Part I. Changes in the Economic Role of the State in the Twentieth Century: 1. The age of laissez faire; 2. The role of the state between the world wars; 3. The coming of the welfare state; 4. When economists thought they had found Nirvana: welfare policies; 5. When economists thought they had found Nirvana: stabilization policies; 6. Barbarians at the gates: challenges to Nirvana; 7. General rules to guide governments; 8. Giving more freedom to markets; 9. A minimum economic role of the state?; 10. Implications of excessive government withdrawal; Part II. Complexity and the Rise of Termites: 11. The growth of termites; 12. Termites in regulations; 13. An inventory of policy tools; 14. A closer look at regulations; 15. Modernity and growing market termites; 16. The allocation role in modern economies; 17. Public goods and intellectual property; 18. The state and its economic objectives and institutions; 19. The state and the distribution of income; 20. Market operations and income distribution; 21. Poverty, inequality and government policy; 22. Market manipulations and economic outcomes; 23. Termites in the stabilization role; 24. Modern government role and constitutional guidelines; 25. The quality of the public sector and the legal framework; 26. The quality of public institutions; Part III. Equity and Inequality: 27. Wealth creation and government role; 28. Recent concerns about inequality; 29. How should governments intervene?; 30. Intellectual property and income distribution; 31. Historical background on intellectual property; 32. Tax rates, tax structures and tax avoidance; 33. Summing up of past developments; 34. Why worry about income distribution?; References; Index.