ABSTRACT
This chapter proposes that it is increasingly insufficient to explain the role state interventionism plays in urban and regional development in terms of the 'relative autonomy of the State'. Under the conditions of the present stag-flationary crisis, it is becoming more and more obvious that the State is not merely an instrument of capital or the dominant class and that structural conflict emerge between the State and capital. The chapter suggests that such a structural conflict between the State and capital does emerge. In fact this conflict is one of the most important features of the present stag-flationary crisis and it is quite possible that at least in certain countries its 'solution' will be provided by a further increase of state interventionism. An economic system would be beyond the Welfare State of state monopoly capitalism and probably could be described as the coexistence of a capitalist and a state mode of production.
