In the United States and a few other developed countries, firms tend to be freestanding units that are widely held, and their subsidiaries are generally unlisted and wholly owned. But those forms are in fact a relative oddity when considered from a global perspective (La Porta et al. 1999). Most often in history and around the world, business activity is organized in

groups, pyramids of listed and unlisted firms, generally but not always under family control. In a sense, it would seem, there is something “natural” about pyramidal groups: they seem to crop up whenever overnments do not take active measures to beat them down (Morck 2010). North, Wallis, and Weingast (2009) have recently put forward a theory of what they call the natural state. This form of state is “natural” in the same sense that a family firm or a pyramidal group might be considered “natural”: it is the default form of organization. The essay I propose will scrutinize in much greater detail the analogy between business groups and natural states. It will do so by considering whether we can understand business groups as themselves examples of natural states.