State is the form abstract Spirit "takes in actuality," and the "material form" of the rational goal of Spirit. As such, the State is a union between the Idea (the universal principle of rational freedom) and human interests or passion (the particular, subjective wills of individuals). The State arises as the embodiment of the Spirit of a given people, which in turn represents one stage in the development of universal Spirit in the world. Hegel is emphatic that the State does not limit freedom (as the "negative freedom" or social contract model would have it), but only limits the basest aspects of arbitrary subjective will ("caprice"). The limitation of these elements does not check true freedom at all, and in fact such limitation is requisite for any true freedom to exist.
Because the State provides the only possibility for universal rational freedom—which emphasizes individual choice in adhering to universal laws—its emergence also marks the beginning of history. No events have the proper historical import without the legal context of the State, and so no people without a State are the concern of history. It is also important to remember that the State refers to the "ethical totality" of a people and their culture, not just to the government.