In the fall of 1995 I was visiting New College at Oxford University as a guest of Michael Hechter. At that time, I was working on a paper on the nature of the state, and I asked Michael to read it. Once he asked “Why don't you make it a book?” it became clear to me that that was where I was heading, and there was no going back. Michael, who is now back at the University of Washington, has been a constant source of advice and encouragement ever since.

A major theme of this book concerns agreements, their enforcement, and control of the force-using enforcer. The enforcement organization the state employs specializes in the use of violence. People, however, can use other third parties, such as religious institutions or private firms, for enforcement, or they may engage in self-enforcement. In fact, they frequently use more than one enforcer to enforce individual agreements. The approach in this book differs from other approaches concerned with the state, such as those of Olson and North (as well as Hobbes), by focusing on how enforcers are chosen and how those force-using enforcers are prevented from becoming dictators. An analysis of the enforcement of agreements and the choice of enforcers is shown to require the tools of conventional price theory and of game theory. For that reason, in spite of its non-conventional subject, this book uses tools from the economist's tool-bag.

The price theory used here is directed primarily toward the analysis of property rights and the cost of transacting. A major distinguishing characteristic of this analysis is the absence of absolutes. Acquisition of information is costly, and knowledge of economic entities is never complete.