This was the basic idea behind Communist political systems as the "vanguard of the proletariat" or 'Communist Party' was supposed to represent the most able and dedicated members of the people, who could decide what values the rest of society should hold in the name of moral progress. The Party was considered a progressive and educational influence on society. I'm not inherently opposed to this if it 'worked' so the comparison isn't meant as a criticism of you're intentions, but the results speak of the dangers of this approach of the state taking on the role of 'teacher' to discipline society. We are now perversely in a situation where corporations are able to mold public opinion in a quasi-totalitarian way.
Democracy protects not only freedom of thought, but people's freedom to be ignorant. Economic development which requires education and political rights which are more fixed. this produces a conflict in that the more power we have collectively as citizens the greater our responsibilities and is dissonant with the concept of individual rights and liberalism. i.e. Citizenship does not automatically entail a responsibility to be well-informed. It could be argued the opportunities are very limited outside of the upper and middle classes in terms of levels of education and the time to participate in political affairs, though this is an economic problem which could be overcome in time (probably a considerable period).
Sunstone is right that democracy is undermined by the role of elites and the influence they have over public opinion, particularly through mass media. A particular issue is how mass media promotes anti-intellectual and anti-political attitudes which have the effect that people can be easily manipulated and are too apathetic to become involved. It is possible to change the culture, but you will be very quickly entering territory of social engineering and you can throw traditional concepts of "free thought" out the window. There is already a huge amount of propaganda in circulation that we accept implicitly (such as advertising) and the problem is whether you try to reverse this trend to something that fights with individual rights or go for a more conscious attempt to control the way people think by corporation or the government.
The dangers should be self-evident, but "democracy" is a becoming admirable attempt to conceal the true extent of unequal economic and political power. The problem is how far social engineering necessarily perpetuates new inequalities between the "teacher" state and wider society by denying the freedom of the latter.
