Last night, I started watching a Let's Play of Bioshock. For those who don't know much about the game, I think I can say this much without spoiling the plot: The game takes place in an underwater city that was intended to be some sort of Objectivist paradise.
There, scientists weren't 'burdened' by ethics and developed some DNA modifying chemicals to give people superpowers like telekinesis or the ability to shoot bolts of electricity from their hands. Unfortunately, the scientists responsible apparently bought into 'greed is good, altruism is evil' rhetoric, and didn't bother with extensive safety tests. As a result, the city is now crawling with insane people swinging around monkey wrenches and climbing the walls with hooks and mad Science!-enhanced agility.
The city's leader response to the growing insanity? "Yes, people have died, yes, people have gone insane, but we can't abandon our ideals when they're being tested. The market is patient, and we must be patient, too."
This reminds me of all too many quacks I've heard from: "If it was dangerous/useless, people wouldn't buy it!" One of the biggest problems the caveat emptor philosophy has is the need for everyone to be an expert in whatever field is relevant to their purchase. The problem isn't quite so bad with simple purchases, but when it comes to our health, we shouldn't all have to be doctors to evaluate the safety and efficacy of a product. Contrary to what quacks will tell you, you are not born with innate expertise in your own body. The human body is a complex and intricate thing that was pretty much built to last a few decades. It's because people sought a deeper understanding than superficial pain/pleasure responses that we've been able to take 70+ years for granted.
Many people also tend to be poor at risk assessment. Someone who goes on a beach vacation might be more worried about getting attacked by sharks than about the much higher risk of getting into a car accident on the way. Anti-vaxxers, for example, are more afraid of the infinitesimal risk of exposure to trace amounts of everyday chemicals in the vaccines than the much higher risk of death by the diseases they prevent.
My conclusion: This sort of extreme capitalism, like Communism, could only work if the world was already perfect, full of well-educated, rational people. We need regulatory bodies made of experts to keep our food and medicine safe and effective.