It is a commonplace assertion that the last hundred years have witnessed state intervention, especially in affairs involving economic activity, on a scale greater than at any other period in history. In chapter 1 we noted some examples of this phenomenon and discussed some of its basic aspects. But if we now pursue the matter, and ask exactly what is meant by the term ‘state intervention’, we find that this expansion of intervention has not come about in a straightforward fashion but has occurred through complex changes in the structure of society and the economy, and in the very nature and role of the state itself. As we shall see presently, the notion of ‘the state’ is itself surrounded by problems of definition, and by controversy both as to the precise nature of the modern state and as to what the most appropriate role for the state should be in advanced capitalist society. Of course, state intervention is by no means confined to the economic sphere: the state has taken on a more active role with respect to many other areas of social life, such as public administration and the growth of what is usually termed the ‘welfare state’. We shall discuss these developments presently, but for the moment we examine some of the main issues concerning state regulation of economic activity – a sphere of social life which is central to the existence of any social group.