FDR = TVA = Make a stone pile on one side of the map, then make a stone pile on the other side of the map and have them hall back and forth. Everybody must gets paid.
Well, that roughly matches the dwarven economy for now. But it's only marginally different from the commie mode that you start with, which makes me wonder what the point is. You can already assign better rooms to your valuable dwarves, and ideally you could assign items to dwarves too (it would make outfitting your soldiers much easier, at the very least -- not really a case where hands-off makes sense).
If the point is to test market behavior, then dwarves themselves have to have, or pretend to have, some initiative in creating tasks for other dwarves. You would still have to hire public workers (refuse haulers, guards, administrators), which would mean finding a way to tax a barter economy. Difficult enough when dwarf-bucks are just fixed properties of an item, but a true economic simulation would suggest that the value of an item at any given time, for a given dwarf, is related to a dwarf's situation and personality. In fact, an economic simulation that doesn't assume personally variant value is pointless, because every distribution of property is identically good from a utilitarian perspective. Only labor distribution can produce different results, thus the current system of communal property and labor management.
Generally, if dwarves had a concept of informal credit (internally tracked IOUs as part of their "relationships") supplemented with barter, that would work well enough for a 7-dwarf economy. As things got more complicated, you could have a "trader" admin job whose sole role is to assemble a behind-the-scenes list of supply and demand, and facilitate mutually beneficial exchanges between dwarves (and take a chunk of the leftover utility). But the mechanics would require a lot more complexity; I'm not sure it's worth it at the moment, or ever. Of course, I can't imagine a better game than DF for modeling an economy (MMOs are usually less realistic), so maybe one day it will happen.
Wow, I need to cut down on response length.
Oh, but sort-of back on topic -- if poverty creates crime, and personality dictates how likely dwarves are to commit certain crimes, then perhaps an option for more law-abiding dwarves who can't find work is emigration?