IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v28y2014i4p169-92.html
   My bibliography  Save this article

The Economics of Guilds

Author

Listed:
  • Sheilagh Ogilvie

Abstract

Occupational guilds in medieval and early modern Europe offered an effective institutional mechanism whereby two powerful groups, guild members and political elites, could collaborate in capturing a larger slice of the economic pie and redistributing it to themselves at the expense of the rest of the economy. Guilds provided an organizational mechanism for groups of businessmen to negotiate with political elites for exclusive legal privileges that allowed them to reap monopoly rents. Guild members then used their guilds to redirect a share of these rents to political elites in return for support and enforcement. In short, guilds enabled their members and political elites to negotiate a way of extracting rents in the manufacturing and commercial sectors, rents that neither party could have extracted on its own. First, I provide an overview of where and when European guilds arose, what occupations they encompassed, how large they were, and how they varied across time and space. I then examine how guild activities affected market competition, commercial security, contract enforcement, product quality, human capital, and technological innovation. The historical findings on guilds provide strong support for the view that institutions arise and survive for centuries not because they are efficient but because they serve the distributional interests of powerful groups.

Suggested Citation

  • Sheilagh Ogilvie, 2014. "The Economics of Guilds," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 169-192, Fall.
  • Handle: RePEc:aea:jecper:v:28:y:2014:i:4:p:169-92
    Note: DOI: 10.1257/jep.28.4.169
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.28.4.169
    Download Restriction: no

    References listed on IDEAS

    as
    1. Hickson, Charles R. & Thompson, Earl A., 1991. "A new theory of guilds and european economic development," Explorations in Economic History, Elsevier, vol. 28(2), pages 127-168, April.
    2. Richardson, Gary, 2004. "Guilds, laws, and markets for manufactured merchandise in late-medieval England," Explorations in Economic History, Elsevier, vol. 41(1), pages 1-25, January.
    3. Epstein, S. R., 1998. "Craft Guilds, Apprenticeship, and Technological Change in Preindustrial Europe," The Journal of Economic History, Cambridge University Press, vol. 58(03), pages 684-713, September.
    4. Sheilagh Ogilvie, 2004. "Guilds, efficiency, and social capital: evidence from German proto-industry," Economic History Review, Economic History Society, vol. 57(2), pages 286-333, May.
    5. Oliver Volckart & Antje Mangels, 1999. "Are the Roots of the Modern Lex Mercatoria Really Medieval?," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 427-450, January.
    6. Sheilagh Ogilvie, 2008. "Rehabilitating the guilds: a reply," Economic History Review, Economic History Society, vol. 61(1), pages 175-182, February.
    7. Ogilvie, Sheilagh, 2003. "A Bitter Living: Women, Markets, and Social Capital in Early Modern Germany," OUP Catalogue, Oxford University Press, number 9780198205548.
    8. Van Zanden, Jan Luiten & Prak, Maarten, 2006. "Towards an economic interpretation of citizenship: The Dutch Republic between medieval communes and modern nation-states," European Review of Economic History, Cambridge University Press, vol. 10(02), pages 111-145, August.
    9. Freudenberger, Herman, 1960. "The Woolen-Goods Industry of the Habsburg Monarchy in the Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 20(03), pages 383-406, September.
    10. Wallis, Patrick, 2008. "Apprenticeship and Training in Premodern England," The Journal of Economic History, Cambridge University Press, vol. 68(03), pages 832-861, September.
    11. van den Heuvel, Danielle & Ogilvie, Sheilagh, 2013. "Retail development in the consumer revolution: The Netherlands, c. 1670–c. 1815," Explorations in Economic History, Elsevier, vol. 50(1), pages 69-87.
    12. Ronda Larmour, 1967. "A Merchant Guild of Sixteenth-Century France: The Grocers of Paris," Economic History Review, Economic History Society, vol. 20(3), pages 467-481, December.
    13. Kisch, Herbert, 1989. "From Domestic Manufacture to Industrial Revolution: The Case of the Rhineland Textile Districts," OUP Catalogue, Oxford University Press, number 9780195051117.
    14. Ogilvie, S., 2007. "Can We Rehabilitate the Guilds? A Sceptical Re-Appraisal," Cambridge Working Papers in Economics 0745, Faculty of Economics, University of Cambridge.
    15. Pollard, Sidney, 1997. "Marginal Europe: The Contribution of Marginal Lands since the Middle Ages," OUP Catalogue, Oxford University Press, number 9780198206385.
    16. Boldorf, Marcel, 2009. "Socio-economic institutions and transaction costs: merchant guilds and rural trade in eighteenth-century Lower Silesia," European Review of Economic History, Cambridge University Press, vol. 13(02), pages 173-198, August.
    17. Erik Lindberg, 2009. "Club goods and inefficient institutions: why Danzig and Lübeck failed in the early modern period," Economic History Review, Economic History Society, vol. 62(3), pages 604-628, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bertocchi, Graziella & Bozzano, Monica, 2016. "Women, medieval commerce, and the education gender gap," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 496-521.
    2. Sascha O. Becker & Luigi Pascali, 2019. "Religion, Division of Labor, and Conflict: Anti-semitism in Germany over 600 Years," American Economic Review, American Economic Association, vol. 109(5), pages 1764-1804, May.
    3. repec:kap:revind:v:55:y:2019:i:1:d:10.1007_s11151-019-09711-8 is not listed on IDEAS
    4. Thomas Baudin & Robert Stelter, 2019. "The rural exodus and the rise of Europe," MPIDR Working Papers WP-2019-005, Max Planck Institute for Demographic Research, Rostock, Germany.
    5. Keller, Wolfgang & Shiue, Carol H, 2016. "Market Integration as a Mechanism of Growth," CEPR Discussion Papers 11627, C.E.P.R. Discussion Papers.
    6. Van Bavel, Bas & Ansink, Erik & Van Besouw, Bram, 2017. "Understanding the economics of limited access orders: incentives, organizations and the chronology of developments," Journal of Institutional Economics, Cambridge University Press, vol. 13(01), pages 109-131, March.
    7. Thomas Baudin & Robert Stelter, 2016. "Rural exodus and fertility at the time of industrialization," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2016020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    8. Becker, Sascha O. & Pascali, Luigi, 2016. "Religion, Division of Labor and Conflict: Anti-Semitism in German Regions over 600 Years," CAGE Online Working Paper Series 288, Competitive Advantage in the Global Economy (CAGE).
    9. Guimel Hernández-Garay, 2018. "Consumption of Chinese silk fabrics in Marseille and Seville, 1680 – 1840," Working Papers 18.01, Universidad Pablo de Olavide, Department of Economics, Quantitative Methods and Economic History.
    10. Lenz, Fulko, 2018. "Digitalisierung und Beschäftigung: Ein Ende ohne Arbeit oder Arbeit ohne Ende?," Argumente zur Marktwirtschaft und Politik 141, Stiftung Marktwirtschaft / The Market Economy Foundation, Berlin.
    11. Lergetporer, Philipp & Ruhose, Jens & Simon, Lisa, 2018. "Entry Barriers and the Labor Market Outcomes of Incumbent Workers: Evidence from a Deregulation Reform in the German Crafts Sector," IZA Discussion Papers 11857, Institute of Labor Economics (IZA).
    12. Börner, Lars & Quint, Daniel, 2010. "Medieval matching markets," Discussion Papers 2010/31, Free University Berlin, School of Business & Economics.

    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:28:y:2014:i:4:p:169-92. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.