Frequently Asked Questions about Guilds

Guilds ruled many crafts and trades from the Middle Ages to the Industrial Revolution, and have always attracted debate and controversy. What kind of organizations were they? Who benefited from them? What were their disadvantages? Why did they exist so widely for so many centuries? Why did they finally disappear? Do they hold lessons for modern economies and societies?

For my book, The European Guilds: An Economic Analysis, I analyzed 17,384 observations of guilds in 23 European societies over nine centuries. Here I use those findings to shed light on some FAQs about guilds.

1. Weren’t guilds mainly social and cultural groups, not economic ones?

A guild, in the most general sense, is an association of people with common characteristics who want to pursue common ends. In different times and places, they’ve included religious fraternities, mutual welfare associations, place-of-origin lodges, dining societies, neighbourhood leagues, and militia clubs. But historically, most guilds were formed by people practising the same occupation. These occupational guilds sometimes engaged in sociability, processions, performances, worship, and politics. But they mainly acted to enrich their members by excluding competitors, keeping prices high, keeping wages low, reducing threats from innovation, and generating enough profits to pay off the political elites that enforced guild privileges. Their social and cultural activities helped them do this by creating internal cohesion, and their political activities got them legitimacy and enforcement from governments. In some cases, what guilds did brought certain benefits for the broader public. But overall, guilds pursued the economic interests of guild members.

2. Were guilds voluntary, open-access associations like PTA’s?

Guilds were compulsory – and closed. If you wanted to practise that occupation, you had to join the guild. And guilds limited entry. They discriminated against applicants who’d been born in other places, spoke the wrong language, had the wrong skin colour, or were disliked by existing members. Virtually all guilds excluded women, Jews, gypsies, Muslims, Orthodox Christians, and Anabaptists. Guilds excluded Protestants in Catholic places and Catholics in Protestant ones. Some Spanish guilds excluded boys whose skin was darker than quince jam, whose parents practised a “vile” occupation, or whose ancestors had been slaves or religious converts. Some German guilds excluded people who spoke other languages, descended from serfs, couldn’t document eight legitimately born great-grandparents, or had social contacts with “defiling” persons. All guilds everywhere excluded men who couldn’t afford the entry fees – on average more than a year’s income. A guild was compulsory, if you wanted to ply a trade. And guilds kept most people out.

3. Didn’t guilds protect workers, like modern unions?

Guilds were associations of employers. The members of the guild were the masters. They employed apprentices, journeyman, and free-lancers. Guilds often forbade their members to compete for workers by offering better pay or conditions. Many guilds allocated jobs centrally so journeymen couldn’t compare what different masters might offer. Weavers’ and dyers’ guilds agreed on artificially low pay for free-lance spinners. Guilds tried to prevent their workers from setting up their own associations. When workers went on strike, guilds organized bands of masters to beat them up, persuaded governments to send in soldiers, or blacklisted the ringleaders. Guilds were the opposite of labour unions. They were employers’ clubs that used their legal privileges to keep wages low and conditions poor.

4. Guilds excluded women and Jews, but didn’t cultural norms make that inevitable?

Patriarchal and anti-Semitic norms were widespread in the European past. But their practical implementation relied on institutions – such as guilds. Guilds protected their members from competition partly by discriminating against visible minorities. They issued rules barring women and Jews from mastership, guild members from employing them, and customers from buying their wares. These guild rules wouldn’t have been needed if everyone instinctively obeyed patriarchal and anti-Semitic norms. Guild masters often wanted to employ women and Jews. Customers wanted to buy from them. Many people didn’t let cultural norms about women and Jews affect their daily decisions – especially when it hit their pockets. Guilds didn’t just reflect cultural norms. They enforced these norms on people who wouldn’t otherwise have let culture determine their economic choices.

5. Didn’t guilds provide for women through all-female guilds and widows’ rights?

All-female guilds were vanishing rare. Just 55 were recorded in Europe from the thirteenth to the nineteenth century – compared to tens of thousands of male guilds. Mixed-sex guilds were also very uncommon, with only 343 recorded in that period. Usually most of their members were male, they were run by men, and they treated female members unfairly. Over 99 per cent of guilds from c. 1200 to c. 1860 were all-male clubs that just let masters’ widows continue the workshop in a limited way. They typically made widows fulfil conditions that males masters didn’t. A widow couldn’t remarry, her tenure of the guild license was limited, she had to have a son, she had to pay extra fees, or she had to please existing masters. Even then, she often faced limits on her workforce, equipment, raw materials, output, or voice in guild decisions. These constraints made it hard for a widow to stay in business: from 1354 to 1861, widows headed 18 per cent of town households but only 8 per cent of guild workshops. Many guilds blacklisted male journeymen who worked alongside females. It is difficult to conclude that the guild system provided well for women.

6. Didn’t guilds protect consumers?

Guilds regulated quality. But it was a pass-fail system. Producers who were excluded from the guild couldn’t legally sell to customers. Wares that didn’t pass the guild inspection couldn’t legally be sold. These rules aimed to keep quality high. But by restricting supply and stifling competition, they also kept prices high. Poor consumers often prefer lower prices, even if this means lower quality. If guilds had been the best way of protecting consumers, everyone should have chosen to buy guild-certified products from guild-certified producers. Instead, many people – especially the poor – risked prosecution to buy black market wares that cost less, even though they might be lower quality. Guilds’ legal monopolies meant guild masters didn’t have to provide the appropriate level of quality – the level consumers wanted.

7. Weren’t guilds beneficial because they provided skilled training?

Some guilds had apprenticeship systems. Surprisingly, many didn’t – 60 per cent of Italian guilds had no training requirements. Non-guild apprenticeships were also common, at least where guilds didn’t ban them. Where guilds did operate apprenticeship systems, they probably created some economic benefits. But they also suffered from flaws. Guilds did what was best for their members, so they turned a blind eye to masters who taught badly or abused their trainees. A third to a half of guild apprentices dropped out. Guilds used apprenticeship rules as entry barriers, rejecting many capable applicants (such as females and Jews) and charging high fees to the boys they admitted. Guilds probably benefited the economy by ensuring training for a privileged few. But they harmed it by denying it to many more young people who were eager to learn but couldn’t surmount the guild entry barriers. For the economy at large, guilds’ net effect on training was probably negative.

8. Surely people just got around guild restrictions?

Of course guild rules were sometimes broken. But they were enforced enough to have real effects. Contemporaries attacked guilds, spent resources to get into them, bought exemptions from their rules, and migrated to escape them. Guilds themselves lobbied governments, bribed officials, conducted lawsuits, hired spies, and undertook vigilante action to maintain their restrictions. People don’t invest time and money to attack and defend rules that can’t be enforced. Even when guild rules were evaded, this simply created a black-market “informal sector” where insiders slightly undercut their guild brothers, outsiders sold illicitly, and customers patronized them illegally. Evasion of guild rules didn’t mean that guilds had no economic effects, just that these effects consisted partly of defending their members’ privileges in the formal sector, and partly of pushing transactions into the informal sector where they were illegal, risky, and vulnerable to extortion. Even where guild restrictions were partly evaded, they had real economic effects.

9. Were guilds kind of like patents, rewarding inventors?

Governments try to encourage innovators by granting them patents – temporary monopolies – that let them appropriate some of the public benefits of their inventions. Guild monopolies are also sometimes seen as creating this kind of appropriability for inventors. But there were crucial differences. A guild monopoly was permanent, not temporary. All guild masters enjoyed the monopoly, whether they innovated or not. And guilds kept out competitors, reducing members’ incentives to incur the costs and risks of innovation. Guild members had a captive market, enabling them to enjoy monopoly profits without bothering to innovate. So European societies developed other tools to aid appropriability, like patents, prizes, and pensions for inventors. None provided perfect incentives for innovation. But inventors often preferred them to guilds – unsurprisingly, since guilds often blocked innovations that threatened the status quo. Innovation needs both rewards for inventors and pressures from competition. Guilds tipped the balance too far against competition.

10. Did guild assemblies help spread information about new technologies?

Many guilds held regular assemblies, where they communicated information to members. But this information didn’t involve technology. Instead, it mostly dealt with defending the guild’s privileges. The assembly began with an oral reading of the guild regulations. Offences against the regulations were punished. New masters and apprentices were registered. Existing masters were asked for their views on guild issues. Above all, lobbying and litigation was planned – including campaigns against disruptive technologies. So guild assemblies did transmit information, but seldom about technology. When they did discuss new technology, it was more often about why it should be opposed, not how it could be adopted.

11. Did guilds create “knowledge clusters”?

Guilds mostly required craftsmen to work inside the city limits, sometimes in specific neighbourhoods. Such spatial clusters might have helped transmit industrial knowledge. But concrete evidence is missing. And there are some reasons for doubt. For one thing, European industries progressively moved from urban clusters to the open countryside after c. 1500. This was partly because producers wanted to escape guild surveillance – the downside of knowledge clusters. Inside towns, most guilds didn’t require workshops to cluster. Some even forbade one master to set up shop too near another, to prevent too much competition. Where we do see occupational clusters inside towns, it was mostly because craftsmen wanted to cluster anyway. Industrial agglomerations arise spontaneously – including in modern economies – where being near other producers improves access to technical ideas, customers, suppliers, or skilled labour. There’s no evidence that clusters needed guilds to create them.

12. Did guilds diffuse innovations by making journeymen travel?

Some guilds required journeymen to go “on the tramp” for several years before they could apply for mastership. Travelling journeymen probably helped circulate techniques from town to town. But craft labour was highly mobile anyway. Around 1750, Europe had an estimated 300,000 migrant workers, only a minority of whom were guild journeymen. Journeymen weren’t required to travel by guilds in Renaissance Italy, Golden Age Holland, or eighteenth-century England, where innovations spread swiftly. Conversely, Germany and Austria remained technologically stagnant, despite strong guilds that made journeymen travel for years. Journeymen spent much of their time tramping from place to place failing to find work, while their technical knowledge decayed. They seldom travelled outside their own cultural zone. If they applied for mastership as non-locals, they ran into guild discrimination. They were quite unlikely vectors for transmitting technical knowledge.

13. Many things affect economic growth – isn’t it unfair to blame guilds?

Our best estimates show that strong guilds were associated with slow economic growth. Holland, England, and Flanders had the weakest guilds and the fastest growth in Europe. Germany, Spain, and Sweden had the strongest guilds and their economies stagnated. But association doesn’t imply causation. Central Europe, Iberia, and Scandinavia had other problems than strong guilds – absolutist states, high taxes, devastating wars, rapacious landlords, monopolistic merchants, coercive towns, predatory churchmen, and stagnant villages. Guilds were just one part of a broader institutional framework in which rulers granted privileges to powerful groups who used them to extract profits for themselves, with side-payments to rulers, harming the whole economy. Guilds mainly regulated industry and trade, whereas agriculture – and thus landlords and villages – mattered more. But although many factors stifled economic growth, guilds were probably one of them. Strong guilds were certainly not associated with high per capita GDP or rapid economic growth in medieval and early modern Europe.

14. Even if guilds harmed growth, didn’t they favour equality?

Many guilds aspired for internal equality among their masters. In fact, they used equality to justify limiting competition. Each guild master was forbidden to keep more than one workshop, employ more than a specified number of apprentices and journeymen, make or sell above a particular output quota, exceed statutory business hours, subcontract to poorer masters, or advertise his wares. Many guilds forbade their members to introduce innovations that might entice customers away from their fellows. Such rules probably reduced inequality inside guilds – though many guilds were still dominated by rich oligarchies. In the wider society, guilds excluded wide swathes of would-be producers, especially women, minorities, migrants, and people who couldn’t afford the admission fees. Guilds also enabled their members to overcharge customers and underpay workers. This inevitably widened the gap between the small group of privileged guild masters and the larger population of outsiders. In society at large, guilds almost certainly increased inequality.

15. Guilds existed so widely, surely they must have been beneficial?

Institutions don’t necessarily exist to benefit the whole economy – think of slavery or serfdom. Instead, they often survive by providing perks to the powerful, at the expense of everyone else. Guilds offered an effective way for two powerful groups – guild members and rulers – to capture a larger slice of the pie, even at the cost of diminishing its total size. Guilds provided an organizational mechanism for groups of businessmen to lobby rulers for market privileges that enriched guild members. Guilds then redirected a share of the profits to rulers in the form of cash gifts, taxes, favourable loans, regulatory cooperation, military services, and political support. Neither guilds nor rulers could have extracted these resources on their own. But by doing so, they harmed customers, workers, competitors, and the whole economy. Guilds existed for a reason. But this reason was not that they were beneficial.

16. Surely guilds weren’t all bad – isn’t there a middle way?

Guilds varied a lot. There were some that crushed competition and others that struggled to contain it. There were places like Florence or Lyons where a single guild might include multiple occupations, so internal squabbles blocked harmful collusion. There were cities like Bordeaux where half of all craftsmen never formed guilds, London where any member of any guild could practise any occupation he chose, and Amsterdam where guilds charged low fees and sometimes admitted women and Jews. But this didn’t mean those guilds were good. They still aspired to block entry, restrict competition, overcharge customers, and underpay workers – they were just not very effective. Even in places where guilds were weak, the most dynamic industries escaped to guild-free enclaves and the open countryside. Weak guilds struggled to stifle competition, which meant they caused less harm. But they weren’t actually beneficial. It’s a bit like asking whether there is a middle way on slavery or serfdom: they were good for slave-owners and serf-landlords, but bad for the whole economy. Some guilds were certainly less harmful than others. But hardly any had positive economic effects.

17. So why did guilds ever disappear?

Even in guilds’ medieval heyday, there were “liberties”, towns, or even entire regions where guilds were weak or absent, creating interstices within which anyone could practice a trade, even if she was a woman, non-citizen, Jew, or just a poor labourer who couldn’t afford the guild fees. After 1500, Europe saw a divergence in guild development. In “corporatist-absolutist” European states, such as France, Spain, Austria, Scandinavia, and the German territories, rulers intensified their fiscal and regulatory reliance on guilds and enforced guild privileges ever more strictly. But in Flanders, the Netherlands, and England governments and small businessmen gradually discovered the benefits of shifting away from identity-based privileges to impersonal markets regulated by impartial states. A complex of factors probably contributed: parliaments that constrained how rulers raised revenues and rewarded special-interest groups; a diversified urban system where towns competed rather than colluding; a more variegated social structure including prosperous, articulate and influential people who wanted to be entrepreneurs and objected to business being monopolized by exclusive guilds; more efficient financial markets and tax-collection, reducing rulers’ temptation to raise funds by granting privileges to special-interest groups. Much further research is needed to identify the underlying causes that brought these factors together in a new equilibrium. But such research is crucial, given the importance to every developing economy of making the transition from identity-based privileges to open-access institutions.