Ideally, the "requirements" (laws) that the state creates are kept reasonable by the "producers" (population) through democratic mechanisms. Or, put it more sim

Ideally, the "requirements" (laws) that the state creates are kept reasonable by the "producers" (population) through democratic mechanisms. Or, put it more simply, if the government passes stupid laws, the elected officials can be voted out and replaced. This is a check that only exists in a democratic system - in the case of Soviet economic planning, there existed no democratic mechanism to change the system. I was amazed by the concept of free markets when first learning about it, and it seemed like letting market forces play out should result in an optimal situation for consumers, though now I am more cynical and mostly expect bad consequences like monopolists putting effort into not allowing competition. So due to the different nature of efficiencies and inefficencies of state and private actors, I currently prefer a system where the government is very involved in key areas of human rights, social welfare and basic needs (so education, healthcare, welfare payments, management of physical/mental disabilities, the justice system), and the private sector is mostly handling technical innovation, consumer goods, manufacturing, most services, etc. Hopefully we've not yet reached the global optimum of these systems and can see both government and markets evolve positively.