scientific research in the country, and #2 (Instituto Politécnico Nacional) is also public. Yes, we do have lots of private universities, but they are more what I'd call schools — they focus on capacitation, not in knowledge generation.
And yes, as an academic, quoting you, I don't actually produce any of the wealth that allowed the real taxes to be paid in the first place. However, we produce the knowledge that is needed for the country to function, to advance and to form an industry that actually produces that wealth.