Human welfare is the domain of politics, not the economic system. The forces that are supposed to inject human welfare into economic decisions are the state through regulation, employees through negotiation and unions and civil society through the press.
What you describe is indeed the liberal (as in liberalism) ideal of how societies should be structured. But what is supposed to happen is necessarily not what actually happens.
The state should be controlled by the population through democracy, but few would claim with a straight face that the economic power doesn't influence the state.