mises.org/wire/problem-guilds-theyre-monopolistic-and-wasteful

Economists have illuminated our understanding of guilds in medieval Europe, but we still know rather little about their functions in other parts of the world, especially Africa. In the West, the approach has been to question the relevance of guilds as a platform to accentuate economic growth. In economic literature, most agree that guilds inhibited growth in medieval Europe; however, this idea is rebuked in the text Guilds, Innovation, and the European Economy, 1400–1800, edited by Stephen Epstein and Maarten Prak. This volume attacks the assertion that guilds operated primarily as rent-seeking institutions responsible for halting the pace of economic growth.

Instead, the authors reply that they were instrumental in facilitating the acquisition of skills and diffusion of technology. Despite the admission that under select circumstances guilds opposed innovation, the conclusion is that this argument has been exaggerated. Yet, Sheilagh Ogilvie in her meticulously researched tome European Guilds: An Economic Analysis punctures the assumption that guilds served a laudatory function. Ogilvie portrays guilds as political institutions that instituted occupational barriers, thereby limiting some professions to guild members.

Ogilvie’s findings complement prior research arguing that guilds discriminated against women, Jews, poor men, and immigrants. Contrary to the revisionist literate depicting guilds as enablers of competition, Ogilvie points out that they regulated markets by bestowing members with exclusive rights to engage in economic production in a specified location. Such perks entailed monopoly rights over producing particular products; for instance, merchant guilds would provide members with exclusive trading rights to procure particular wares, whereas a weavers’ guild could bar nonmembers from selling fabrics to consumers and merchants.

Working in tandem with political elites, guilds were frequently insulated from competition. Monarchs...

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