1.You have a poor understanding of what capitalism actually is and what it entails. Wage slavery, which you are basically describing without outright mentioning is nonsense. Benefits are not a natural right and are not compensation for anything.
2. Really? The so called "poor laws" which I think you are referring to are not like what I am suggesting at all.
3. No, I think life would improve actually. Look at what countries are most economically free and their HDI rating. I think you'll notice a correlation.
http://v.i4031.net/StatistFallacies/Somalia
Somalia improved in anarchy, funny that.