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(3), 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. Sheilagh Ogilvie, 2008. "Rehabilitating the guilds: a reply," Economic History Review, Economic History Society, vol. 61(1), pages 175-182, February.
    6. Ogilvie, Sheilagh, 2003. "A Bitter Living: Women, Markets, and Social Capital in Early Modern Germany," OUP Catalogue, Oxford University Press, number 9780198205548, November.
    7. Ogilvie,Sheilagh, 2011. "Institutions and European Trade," Cambridge Books, Cambridge University Press, number 9780521764179, December.
    8. de Vries,Jan & van der Woude,Ad, 1997. "The First Modern Economy," Cambridge Books, Cambridge University Press, number 9780521578257, December.
    9. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    10. 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(2), pages 111-145, August.
    11. Ogilvie, Sheilagh & Carus, A.W., 2014. "Institutions and Economic Growth in Historical Perspective," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 403-513, Elsevier.
    12. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521480444, December.
    13. 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(3), pages 383-406, September.
    14. Wallis, Patrick, 2008. "Apprenticeship and Training in Premodern England," The Journal of Economic History, Cambridge University Press, vol. 68(3), pages 832-861, September.
    15. 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.
    16. Ogilvie Sheilagh, 2005. "The Use and Abuse of Trust: Social Capital and its Deployment by Early Modern Guilds," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 46(1), pages 15-52, June.
    17. 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.
    18. Kisch, Herbert, 1989. "From Domestic Manufacture to Industrial Revolution: The Case of the Rhineland Textile Districts," OUP Catalogue, Oxford University Press, number 9780195051117, November.
    19. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    20. Ogilvie, S., 2007. "Can We Rehabilitate the Guilds? A Sceptical Re-Appraisal," Cambridge Working Papers in Economics 0745, Faculty of Economics, University of Cambridge.
    21. Edwards, Jeremy & Ogilvie, Sheilagh, 2012. "What lessons for economic development can we draw from the Champagne fairs?," Explorations in Economic History, Elsevier, vol. 49(2), pages 131-148.
    22. Pollard, Sidney, 1997. "Marginal Europe: The Contribution of Marginal Lands since the Middle Ages," OUP Catalogue, Oxford University Press, number 9780198206385, November.
    23. de Vries,Jan & van der Woude,Ad, 1997. "The First Modern Economy," Cambridge Books, Cambridge University Press, number 9780521570619, December.
    24. Oliver Volckart & Antje Mangels, 1999. "Are the Roots of the Modern Lex Mercatoria Really Medieval?," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 427-450, January.
    25. 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(2), pages 173-198, August.
    26. 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.
    27. Anon, 2002. "The Economy of Influence," Environment and Planning A, , vol. 34(8), pages 1331-1332, August.
    28. Fitzsimmons,Michael P., 2010. "From Artisan to Worker," Cambridge Books, Cambridge University Press, number 9780521193764, December.
    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. Peter J. Stauvermann & Ronald R. Kumar, 2022. "Does more market competition lead to higher income and utility in the long run?," Bulletin of Economic Research, Wiley Blackwell, vol. 74(3), pages 761-782, July.
    2. Bertocchi, Graziella & Bozzano, Monica, 2016. "Women, medieval commerce, and the education gender gap," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 496-521.
    3. Thomas Baudin & Robert Stelter, 2022. "The rural exodus and the rise of Europe," Journal of Economic Growth, Springer, vol. 27(3), pages 365-414, September.
    4. Ronald R. Kumar & Peter J. Stauvermann, 2020. "Economic and Social Sustainability: The Influence of Oligopolies on Inequality and Growth," Sustainability, MDPI, vol. 12(22), pages 1-23, November.
    5. 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.
    6. Wolfgang Keller & Carol H. Shiue, 2020. "Market integration and institutional change," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 251-285, May.
    7. Mario Pagliero, 2019. "Occupational Licensing in the EU: Protecting Consumers or Limiting Competition?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(1), pages 137-153, August.
    8. Becker, Sascha O. & Ferrara, Andreas & Melander, Eric & Pascali, Luigi, 2018. "Wars, Local Political Institutions, and Fiscal Capacity: Evidence from Six Centuries of German History," CAGE Online Working Paper Series 395, Competitive Advantage in the Global Economy (CAGE).
    9. Keller, Wolfgang & Shiue, Carol H, 2016. "Market Integration as a Mechanism of Growth," CEPR Discussion Papers 11627, C.E.P.R. Discussion Papers.
    10. 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(1), pages 109-131, March.
    11. Lukáš Augustin Máslo, 2021. "Guilds and Competition: A Response to Objections of Laissez Faire," International Journal of Social Sciences, European Research Center, vol. 10(2), pages 1-14, September.
    12. David Dolejší, 2022. "Feudal bargain in Prague: The rise, spread, and fall of craft guilds," Rationality and Society, , vol. 34(2), pages 237-267, May.
    13. Thomas Baudin & Robert Stelter, 2016. "Rural exodus and fertility at the time of industrialization," LIDAM Discussion Papers IRES 2016020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    14. Rudolf Cesaretti & José Lobo & Luís M A Bettencourt & Scott G Ortman & Michael E Smith, 2016. "Population-Area Relationship for Medieval European Cities," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-27, October.
    15. 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).
    16. J R Shackleton, 2020. "Worrying about automation and jobs," Economic Affairs, Wiley Blackwell, vol. 40(1), pages 108-118, February.
    17. 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.
    18. 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.
    19. Dohmen, Martin, 2022. "Freedom of enterprise and economic development in the German industrial take-off," European Economic Review, Elsevier, vol. 148(C).
    20. 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).
    21. Becker, Sascha O. & Ferrara, Andreas & Melander, Eric & Pascali, Luigi, 2018. "Wars, Local Political Institutions, and Fiscal Capacity: Evidence from Six Centuries of German History," CAGE Online Working Paper Series 395, Competitive Advantage in the Global Economy (CAGE).
    22. Börner, Lars & Quint, Daniel, 2010. "Medieval matching markets," Discussion Papers 2010/31, Free University Berlin, School of Business & Economics.
    23. Ronald R. Kumar & Peter J. Stauvermann, 2022. "Imperfect Competition, Real Estate Prices and New Stylized Facts," JRFM, MDPI, vol. 15(3), pages 1-17, February.
    24. Lisa Simon, 2019. "Mikroökonometrische Analysen der Determinanten von Individuellem Arbeitsmarkterfolg," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 83.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ogilvie, Sheilagh & Carus, A.W., 2014. "Institutions and Economic Growth in Historical Perspective," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 403-513, Elsevier.
    2. Sheilagh Ogilvie, 2007. "'Whatever Is, Is Right'?, Economic Institutions in Pre-Industrial Europe (Tawney Lecture 2006)," CESifo Working Paper Series 2066, CESifo.
    3. Klein, Alexander & Ogilvie, Sheilagh, 2013. "Occupational Structure in the Czech Lands Under the Second Serfdom," CAGE Online Working Paper Series 176, Competitive Advantage in the Global Economy (CAGE).
    4. Dessí, Roberta & Piccolo, Salvatore, 2016. "Merchant guilds, taxation and social capital," European Economic Review, Elsevier, vol. 83(C), pages 90-110.
    5. David Dolejší, 2022. "Feudal bargain in Prague: The rise, spread, and fall of craft guilds," Rationality and Society, , vol. 34(2), pages 237-267, May.
    6. Ruben Schalk, 2016. "Apprenticeships and craft guilds in the Netherlands, 1600–1900," Working Papers 0080, Utrecht University, Centre for Global Economic History.
    7. Minns, Chris & Wallis, Patrick, 2009. "Rules and reality: quantifying the practice of apprenticeship in early modern Europe," Economic History Working Papers 27865, London School of Economics and Political Science, Department of Economic History.
    8. van Bavel, Bas, 2016. "The Invisible Hand?: How Market Economies have Emerged and Declined Since AD 500," OUP Catalogue, Oxford University Press, number 9780199608133, November.
    9. Corriveau, Louis, 2021. "Technologies, Institutions, development and growth," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 159-164.
    10. Börner, Lars & Quint, Daniel, 2010. "Medieval matching markets," Discussion Papers 2010/31, Free University Berlin, School of Business & Economics.
    11. Loren Brandt & Debin Ma & Thomas G. Rawski, 2014. "From Divergence to Convergence: Reevaluating the History behind China's Economic Boom," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 45-123, March.
    12. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    13. Boerner, Lars, 2016. "Medieval market making brokerage regulations in Central Western Europe, ca. 1250-1700," Economic History Working Papers 66834, London School of Economics and Political Science, Department of Economic History.
    14. Klaus Desmet & Avner Greif & Stephen L. Parente, 2020. "Spatial competition, innovation and institutions: the Industrial Revolution and the Great Divergence," Journal of Economic Growth, Springer, vol. 25(1), pages 1-35, March.
    15. 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.
    16. Andrianova, Svetlana & Demetriades, Panicos & Xu, Chenggang, 2011. "Political Economy Origins of Financial Markets in Europe and Asia," World Development, Elsevier, vol. 39(5), pages 686-699, May.
    17. Daron Acemoglu & Davide Cantoni & Simon Johnson & James A. Robinson, 2011. "The Consequences of Radical Reform: The French Revolution," American Economic Review, American Economic Association, vol. 101(7), pages 3286-3307, December.
    18. Fabian Wahl, 2014. "Origins of Political Change Ñ The Case of Late Medieval Guild Revolts," Working Papers 0069, European Historical Economics Society (EHES).
    19. Drelichman, Mauricio, 2009. "License to till: The privileges of the Spanish Mesta as a case of second-best institutions," Explorations in Economic History, Elsevier, vol. 46(2), pages 220-240, April.
    20. Wolfgang Keller & Carol H. Shiue, 2016. "Market Integration as a Mechanism of Growth," CESifo Working Paper Series 6070, CESifo.

    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: . General contact details of provider: https://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 bibliographic 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.

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

    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.