This study intends to formulate an interdisciplinary synthesis of how the permanent armed forces in Europe developed in interaction with new structures and institutions for political decision-making and administration of resources. It is based on political, military and technological history and economic theory about entrepreneurship, complex organisations and protection against violence seen as a commodity on an imperfect market. Methodology and theoretical framework have been developed in earlier studies. There are no syntheses about European state formation based on economic theory. Earlier studies have not bridged the gulf between state formation as a political process and the fact that the concrete formation of states was organisation building, which may be analysed with theories about organisations and entrepreneurship. States can be analysed as protection-selling enterprises, which in competition with each other created armed forces for control of violence and power wielding. The rise of these organisations was also an early example of that complex organisations may be efficient managers of resources, an innovation of decisive importance for Europe's position in the world. The study is based on a wide survey of empirical research about states and armed forces. This is analysed with quantitative and comparative methods and economic theory. Questions, explanations and causal connection are therefore different than in earlier syntheses.