From custom to command: an evolutionary economic analysis of feudal law and the rise of the modern state

This contribution develops an evolutionary economic analysis of feudal law as a decentralized system of governance that sustained social order in the absence of a central authority. Under feudalism, enforcement was reputational and intragroup: rules emerged from custom, lineage, and reciprocity rather than from codified legislation. The feudal order thus represented a self-organizing equilibrium, where behavioral regularities were transmitted through generational imitation and stabilized by local recognition. The transition from feudalism to the modern State is interpreted as an endogenous institutional shift driven by efficiency: when intergroup coordination costs exceeded the advantages of local enforcement, societies converged toward centralization. The State, in this view, did not replace custom but internalized its enforcement functions within a territorial hierarchy. This framework connects institutional economics with the history of legal thought, showing how the logic of law precedes the rise of sovereignty and evolves through mechanisms of selection and retention. By linking spontaneous order and state formation, the paper provides a unified theory of institutional evolution from customary governance to codified authority and offers broader insights into modern forms of decentralized governance such as digital platforms, blockchain systems, and transnational law.