During the last century there have been many fundamental changes throughout the global economy. This essay will argue that government intervention is necessary. Governments have adjusted and implemented new programs to accommodate changes in the cycles in boom and bust. Markets and command structure cannot function individually. There have been many failures.
A Major example is the great depression in late 1929. The Roosevelt administration implemented many social benefit programs to assist Americans in getting through the depression called the New Deal. But the major fix of the depression was the start of WW2 when the economy was mostly centralized around production of war mechanisms. The first lesson is that government expenditure cutbacks are the worst policy for correcting a balance of payments problem. The second lesson is that the devaluation of an overvalued currency does provide a major boost to the devaluing country, while doing neither good nor harm to the international economy. But those are just some failures of government intervention. There was more success then failures.
Another example would be Reaganomics. Supply-siders insist that government intervention should be kept to a minimum. They emphasize the production side of the market. During a recession government should stimulate the goods sector of the economy by reducing corporate and personal taxes. Ronald Reagan himself did succeed in lowering inflation and unemployment. Many people claim that it was a failure because Reagan left the American people with the highest debt in the country's history, and his policies created an explosive social situation by dramatically increasing the gap between rich and the poor. People also say that deregulated markets cause "Boom and Bust" Cycles and that Reagan policies have led to the decline of the middle class.
A neo-conservative approach to government targets the need to control deficits and debt, and embraces principles of the market economy before all others.