the notion-state is nowadays the unit of affairs. It is a purely European form which has been exported to parts of the world that had hitherto known only tribalism. We may look on national income accounting as if it deals in categories both natural and proper, but nation-states are not God-given. They are the creations of post-feudal Europe. By the time the political arithmeticians of the late seventeenth century began to study economic activity, nation-states had become the dominant vehicles of policy and the most convenient receptacles for quantitative data. Whereas once states had been federations or amalgams of provinces each of which adapted instructions from the centre to fit an individual view of its needs, by that time most of Europe had been organised into centralised states. These states were engaged in modernising themselves, extending the market system albeit by political means and for political ends.

The earliest European states had been the products of dynastic rule by the leaders of warrior bands. These men gathered and stabilised groups of followers with similar ethnic origins, customs, and languages or dialects. As political expansion drew in less similar peoples, common organisation was relied on to make them more alike (Strayer 1966; 1970).