During the 1940s and 1950s , the debate over the government 's role in economic management centred on the issue of whether or not mixed economy and a welfare state are desirable. The experience of Great Depression during the 1930s began to cast doubt on the automatic coordination function , and especially the macroeconomic coordination function of the capitalistic free market economy. As a result , the Keynesian counter-cyclical macroeconomic policy function of the government became new sub-topic within the debate , overriding the mostly microeconomic issue of resource allocation in the socialist economic calculation debate . The Keynesian economists advocated intervention to remedy the market failures in the macroeconomic level , particularly the unemployment phenomenon . This increased the popularity for a mixed economy and welfare state , and as result , the government's role continued to grow. Interestingly , the new argument for government intervention in the macroeconomic level was also strengthened by the development of macroeconomic modeling , which was partly spurred by the socialist planning theory that developed in response to the earlier debate on the possibility of socialist economic calculation.