Driven by the financial crisis and the rise of China, the discussion on state capitalism has been revived. Nonetheless, it focuses heavily on empirical analysis and lacks theoretical elaboration. It also fails to exhibit the dynamics of theoretical development and the transition of major issues. This article examines the literature on state capitalism ranging from the late nineteenth century to the present time and aims to answer the following question: What is the core concept of state capitalism? It argues that state capitalism indicates that the state participates in the market in order to achieve its own political goals. Three periods can be distinguished in its theoretical development: the late nineteenth century to the early twentieth century, the end of the Second World War to the 1980s, and 2007 to date. This article points out that the analytical approach has shifted from structuralism to functionalism and to institutionalism, while the level of analysis has moved from macro to micro. The abundant and diverse empirical evidence that has emerged in recent years can facilitate our discussion when state intervention is unavoidable in capitalism’s operation.