It's more a human nature problem. A perfectly free market is the jungle, and the most brutal jaguar is king there.

Which is exactly why you need to add feedback loops to the system (minimum wage, progressive taxation, etc), to prevent it from devolving into Bioshock.

Yes. When the government is too weak, or is government in name only, or is infected with "free market" true believers, it becomes the plaything of the great moneybags. Policy shifts towards "freedom" - i.e. the freedom to use the brute force of capital for personal benefit, disregarding the larger and the longer term outcomes and the greater good.