Across the globe, pressing social and environmental challenges are debated in terms of freedom and wellbeing. At the heart of the matter is often a tension assumed to exist between these values. Yet, as the capability approach and libertarian paternalism argue, this need not be the case. These prominent contemporary frameworks, influential in academia and practice, propose that liberty and welfare can be promoted at the same time. While they offer distinct perspectives on these values, their conceptual foundations open the door to mutual enrichment. Liberal Welfarism, as an approach to governance, explores this possibility and goes beyond it, proposing a framework that overcomes their individual and joint limitations. Doing so requires critical examination of crucial aspects, most significantly those related to rationality and motivations. Elucidating these themes provides a more robust conceptual model of human agency as well as a more nuanced and encompassing way to understand and promote freedom and wellbeing, with implications for politics and policy.