Yes, those are some of the issues with 'Laissez Faire'. There are always winners and losers in any system and I feel that some redistribution to "take the edge of" is a good thing. (But perhaps not your specific policy suggestions).

Democracy isn't central planning. It has a similar basis to capitalism actually.

If you believe that morals are subjective then it makes sense to give everyone a say in what morals are codified as law. If on the other hand you believe in a single objective moral code, a dictator's for example' then you don't need to make any decisions.

Capitalism is the same but with morals switched with values/desires. It may not be the best "type 2" system, but in a subjective values universe any system that replaces it would need to be "type 2" as well.