Ye are more unwise,...for the scabbard is worth ten of the swords, for whiles ye have the scabbard upon you, ye shall never lose no blood, be ye never so sore wounded; therefore keep well the scabbard always with you.
Of course, Arthur fails completely at this, being too trusting of his sister, Morgan le Fay, who switches both the sword and the scabbard with fakes and gives the real ones to Sir Accolon, who will later therefore nearly kill Arthur because the two together -- the sword that can cut even steel and the scabbard that can protect from any wound -- make him just short of invincible, and is only saved because the Lady of the Lake is impressed by Arthur's knightly prowess even in a battle he obviously cannot win. Arthur manages to retrieve both, but Morgan le Fay steals the scabbard again and throws it in a lake, never to be found again.
There are many ways one could read this, but one way is as a symbol of Arthur's reign, a reign of justice but of justice maintained by the naked sword, by the knights errant, and by that very fact a justice precarious and in need of constant maintenance. Perhaps the loss of the scabbard should be linked to the loss of Merlin, which happens in the midst of all this, but it is surely the case that the kingdom was not such that it would "never lose no blood" regardless of its being wounded; civil war would come, bleeding the best and finest in the kingdom, and leaving it weak and vulnerable for when Arthur himself in the last battle receives a wound from which he cannot recover.
Read it so. Then it serves as a fitting symbol for what is, I think, perhaps the most important feature of political power. This feature, which might be called the Paradox of Temporal Power, is that the state works by coercive power, but this power is working at its best when not used. Or, to put it more figuratively: The perfection of temporal power is the sheathed, and not the naked, sword. Sometimes, of course, one must unsheathe the sword, but this is always because something has broken down; and if you cannot soon return it to the scabbard, this is a sign of something having gone wrong.
We see this in practical terms in many ways:
-- The healthiest form of tax regime is when people, while recognizing the state's power to coerce taxes, primarily pay taxes without being coerced.
-- The healthiest form of police system is when, despite the capability to come down heavily, the police largely get voluntary cooperation from the citizens.
-- The healthiest regulatory system is when, despite the fact that every regulation is a potential ground of coercion, the regulations largely get followed without becoming actual grounds of coercion.
-- The defense of the nation is at its healthiest when its military power is ready but not constantly having to be used.
In all these cases, and in any other case where coercive powers of the state may be involved, the form that is least likely to break down is the form where things have been set up so that the coercive power is usually sheathed, and only becomes a naked blade briefly to correct the inevitable flaws and failings that might arise. Such a system, even wounded, does not bleed out its life, but endures.
This is something that perhaps needs to be considered more often. When people talk about the coercive powers of the state, they regularly talk about them as things to be used, and actively used, and often used; but, while a state needs them to be there, they need to be usually in a 'resting state'. A state whose coercive powers are often and actively being used is a state in distress. This resting state is not something that can be had by mere will; you have to set up your system so that the coercive power only rarely has to flash out. And woe indeed to the state that loses entirely the scabbard for its sword.