The successive crises the world faces—environmental, political, health, security, and geopolitical—impose significant economic challenges on states. As crises intensify, the private sector recedes, and the need for the state emerges not only to meet rising social demands but primarily to bear political responsibility and accountability. The private sector usually appears only in times of prosperity to distribute gains. So, can the state always succeed amid the dual attitudes toward its economic intervention?

This question takes us back to the experience of capitalist states and the crises their system has faced since the Great Depression (1870-1896), through the 1929 crisis, the Asian Tigers crisis in the late 1990s, Argentina’s crisis at the start of the new millennium, and the 2008 financial crisis. These crises convinced researchers that capitalism’s crises go beyond the cyclical nature conservatives often justify, revealing structural flaws in market economies. This has gradually brought the state back to the forefront of the economy, not only as an arbitrator and regulator but as a bolder and more proactive actor, especially in developing countries.

The financial and economic crisis clearly experienced worldwide since 2008, whose effects continue today, reaffirmed the state’s pivotal role in the macroeconomy. The United States serves as the most prominent example of market failure to self-balance, as it was forced—being the center of the “ideal” market economy—to adopt nationalization and protectionist policies (Trump tariffs) to save financial institutions and factories from imminent bankruptcy. Preserving jobs and creating new ones became key slogans behind these new economic practices. Following the U.S. example, many countries hastened to strengthen state intervention in the economy to mitigate the crisis’s repercussions and seek the best ways to revive the economy.

The public sector’s contribution to GDP in industrial countries has notably evolved, rising from 12% in 1913 to 45% in 1995, years before the global financial crisis. Nevertheless, state intervention in the economy was not widely accepted by many economists, especially the recommendations from international financial institutions to third-world countries. The market-state dichotomy sparked debates reflecting ideological, political, and academic confrontations. The rising bourgeoisie at the end of the 18th century with the Industrial Revolution, represented by classical and neoclassical economists, were among the strongest proponents of the market’s role and its ability to independently address its flaws, as seen in the writings of Adam Smith.

This stance did not last long, especially after economic transformations, with state intervention supporters arguing that externalities limit the market’s ability to provide appropriate price signals. This results in a weakened capacity to estimate production costs and resource use, making prices unable to reflect true costs, negatively impacting consumption and, consequently, employment. State intervention addresses market information gaps, ensures the economy’s social and human dimensions, and limits profit as the sole investment driver, especially with the rise of financial capitalism and speculation-based economies detached from the real economy.

Despite these interventions, the state has not achieved full employment. Unemployment, as a natural outcome of failed economic policies and production mechanism shifts with the advent of robotics and artificial intelligence, remains a major state concern for social, security, and economic reasons. The international community has initiated mechanisms and institutions to activate the labor market through International Labour Organization agreements to address labor market failures, but most are now outdated and do not answer the rapidly evolving structural changes in the labor market. This reinforces the state’s responsibility and the continuity of this responsibility amid growing social demand for employment. The question remains: how can this complex reality be confronted amid the continuous decline of the state’s economic role, with its risks to stability?