This is the third part of an article on the distribution of power and the nature of the state in Western industrialized societies and their implications in medicine. Parts I and II were published in the preceding issue of this Journal. Part I presented a critique of contemporary theories of the Western system of power; discussed the countervailing pluralist and power elite theories, as well as those of bureaucratic and professional control; and concluded with an examination of the Marxist theories of economic determinism, structural determinism, and corporate statism. Part II presented a Marxist theory of the role, nature, and characteristics of state intervention. Part III focuses on the mode of that intervention and the reasons for its growth, with an added analysis of the attributes of state intervention in the health sector, and of the dialectical relationship between its growth and the current fiscal crisis of the state. In all three parts, the focus is on Western European countries and on North America, with many examples and categories from the area of medicine.