Does the government have to intervene in order to improve the standard of living? Not necessarily, because the free market can also raise it.
Without capital goods (the equipment that makes production possible, such as backhoes, sewing machines, machines for the transportation of products, etc…) the standard of living falls because we cannot produce enough to keep people all having the same amount of daily living products as before.
How can we raise the standard of living without government intervention?
We would need more consumer goods. For this we need more capital goods to make production faster and more efficient—therefore producing more. To gain capital goods, we need more savings and investments, which come from business men in the free market being able to operate without interference.
This is how the free market can improve the standard of living.