A guild is similar to a trade association: people who make money doing a similar trade or craft band together to improve their skills, enhance protection for their work and generally make their businesses better and more profitable. During their peak in the Medieval Time Period, merchant guilds offered much more than just professional contacts–they became powerful clubs that gave their members influence and security. Want to learn about the booming business of Medieval merchant guilds? Read on.
Importance of Merchant Guilds
Guilds helped the merchant class gain power during the medieval period. This is important because, before this, only aristocrats and nobles had political power. As guilds grew in importance and took over as the political class, they began to exercise some power over nobles. While they started out small, they gained power and influence throughout the Middle Ages. Eventually, they ran the economy in many major European towns and cities.
Merchant Guild: Definition
What is the definition of a Merchant Guild? The roots of the term "guild" are Germanic. The word is a blend of gildi (brotherhood) and gield (payment). The etymology accurately describes its concept: in a guild, its members (or brotherhood) had to pay subscription fees to be subscribed to it. They were groups of traders in Medieval times who banded together to obtain benefits as a collective that they couldn't access if they were working on their own.
A guild was a membership organization of traders who banded together to protect themselves and share resources.
There are two main types of guilds:
- merchant guilds: for people who sold certain goods
- craft guilds: for people who made certain goods
History of Merchant Guilds
Merchant guilds started as cooperative groups created by traders who voluntarily joined. Benefits included negotiating power against lords and landowners, protection from theft, and improved networks and resources. Over several centuries guilds became more powerful and shifted into becoming economic and political institutions in their own right.
Guilds often created their own insignia and jewels, such as the Archer's Guild necklace pictured above. Source: Sam.Donvil, Wikimedia Commons, CC-BY-SA-4.0
Merchant Guilds in the Medieval Time Period
The first guilds were formed throughout Europe around the 11th century. One of the first guilds was formed in the modern-day Netherlands, called the Merchants of Tiel in Gelderland, in 1020. Some of the first guilds throughout Europe contributed to the formation of the University of Bologna in 1088, the University of Oxford in 1096, and the University of Paris in 1150.
Why Were Merchant Guilds Formed?
Merchant guilds provided important protections and resources during feudal times. Under the feudal system, lords could tax their subjects significantly according to their trades. Taxes grew excessive over the years, and individual traders had little power to try to change it. The idea of guilds was born to allow people to collaborate and negotiate with the lords. Together, they were strong enough to fight against the taxes than they were if they operated alone.
Charters and Taxes
After the guilds and the lords reached an agreement on things like taxes, the lord would issue them a charter. The charter provided an official document for the guild's formation in exchange for an annual lump sum payment.
Protection
Additionally, the Middle Ages were a difficult time, especially for merchants. Traders were often attacked while traveling from town to town, or their warehouses were raided. The guild provided them and their goods with protection.
Shield of the Butcher's Guild. Source: Wikimedia Commons, CC0 1.0 Public Domain Dedication.
Structure of Merchant Guilds
In the early stages of the merchant guilds, merchants paid a membership fee to be considered full-fledged members. As time went on and the guilds became more powerful throughout the 14th and 15th centuries, they began requiring that merchants be a member of the guild to do business in that town. The ban on trade by non-members prohibited outside people and poor people who could not afford the membership fee from doing business. Additionally, any members who violated the charter regulations would be heavily fined.
Growth of Merchant Guilds
As the structure of the merchant guild grew throughout Europe, guild leaders became influential members of the political class, and guilds began to provide community services. Guilds sometimes provided structure and administration in towns. They were known for caring for sick members, orphans, and widows. In some towns, the guild leader became the mayor or spokesperson.
Guilds and Social Class
Membership requirements also became stricter. Guild members created their own "bourgeoisie" class and asserted their higher status over those working under them. Instead of allowing anyone to join for a fee, as guild membership became more of a status symbol, it became much more difficult for "regular" people to join the guild. Sometimes they blocked people from entering unless they paid higher fees and practiced favoritism with sons or other male relatives of current members.
They also began taxing craftspeople more heavily to control prices and supply. This led to the creation of craft guilds, which, similar to the merchant guilds, provided protection and a central authority for craftspeople.
Craft & Merchant Guilds
Craft guilds, in particular, instituted stricter requirements around the skills of their members. To become a member, you had to first be an apprentice, then a day worker, and later you could be eligible to submit a "masterpiece" in your craft to receive the designation of "master" and be an official member of the guild.
Guild masters controlled the prices of goods and wages for the workers under them. Even during times of famine or labor shortages, the guilds did not raise wages, which led to some protests and revolts among laborers.
Guilds also required members to own workshops and tools, which prevented the working class from owning their own means of production.
A Guildhall in London. Source: Wikimedia Commons, CC BY 4.0
Women and Merchant Guilds
With few exceptions, strict requirements also excluded women from participating in the guilds. The main exceptions were for widows who had to carry on their deceased husband's trade to provide for themselves. Even then, they were not given access to the same resources or power as male members. While many women did work alongside men in trades, they were not granted guild membership. Some exceptions were the silk guild in Paris and gold spinners in Genoa.
Merchant Guilds Examples
London became one of the most important hubs for guilds during late Medieval times. The livery companies were the wealthiest guilds in the city, and their members often formed the political class and eventually became significant financial institutions. The chief speaker for the guilds became the mayor of London, and other higher-ranking guild officials took on city administration roles as well. In 1411, they created the "Guildhall," a central building where all the guilds could meet to discuss business.
London guilds included the Apothecaries, Barbers, Blacksmiths, Clothworkers, Fishmongers, Maison, Plumbers, Vintners, and Woolworkers. Today, some streets and London are still named after the guilds located there.
This classic Rembrandt painting from 1662 depicted the Draper's Guild in Amsterdam. Source: Wikimedia Commons
Paris also had successful merchant guilds. Water merchants monopolized the Seine and controlled trade quotas. In 1260, four water merchant's guild members were appointed as city magistrates.
The Decline of Merchant Guilds
Over time, several factors led to the decline of the merchant guild economic system and ultimately to the market-based financial system. Many historians argue that by the 16th century, the guilds were a dead weight on the economy, extorting rent fees from laborers without providing any societal good. Throughout the 16th century, merchant guilds in London, Amsterdam, and Hamburg began to decline as they were replaced by financial institutions.
At times, guilds spent more time competing with each other and territorial disputes rather than actually helping members improve their trade.
Critics of Merchant Guilds
Leaders of Enlightenment Age thinking in the 18th century felt guilds were just another type of ruling class.
- Adam Smith popularized the laissez-faire economic theory of free markets. He argued that guilds were imposing their own type of governmental restriction.
- The French Revolution also led to the decline of guilds - France abolished guilds with a decree in 1789 as the citizens revolted against institutions that prevented them from developing their own economic stability.
Historians often debate whether merchant guilds did more good for society than bad. Indeed, they provided an essential service in their early days by protecting working people and preventing lords from exploiting them. But over time, as they gained power and status, they became their own "ruling class" and exploited workers under them.
Merchant Guilds - Key takeaways
- Guilds were created in the 11th century to provide traders with collective powers to negotiate taxes with their lords
- Initially, guilds simply required that members pay a fee
- Many things changed as merchant guilds became more powerful:
- Membership requirements were stricter.
- Fees were much more expensive.
- Being a member of a guild was a sign of social status.
- Guilds provided some social goods like providing aid to widows and orphans.
- Guild leaders often became political leaders in the town.
- Guilds declined in the 17th and 18th centuries as people's ideas about the economy and the rights of common people evolved. The Enlightenment, the growth of financial institutions, and the French Revolution made them more irrelevant in the modern era.
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