> But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane.

You're conflating issues here. Something (or someone) that's not adding any value to an economy has no place (and no reason to participate) in it.

That being said, letting people starve is obviously inhumane. However, the answer to this isn't opening up bullshit positions in the economy, by introducing artificial inefficiencies, in order to accomodate those otherwise "useless" people. Regulations (ideally) are there to keep the markets efficient (in the long term) by maintaining "fairness". Not to ensure that individual humans don't starve.

Keeping people, that are unable to support themselves, alive and well is a welfare issue, and is not otherwise adressed by markets (directly).