It's pretty to think so. But the experience of two world wars may have led him to believe quite firmly that all such systems, however well-intentioned, break down and tend to evil (or are easily manipulated by men of evil intent).

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“There, peeping among the cloud-wrack above a dark tor high up in the mountains, Sam saw a white star twinkle for a while. The beauty of it smote his heart, as he looked up out of the forsaken land, and hope returned to him. For like a shaft, clear and cold, the thought pierced him that in the end the Shadow was only a small and passing thing: there was light and high beauty for ever beyond its reach.”
― J.R.R. Tolkien, The Return of the King

Oh, I fully understand why he felt the way he did. But ultimately, I believe Tolkien was rather naive when it comes to "governance." Much like Thomas Jefferson, he preferred a system of government that can only really work in rural, pre-industrial, low population-density societies. An idyllic, rural yeomanry. I desire that as well, but the world is huge, complex, densely-populated in many areas, and full of incredibly dangerous substances, tools and weapons, and such loose governance structures simply cannot hold. IMO, a sort of libertarian anarchy of the type he preferred would, in today's world, spell almost certain disaster for the globe.