The liberal conception of the state
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The liberal conception of the state is of a limited organization that represents popular will. The state plays a minimal role in the directing of society and economic affairs, but can play a significant supporting role in modern liberal (social liberal) theories. Classical Liberals favor a minimal state that only provides for basic services such as defense, enforcing contracts and protecting property rights. Social liberals accept more roles for the state, primarily in the economic sphere, such as regulation of capitalism in order to protect consumers and workers, welfare programs to help the poor and disadvantaged in society and public services that benefit everyone. To liberals, the state plays a supporting role in society, and is usually left to operate in the political and social spheres.
Marxists conceive of the state as an institution of capitalism that can be transformed to benefit the working class, as the state is the only institution that is capable of organizing and managing the economy on a large scale. The state would be radicalized in that the workers and people would control it through direct democracy or council democracy. The state becomes an integral part of the economy in that it owns the means of production in the phase of socialism. Marxists see the state as becoming unnecessary when the productive forces develop and authority on the state level is no longer required, leading to the disappearance of the state and social class. This society is called communism, where the means of production is owned communally but operated and managed by cooperatives.
Socialism is an economic system whereby either the state or worker cooperatives own and control the means of production, strategic resources and major industry. The principle of socialism is to organize the economy in a rational manner that avoids the pitfalls of capitalism and the free market through planned or state directed economic systems. Socialism can also utilize the market mechanism to distribute goods and services in the form of market socialism, while the state or public retains ownership of major economic institutions. The revenue generated by the state economy would be used to finance government programs, potentially eliminating the need for taxation.