In theory, government is the people. In practical theory, government is made up of representatives of the people. Except the powerful who dominate our supposed representatives do anything and everything to keep their power. Such is human nature. It is a failing of capitalism and communism alike.
Economic efficiency can mean high unemployment or diminished services.
Of course not. I must disagree. No it doesn't. The cost of that kind of efficiency is far too high to justify the benefit - what the free market does is simply to allow the values involved to balance. A free market will aim for equilibrium between supply and demand, as well as between efficiency and inefficiency.