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You can't if you have Interventionism or Laissez Faire as economic policy. State Capitalism or Planned Economy are needed, but it's unlikely you'll get a ruling party with those policies unless you let conservative or reactionary rebels break the country.
This is true. Also, you can build railroads on your own, LF can't do that.
I guess it's personal preference, but I like Interventionist best. Some state capitalist in the early game helps you put up the factories you really, really want, even if they're not profitable, that sometimes comes in handy. But if I had to chose one type for the entire game it'd be interventionism.
Again, personal preference probably. I know of at least one beta who swears by state capitalism.