Can you point me to a time when capitalism did happen? Where governments and outside forces weren't picking winners and losers in the market? In such a time what was the plight of the common worker? Did we see overwork, workplace safety, and child labor issues?

Third wave communism doesn't seek to abandon the "free market" (which is free within bounds), it instead favors democracy in the workplace. Where all members of the organization are employee-owners including ceos and middle management and the "Board" is dissolved into either a representative or direct democracy made up of employee-owners. In this way one increases the incentives for each individual to perform and see the company perform well. This also mitigates much income inequality by allowing the workers a say in the compensation of middle and upper management.