ABSTRACT
The modern state that emerged from the inflations and religious wars of the sixteenth century rested on the premise that there is only one political institution in society, namely, the central government. There are no other legitimate institutions. Modern political doctrine asserted that there are no legitimate power centers elsewhere, inside or outside the state. There was no difference between conservatives and liberals. They differed only in respect to the institutional structure of central government itself. In this respect, there was also no difference between classical economists and Karl Marx. The shift to institutional performance thus meant a very great advance in the level of performance. But it also meant that society became pluralist. The institutions of modern society were each created for a single specific purpose. Business exists to produce goods and services; it is an economic institution. Central government has become the more impotent the bigger it has grown.
