Social democracy is a political, social and economic philosophy that supports economic and social interventions to promote social justice within the framework of a liberal democratic polity and a capitalist mixed economy.
Yes. In the form of social democracies.
A high level of social welfare is ensured by the state, people pay high taxes and they also get a lot for their money. And part of what the state does is to ensure that it is good places to do business, there is very low corruption, a well educated work force, a well functioning labor market and so on.
democratic capitalist countries with strong welfare policies