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Over Europe as a whole, alterations in state control of capital and of coercion between AD 900 and the present have followed two parallel arcs. At first, during the age of patrimonialism, European monarchs generally extracted what capital they needed as tribute or rent from lands and populations that lay under their immediate control - often within stringent contractual limits on the amounts they could demand. In the time of brokerage (especially between 1400 and 1700 or so), they relied heavily on formally independent capitalists for loans, for management of revenue-producing enterprises, and for collection of taxes. By the eighteenth century, however, the time of nationalization had come; many sovereigns were incorporating the fiscal apparatus directly into the state structure, and drastically curtailing the involvement of independent contractors. The last century or so, the age of specialization, has brought a sharper separation of fiscal from military organization and an increasing involvement of states in the oversight of fixed capital.
On the side of coercion, a similar evolution took place. During the period of patrimonialism, monarchs drew armed force from retainers, vassals, and militias who owed them personal service - but again within significant contractual limits. In the age of brokerage (again especially between 1400 and 1700) they turned increasingly to mercenary forces supplied to them by contractors who retained considerable freedom of action. Next, during nationalization, sovereigns absorbed armies and navies directly into the state's administrative structure, eventually turning away from foreign mercenaries and hiring or conscripting the bulk of their troops from their own citizenries. Since the mid-nineteenth century, in a phase of specialization, European states have consolidated the system of citizen militaries backed by large civilian bureaucracies, and split off police forces specialized in the use of coercion outside of war.
By the nineteenth century, most European states had internalized both armed forces and fiscal mechanisms; they thus reduced the governmental roles of tax farmers, military contractors, and other independent middlemen. Their rulers then continued to bargain with capitalists and other classes for credit, revenues, manpower, and the necessities of war. Bargaining, in its turn, created numerous new claims on the state: pensions, payments to the poor, public education, city planning, and much more. In the process, states changed from magnified war machines into multiple-purpose organizations. Their efforts to control coercion and capital continued, but in the company of a wide variety of regulatory, compensatory, distributive, and protective activities.
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Charles Tilly (Coercion, Capital, and European States, A.D. 990-1992)