As for #2, the thing with social policies that they have long-term effects on a much larger scale. For example, one could plausibly argue that a robust "safety net" encourages people to take adventures, making it easier for kids from poor families to innovate even if they know that 90% of startups fail. This allows the society as a whole to benefit from the small number of startups that actually do succeed. Handouts, in that case, would be a sort of investment.

Also, this thread is about a hypothetical future society where there is a surplus of human labor due to automation. If you're going to pay people to carry out meaningless tasks that are not necessary in the first place, what's the difference between that and just giving them a handout?

Or so goes the argument. It's harder to prove that in reality. Also, if you care deeply about fairness between individuals, as in your other comment, I can understand why you might object to certain types of handouts.

Also I would have to say that number 2 bakes in a position which imposes a morality and value system onto others, and singularly undervalues the complexity and edge cases(sets/groups/communities) present in the human condition.

Also its worth keeping in mind that social safety nets (i assume thats what you are referring to) may keep some people who don't pull their weight, but also keep alive people who would never had a chance to do so.

How can you have a capitalist economy without consumers to signal prices? I think I just don't understand your point here. Consumers obviously create value to my mind, because the knowledge of what they're willing to consume is itself valuable. How do you understand differently?