The government literally controls the creation of money. By ingreasing taxes it can make the private sector less competitive and redirect virtually all resourc

The government literally controls the creation of money. By ingreasing taxes it can make the private sector less competitive and redirect virtually all resources on public projects. In capitalists states you could even argue that this is the only role of the state. Detecting failures in the market, first trying to fix them by light interventions, like law changes or incentives and if still not successful fixing them directly.