History of guilds
Early guild-like associations
A type of guild was known in Roman times. Known as collegium, collegia or corpus, these were organised groups of merchants who specialised in a particular craft and whose membership of the group was voluntary. One such example is the corpus naviculariorum, the college of long-distance shippers based at Rome's La Ostia port. The Roman guilds failed to survive the collapse of the Roman Empire. 
In medieval cities, craftsmen tended to form associations based on their trades, confraternities of textile workers, masons, carpenters, carvers, glass workers, each of whom controlled secrets of traditionally imparted technology, the "arts" or "mysteries" of their crafts. Usually the founders were free independent master craftsmen who hired apprentices.
guild sign of a glazier
— in Germany
. These signs can be found in many old European towns where guild members marked their places of business. Many survived through time or staged a comeback in industrial times. Today they are restored or even newly created, especially in old town areas.
There were several types of guilds, including the two main categories of merchant guilds and craft guilds but also the frith guild and religious guild. Guilds arose beginning in the High Middle Ages as craftsmen united to protect their common interests. In the German city of Augsburg craft guilds are being mentioned in the Towncharter of 1156. 
The continental system of guilds and merchants arrived in England after the Norman Conquest, with incorporated societies of merchants in each town or city holding exclusive rights of doing business there. In many cases they became the governing body of a town. For example, London's Guildhall became the seat of the Court of Common Council of the City of London Corporation, the world’s oldest continuously elected local government whose members to this day must be Freemen of the City. The Freedom of the City, effective from the Middle Ages until 1835, gave the right to trade, and was only bestowed upon members of a Guild or Livery.
Early called "guilds" (for the gold deposited in their common funds) were denounced by Catholic clergy for their "conjurations"—the binding oaths sworn among the members to support one another in adversity, kill specific enemies, and back one another in feuds or in business ventures. The occasion for these oaths were drunken banquets held on December 26, the pagan feast of Jul (Yule)—in 858, West Francian Bishop Hincmar sought vainly to Christianise the guilds.
In the Early Middle Ages, most of the Roman craft organisations, originally formed as religious confraternities, had disappeared, with the apparent exceptions of stonecutters and perhaps glassmakers, mostly the people that had local skills. Gregory of Tours tells a miraculous tale of a builder whose art and techniques suddenly left him, but were restored by an apparition of the Virgin Mary in a dream. Michel Rouche remarks that the story speaks for the importance of practically transmitted journeymanship.
In France, guilds were called corps de métiers. According to Viktor Ivanovich Rutenburg, "Within the guild itself there was very little division of labour, which tended to operate rather between the guilds. Thus, according to Étienne Boileau's Book of Handicrafts, by the mid-13th century there were no less than 100 guilds in Paris, a figure which by the 14th century had risen to 350." There were different guilds of metal-workers: the farriers, knife-makers, locksmiths, chain-forgers, nail-makers, often formed separate and distinct corporations; the armourers were divided into helmet-makers, escutcheon-makers, harness-makers, harness-polishers, etc. In Catalan towns, specially at Barcelona, guilds or gremis were a basic agent in the society: a shoemakers' guild is recorded in 1208.
In England, specifically in the City of London Corporation, more than 110 guilds, referred to as livery companies, survive today, with the oldest more than a thousand years old. Other groups, such as the Worshipful Company of Tax Advisers, have been formed far more recently. Membership in a livery company is expected for individuals participating in the governance of The City, as the Lord Mayor and the Remembrancer.
The guild system reached a mature state in Germany circa 1300 and held on in German cities into the 19th century, with some special privileges for certain occupations remaining today. In the 15th century, Hamburg had 100 guilds, Cologne 80, and Lübeck 70. The latest guilds to develop in Western Europe were the gremios of Spain: e.g., Valencia (1332) or Toledo (1426).
Not all city economies were controlled by guilds; some cities were "free." Where guilds were in control, they shaped labor, production and trade; they had strong controls over instructional capital, and the modern concepts of a lifetime progression of apprentice to craftsman, and then from journeyman eventually to widely recognized master and grandmaster began to emerge. In order to become a master, a journeyman would have to go on a three-year voyage called journeyman years. The practice of the journeyman years still exists in Germany and France.
As production became more specialized, trade guilds were divided and subdivided, eliciting the squabbles over jurisdiction that produced the paperwork by which economic historians trace their development: The metalworking guilds of Nuremberg were divided among dozens of independent trades in the boom economy of the 13th century, and there were 101 trades in Paris by 1260. In Ghent, as in Florence, the woolen textile industry developed as a congeries of specialized guilds. The appearance of the European guilds was tied to the emergent money economy, and to urbanization. Before this time it was not possible to run a money-driven organization, as commodity money was the normal way of doing business.
The guild was at the center of European handicraft organization into the 16th century. In France, a resurgence of the guilds in the second half of the 17th century is symptomatic of the monarchy's concerns to impose unity, control production and reap the benefits of transparent structure in the shape of more efficient taxation.
The guilds were identified with organizations enjoying certain privileges (letters patent), usually issued by the king or state and overseen by local town business authorities (some kind of chamber of commerce). These were the predecessors of the modern patent and trademark system. The guilds also maintained funds in order to support infirm or elderly members, as well as widows and orphans of guild members, funeral benefits, and a 'tramping' allowance for those needing to travel to find work. As the guild system of the City of London declined during the 17th century, the Livery Companies transformed into mutual assistance fraternities along such lines.
European guilds imposed long standardized periods of apprenticeship, and made it difficult for those lacking the capital to set up for themselves or without the approval of their peers to gain access to materials or knowledge, or to sell into certain markets, an area that equally dominated the guilds' concerns. These are defining characteristics of mercantilism in economics, which dominated most European thinking about political economy until the rise of classical economics.
The guild system survived the emergence of early capitalists, which began to divide guild members into "haves" and dependent "have-nots". The civil struggles that characterize the 14th-century towns and cities were struggles in part between the greater guilds and the lesser artisanal guilds, which depended on piecework. "In Florence, they were openly distinguished: the Arti maggiori and the Arti minori—already there was a
popolo grasso and a
popolo magro". Fiercer struggles were those between essentially conservative guilds and the merchant class, which increasingly came to control the means of production and the capital that could be ventured in expansive schemes, often under the rules of guilds of their own. German social historians trace the Zunftrevolution, the urban revolution of guildmembers against a controlling urban patriciate, sometimes reading into them, however, perceived foretastes of the class struggles of the 19th century.
In the countryside, where guild rules did not operate, there was freedom for the entrepreneur with capital to organize cottage industry, a network of cottagers who spun and wove in their own premises on his account, provided with their raw materials, perhaps even their looms, by the capitalist who took a share of the profits. Such a dispersed system could not so easily be controlled where there was a vigorous local market for the raw materials: wool was easily available in sheep-rearing regions, whereas silk was not.
In Florence, Italy, there were seven to twelve "greater guilds" and fourteen "lesser guilds" the most important of the greater guilds was that for judges and notaries, who handled the legal business of all the other guilds and often served as an arbitrator of disputes. Other greater guilds include the wool, silk, and the money changers' guilds. They prided themselves on a reputation for very high-quality work, which was rewarded with premium prices. The guilds fined members who deviated from standards. Other greater guilds included those of doctors, druggists, and furriers. Among the lesser guilds, were those for bakers, saddle makers, ironworkers and other artisans. They had a sizable membership, but lacked the political and social standing necessary to influence city affairs.
The guild was made up by experienced and confirmed experts in their field of handicraft. They were called master craftsmen. Before a new employee could rise to the level of mastery, he had to go through a schooling period during which he was first called an apprentice. After this period he could rise to the level of journeyman. Apprentices would typically not learn more than the most basic techniques until they were trusted by their peers to keep the guild's or company's secrets.
Like journey, the distance that could be travelled in a day, the title 'journeyman' derives from the French words for 'day' (jour and journée) from which came the middle English word journei. Journeymen were able to work for other masters, unlike apprentices, and generally paid by the day and were thus day labourers. After being employed by a master for several years, and after producing a qualifying piece of work, the apprentice was granted the rank of journeyman and was given documents (letters or certificates from his master and/or the guild itself) which certified him as a journeyman and entitled him to travel to other towns and countries to learn the art from other masters. These journeys could span large parts of Europe and were an unofficial way of communicating new methods and techniques, though by no means all journeymen made such travels — they were most common in Germany and Italy, and in other countries journeymen from small cities would often visit the capital.
After this journey and several years of experience, a journeyman could be received as master craftsman, though in some guilds this step could be made straight from apprentice. This would typically require the approval of all masters of a guild, a donation of money and other goods (often omitted for sons of existing members), and the production of a so-called "masterpiece,' which would illustrate the abilities of the aspiring master craftsman; this was often retained by the guild.
The medieval guild was established by charters or letters patent or similar authority by the city or the ruler and normally held a monopoly on trade in its craft within the city in which it operated: handicraft workers were forbidden by law to run any business if they were not members of a guild, and only masters were allowed to be members of a guild. Before these privileges were legislated, these groups of handicraft workers were simply called 'handicraft associations'.
The town authorities might be represented in the guild meetings and thus had a means of controlling the handicraft activities. This was important since towns very often depended on a good reputation for export of a narrow range of products, on which not only the guild's, but the town's, reputation depended. Controls on the association of physical locations to well-known exported products, e.g. wine from the Champagne and Bordeaux regions of France, tin-glazed earthenwares from certain cities in Holland, lace from Chantilly, etc., helped to establish a town's place in global commerce — this led to modern trademarks.
In many German and Italian cities, the more powerful guilds often had considerable political influence, and sometimes attempted to control the city authorities. In the 14th century, this led to numerous bloody uprisings, during which the guilds dissolved town councils and detained patricians in an attempt to increase their influence. In fourteenth-century north-east Germany, people of Wendish, i.e. Slavic, origin were not allowed to join some guilds. According to Wilhelm Raabe, "down into the eighteenth century no German guild accepted a Wend."
Fall of the guilds
An example of the last of the British Guilds meeting rooms c. 1820
As Ogilvie (2004) shows, the guilds negatively affected quality, skills, and innovation. Through what economists now call "rent-seeking" they imposed deadweight losses on the economy. Ogilvie says they generated no demonstrable positive externalities and notes that industry began to flourish only after the guilds faded away. Guilds persisted over the centuries because they redistributed resources to politically powerful merchants. On the other hand, Ogilvie agrees, guilds created "social capital" of shared norms, common information, mutual sanctions, and collective political action. This social capital benefited guild members, even as it hurt outsiders.
The guild system became a target of much criticism towards the end of the 18th century and the beginning of the 19th century. They were believed to oppose free trade and hinder technological innovation, technology transfer and business development. According to several accounts of this time, guilds became increasingly involved in simple territorial struggles against each other and against free practitioners of their arts.
Two of the most outspoken critics of the guild system were Jean-Jacques Rousseau and Adam Smith, and all over Europe a tendency to oppose government control over trades in favour of laissez-faire free market systems was growing rapidly and making its way into the political and legal system. The French Revolution saw guilds as a last remnant of feudalism. The Le Chapelier Law of 1791 abolished the guilds in France. Smith wrote in The Wealth of Nations (Book I, Chapter X, paragraph 72):
It is to prevent this reduction of price, and consequently of wages and profit, by restraining that free competition which would most certainly occasion it, that all corporations, and the greater part of corporation laws, have been established. (...) and when any particular class of artificers or traders thought proper to act as a corporation without a charter, such adulterine guilds, as they were called, were not always disfranchised upon that account, but obliged to fine annually to the king for permission to exercise their usurped privileges.
Karl Marx in his Communist Manifesto also criticized the guild system for its rigid gradation of social rank and the relation of oppressor/oppressed entailed by this system. From this time comes the low regard in which some people hold the guilds to this day. In part due to their own inability to control unruly corporate behavior, the tide turned against the guilds.
Because of industrialization and modernization of the trade and industry, and the rise of powerful nation-states that could directly issue patent and copyright protections — often revealing the trade secrets — the guilds' power faded. After the French Revolution they fell in most European nations through the 19th century, as the guild system was disbanded and replaced by free trade laws. By that time, many former handicraft workers had been forced to seek employment in the emerging manufacturing industries, using not closely guarded techniques but standardized methods controlled by corporations.
Influence of guilds
This section does not cite any sources
. (December 2008)
Guilds are sometimes said to be the precursors of modern trade unions. Guilds, however, can also be seen as a set of self-employed skilled craftsmen with ownership and control over the materials and tools they needed to produce their goods. Guilds were more like cartels than they were like trade unions (Olson 1982). However, the journeymen organizations, which were at the time illegal, may have been influential.
The exclusive privilege of a guild to produce certain goods or provide certain services was similar in spirit and character with the original patent systems that surfaced in England in 1624. These systems played a role in ending the guilds' dominance, as trade secret methods were superseded by modern firms directly revealing their techniques, and counting on the state to enforce their legal monopoly.
Some guild traditions still remain in a few handicrafts, in Europe especially among shoemakers and barbers. Some ritual traditions of the guilds were conserved in order organisations such as the Freemasons, allegedly deriving from the Masons Guild, and the Oddfellows, allegedly derived from various smaller guilds. These are, however, not very important economically except as reminders of the responsibilities of some trades toward the public.
Modern antitrust law could be said to derive in some ways from the original statutes by which the guilds were abolished in Europe.
The economic consequences of guilds have led to heated debates among economic historians. On the one side, scholars say that since merchant guilds persisted over long periods they must have been efficient institutions (since inefficient institutions die out). Others say they persisted not because they benefited the entire economy but because they benefited the owners, who used political power to protect them. Ogilvie (2011) says they regulated trade for their own benefit, were monopolies, distorted markets, fixed prices, and restricted entrance into the guild. Ogilvie (2008) argues that their long apprenticeships were unnecessary to acquire skills, and their conservatism reduced the rate of innovation and made the society poorer. She says their main goal was rent seeking, that is, to shift money to the membership at the expense of the entire economy.
Epstein and Prak's book (2008) rejects Ogilvie's conclusions. Specifically, Epstein argues that guilds were cost-sharing rather than rent-seeking institutions. They located and matched masters and likely apprentices through monitored learning. Whereas the acquisition of craft skills required experience-based learning, he argues that this process necessitated many years in apprenticeship.
The extent to which guilds were able to monopolize markets is also debated.
Women in guilds
For the most part, medieval guilds limited women's participation, and usually only the widows and daughters of known masters were allowed in. Even if a woman entered a guild, she was excluded from guild offices. It's important to note that while this was the overarching practice, there were guilds and professions that did allow women's participation, and that the Medieval era was an ever-changing, mutable society—especially considering that it spanned hundreds of years and many different cultures. There were multiple accounts of women's participation in guilds in England and the Continent. In a study of London silkwomen of the 15th century by Marian K. Dale, she notes that medieval women could inherit property, belong to guilds, manage estates, and run the family business if widowed. The Livre des métiers de Paris (Book of Trades of Paris) was compiled by Étienne Boileau, the Grand Provost of Paris under King Louis IX. It documents that 5 out of 110 Parisian guilds were female monopolies, and that only a few guilds systematically excluded women. Boileau notes that some professions were also open to women: surgeons, glass-blowers, chain-mail forgers. Entertainment guilds also had a significant number of women members. John, Duke of Berry documents payments to female musicians from Le Puy, Lyons, and Paris.
Women did have problems with entering healers' guilds, as opposed to their relative freedom in trade or craft guilds. Their status in healers' guilds were often challenged. The idea that medicine should only be practice by men was supported by the Catholic Church, royal heads, and secular authorities at the time. It is believed that the Inquisition and witch hunts throughout the ages contributed to the lack of women in medical guilds.