Chapter 4: The Origin and Future of a State

On October 1, 1949, Mao Zedong established the Central People’s Government of the People’s Republic of China. Some wondered why a central government was necessary for a People’s Republic. Mao understood that the state and the government represent different concepts and different roles: like enterprises, states cannot self-govern and must rely on agents to supervise their management and operation. Enterprises require a chief executive officer (CEO) and board of directors; states require a government. In this metaphor, governments act as state CEOs.

In this context, we can refer to the space that is governed by a state as a “country,” and the state as the social structure that provides governance for that space. But economists, philosophers, and sociologists emphasize different aspects of that governance. Myerson (2011) proposed that states are complex social units in which a property rights system protects the wealth of individuals, enterprises, and social groups and that states are self-governed within a physical space (a country) that remains independent of surrounding states. Geographers focus on the state’s geographical characteristics, such as its mountains, rivers, and borders (i.e., they treat it as a country). In contrast, sociologists emphasize the ethnic and other groups that comprise the state and how the assembled groups can act together. Political economists focus on governance mechanisms and government institutions.