Guilds

The Syndics of the Drapers' Guild past times Rembrandt, 1662.

I enjoyed Sheilagh Ogilvie's The Economics of Guilds in the latest Journal of Economic Perspectives. Bottom line:

..the behaviour of guilds tin best live understood every bit beingness aimed at securing rents for lodge members; guilds so transferred a part of these rents to political elites inwards render for granting together with enforcing the legal privileges that enabled guilds to engage inwards rent extraction. 

The newspaper nicely plant through all the criterion pro-guild together with pro-regulation arguments. If you lot but supervene upon "Guild" amongst "regulatory agency" it sounds pretty fresh.

Did guilds supply contract enforcement, safety inwards weak states, belongings correct protections non otherwise available? No.

Overall, the empirical findings propose that impersonal telephone commutation inwards medieval together with early on modern Europe was sustained non past times particularized arrangements such every bit lodge jurisdictions or interguild reprisals, but past times generalized institutions: private trouble organisation practices backed upwards past times public-order municipal or province institutions, which were opened upwards to all traders, non but members of privileged guilds.

Did guilds improve quality, protecting the unwary consumer?

..guilds typically penalized their members’ character violations likewise mildly to deter them (Homer 2002; Forbes 2002; Ogilvie 2005). Customers oft described lodge character controls every bit inadequate, together with wholesale merchants added their ain character inspections at betoken of purchase. As i High German lodge inspector declared inwards 1660, “the cloth-sealing takes house really badly, together with when i says anything virtually it, i incurs slap-up enmity” (as quoted inwards Ogilvie 2004a, p. 295). Guild inspectors lacked the incentive to develop the skills together with deploy the essay necessary to honor low-quality function beyond superficial features (such every bit size), which were readily apparent to wholesale merchants together with consumers anyway (Ogilvie 2005; Boldorf 2009)...

Guilds were for sure oft active inwards regulating quality. But in that place is piffling empirical back upwards for the thought that they were efficient institutions for solving data asymmetries betwixt producers together with consumers.

Uber stars vs. taxicab regulators, circa 1350.

Did guilds supply improve preparation together with certification?

While arts and crafts guilds oft made apprenticeship together with journeymanship compulsory— at to the lowest degree on paper—the extent of actual preparation sheds bleak low-cal on the incentives of monopolistic professional person associations amongst reckon to human upper-case alphabetic character investment. Contemporaries oft complained that guilds failed to penalize neglectful masters of apprentices, issued certificates to apprentices without examination, or granted mastership without preparation or exam to masters’ relatives together with well-off youths who paid for “privileges” (La Force 1965; Kaplan 1981; Horn 2006).

Black-market “interlopers” who failed to obtain lodge training—often, every bit inwards the illustration of women together with Jews, because guilds excluded them—were vigorously opposed past times guilds exactly because they had skills indistinguishable from those of lodge members together with were willingly hired past times customers (Wiesner 2000; Ogilvie 2003, 2004b, 2007a; Hafter 2007; van den Heuvel 2007).

Influenza A virus subtype H5N1 skilful reminder that modern union's behaviour - quick exclusion of minorities for illustration -- goes dorsum a long way.

Technology? Did guilds, every bit professional person organizations, aid to spread data virtually novel techniques?

How did guilds impact technological innovation? The most visible way inwards which guilds interacted amongst novel techniques was when, every bit oft happened, they opposed them. Many lodge members thought in that place was a express lump of task to instruct around. Innovations that squeezed to a greater extent than output from existing inputs would alluvion markets  depress prices, together with seat lodge masters out of work. As i fourteenth-century Catalan intellectual seat it, “If a shoemaker comes along amongst novel tools together with makes lxx shoes inwards a twenty-four lx minutes menstruum where others build 20 . . . that would live the ruin of 100 or 200 shoemakers.”

Influenza A virus subtype H5N1 lot of 20th century economists, commentators, politicians together with "policy-makers" plainly believe the same thing.

Continuing,

Leiden distinguished itself from other cities past times limiting or altogether banning textile guilds, even so its flourishing industries were at the forefront of technological innovation, introducing hundreds of novel fabrics together with a vast array of innovative methods together with devices betwixt 1580 together with 1797 (Ogilvie 2007a; Davids 2008; Lis together with Soly 2008). Within England, the mechanical innovations of the Industrial Revolution were introduced non inwards the guilded “borough” towns but inwards fast-growing centers such every bit Birmingham, Manchester, Leeds, Halifax, Sheffield, together with Wolverhampton, which had no guilds (Clark together with Slack 1976; Coleman 1977; Pollard 1997). 

Why did guilds move out?  Early inwards the paper, Ogilvie mentions contest from the unguilded countryside together with abroad.  "Globalization" together with contest do their work.  In the terminal section,

... electrical flow scholarship suggests a complex of factors that created a novel equilibrium inwards which both the political authorities together with the owners of industrial together with commercial businesses gradually discovered they could do improve for themselves past times departing from the particularist path together with outset to role to a greater extent than generalized institutional mechanisms. These factors included stronger representative institutions (parliaments) that increasingly constrained how rulers could heighten revenues together with grant privileges to special interest-groups; a to a greater extent than highly diversified urban scheme inwards which towns did non deed inwards concert, but rather competed together with express each other’s mightiness to secure privileges from the populace authorities; a to a greater extent than variegated social construction including prosperous, articulate, together with politically influential individuals who wanted to do merchandise together with manufacture together with objected to its beingness monopolized past times members of exclusive organizations; together with governments that gradually made taxation to a greater extent than generalized together with developed markets for populace borrowing, reducing the attractiveness of short-term financial expedients such every bit selling privileges to special-interest groups (de Vries 1976; Lindberg 2008, 2010; Mokyr 2009; Ogilvie 2011; Gelderblom 2013; Ogilvie together with Carus 2014).

Influenza A virus subtype H5N1 prissy ending

The historical findings on guilds thence supply potent back upwards for the stance that institutions arise together with live for centuries non because they are efficient but because they serve the distributional interests of powerful groups. 

The merchandise of competition-stifling regulation for political back upwards continues. The enquiry is how many centuries volition it receive got now, together with what similar political together with economical forces volition undermine it.

Update:

In this (Nov 18) morning's Cato News Summary,

 According to a front-page analysis from Robert Pear of the New York Times (11/18, A1, Subscription Publication, 9.9M), titled “Health Law Turns Obama And Insurers Into Allies,” Obama “is depending to a greater extent than than always on the insurance companies that 5 years agone he defendant of padding profits together with canceling coverage for the sick.” Pear says that since the passage of the Affordable Care Act, “the human relationship betwixt the Obama direction together with insurers has evolved into a powerful, mutually beneficial partnership that has been a boon to the nation’s largest private wellness plans together with led to a profitable surge inwards their Medicaid enrollment.”