How can the purpose of capitalism be these two things at once?

[martino]

The great thing about capitalism, free enterprise, and the right to own property is that you get out of it exactly what you put in.

In a communist or socialist society, the government divvies out to each equally, no matter what effort is put in (in theory anyway), so that the more productive members of the society are carrying the less, and the quality of everyone's life tends to suffer.

Where in capitalism, the more effort you are willing to put into something, the greater reward you will reap. People take pride in what belongs to them, be it their property or their labors. If all property belongs to the state, and all labor is performed on behalf of the state with the same compensation going to all regardless of effort, where is any incentive to excel??