Where do you get the funny notion that people will minimize their work for any given dollar. Many people voluntarily work their asses of for no money at all.
Wouldn't you at least consider the possibility that people will only tend to do a lousy job mainly when when they are forced to do what is for them a lousy job?
The free market system not only assumes that agents on a free market will maximize the return of their effort but also that it will maximize that these agents actually produce things that are of added value to them.
In labour market terminology, people in a free market will have the best possibility of actually doing what for them, individually, is a fine job.
Capitalism, as many argue, is of potential threat to free markets insofar as it tends to create dominance based on centralization of capital & such a dominance tends to create a distortion of a free market.
As a fairly recent economic system, the jury is still very much out on a global capitalistic system.
The choices are rarely neatly divided in two opposites.