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This paper challenges the notion that the military revolution of the sixteenth century was the crucial determinant in the emergence of centralized fiscal-military states in central Europe. Instead, it argues that warfare in the sixteenth and seventeenth century is best characterized by the notion of the ‘contractor state’ which relied on professional military enterprisers (“mercenaries”) to wage war. It does so by investigating the Thirty Years’ War (1618-1648) which was one of the largest and most destructive conflicts of pre-industrial Europe involving nearly all of its major powers. Based on novel, granular data the paper proves that urban financial contributions were extracted by military enterprisers and that these exceeded centrally-collected imperial contributions. In consequence, average household wealth declined by 37 percent during this period and urban debt crippled long-run investment.
