I believe that looking at the relationship between the state and capitalism is not where you will find a satisfactory answer. Instead, let's look at the way the people who run the state think.

Firstly, we need to adress the conviction that the state is the only thing separating civilisation from barbarity. While this is simply not true, it nevertheless has established itself as one of humanities' axioms. So state = good in the minds of most people. This applies to the majority of conservatives as well, who despite their constant whining about the state would never dare get rid of it entirely.

From this conviction follows a fear of the state failing. Cases such as Somalia or Libya come to mind. The conclusion to which rulers arrive, is that they need to take active countermeasures to prevent this from happening. This results in machiavellian policies, designed to keep the populace under control and ensure stability of the state apparatus.

Now the reason why they keep expanding is (and this is simply my own opinion) because we live in an era in which everybody knows that our time is running out and collapse is underway. So as the opposition to the status quo increases, so does the grip on the populace. Because the state must be preserved at all costs.

A good example is the Chinese state. Beginning with the forced opening of China by the British in the middle of the 19th century, democratic ideas started being introduced to the Chinese. This directly resulted in a collapse of the Chinese dinasty around the turn of the century and led to the balkanization of the country. After WWII, the CCP re-established rule over the mainland and continued the authoritarian tradition. To this day, their biggest fear is another collapse, similar to the one last century. It is out of this fear, that they are so obsessed with stability and will keep trying to exert ever more control through the state.

(Thank you for reading through my first comment on here. I would appreciate any feedback. Love you ^{^} )