I'm highly libertarian in my leanings, but even I'll admit there needs to be the occasional, and very rare government intervention.
A strong state is ultimately undesirable. Europe and Japan are good examples of this. It's led to statism, and an overbearing bureaucracy that stifles innovation, creates unnecessary barriers for those without the necessary government connections, and it erodes the power of free enterprise in general.
Europe and Japan seldom create new companies. Innovation is slow, and their largest companies have been the largest companies for a hundred years. Most of them were usually created by the government under a top down state based industrialization policy (all the German and Japanese car manufacturers were created this way). The overbearing state in those societies is actually holding back a very highly educated population. Where's the European Google, Amazon, Apple, Intel, Microsoft, SpaceX, etc?
However on the other hand, a completely laissez faire approach while desirable, can lead to problems with monopolization. Eventually the largest companies will concentrate capital to the point where they become monopolies that in themselves act in protective (and unscrupulous) manner, in similarity to an overbearing state. They can create barriers of entry, they can buy out competitors and shut them down (thus stifle innovation), and price discriminate.
This is where the state, or preferably the courts can keep these companies from overgrowing and becoming a problem down the line. Independent courts upholding fair market laws against unscrupulous market players is better than an overzealous and usually potentially vandetta driven government trying to go after individual companies. But the kicker is, it's the government that ultimately writes the laws anyhow. And the less laws they write, the better.
Free market capitalism with these ever so tiny corrections can keep re-inventing itself over and over again and can be generally stable as Britain and the USA have shown. The top down (strong state + strong flavour of the month idealogy whatever it is now - church/party membership/dear leader) eventually run out of steam and need to move into the realm of free market capitalism to re-invigorate themselves and remain stable.
Anti-trust laws can keep companies from becoming so big that they become governments in themselves or they suck all the capital out of the markets and keep competitors out.
But unfortunately, there's no such mechanism to keep governments from over-regulating. Therein lies the biggest problem with the size of government versus the size of corporations. And as already mentioned on this thread, you can ignore corporations for the most part, but you can't ignore an oversized, overbearing government. And since the government and the choices it makes, whether at the municipal, state, or federal level can have a disproportionate effect on your life, it ought to mean it should be restricted as much as possible.
In a scale from 1 to 100, 1 being pure market capitalism with an almost absent form of government (no taxes, no borders, no army, no tariffs, no government religious policy), and 100 being total government intervention (communism under Stalin, Fascism under Hitler, total control on all aspects from state capital allocation, to reproductive rights), being at 50 would not be fair and balanced as the government would grow itself from that mark quickly. We should be aiming at somewhere around 10-15 at most.