Markets and States

This chapter focuses on the dominant political economy models that try to explain the relation between markets and states in Europe's early modern economies. Placed into the context of Spanish history, some of the main assumptions of the model turn out to be highly problematic and in urgent need of revision. A lopsided focus on the state as predator has distracted economists and economic historians from trying to understand better how states became jurisdictionally and economically integrated units in the first place. The void has been filled by a number of poorly historicized references to concepts borrowed from historians and historical sociologists such as “absolutism” and “patrimonialism.” These concepts were supposed to delineate the development of European states from fragmented sovereignty to unified nation-states.