Decline of the Guilds

Since the Urban Revolution of the 12th/13th century, crafts in the cities were organized in guilds. These guilds had privileges excluding outside competition within their city and within a certain area around their city. The guilds maintained quality standards, and, by the means of examinations, i.e. permissions of master craftsmen to take over or open a workshop in town, regulated the competition, by making sure that ruinous competition was avoided. Another instrument to regulatye competition was the distribution of raw material, f.i. leather, by the shoemakers' guild. Since the Black Death of the mid 14th century, the urban guild economy had been largely stagnant.
The guild economy was based on individual workshops, family-size enterprises where a master craftsman employed a few apprentices and journeymen. Production was primarily based on manual power; water- and windmills could be used as additional energy sources; the number of workers per enterprise, and, often, the available raw materials were limited. The individual enterprise thus operated within limitations; the guild system assumed a rather stagnating economy; the guild was to safeguard the economic security of the individual workshop, but did not foresee growth of her market share.

During the Urban Revolution the miners moved into the mountain regions, and cities were founded where miners established themselves. Industries which depended on water power moved into the river and creek valleys, where this energy source could be tapped; during the 17th and 18th century this was increasingly the case.
In the 16th to 18th century, the urban guild economy faced an increasing capitalist competition - entrepreneurs investing in larger enterprises on the scale of manufactures or tapping into hitherto unexploited labour resources by putting out work to the countryside (textile industry). These new, capitalist enterprises, were not limited by guild privileges (although manufactures, watermills often required a permission by the landowner/ruler), strove to secure a large market share.
Within the urban guild economy, the textile industry occupied a central position. Within the scope of larger-scale enterprises, innovations paid off significantly. The early innovations of the Industrial Revolution, in the textile industry, all were implemented in factories - in essence in manufactures where innovations reduced the dependence on manpower and thus caused the change in terminology.
The manufacture/factory also permitted enterprises to open up new fields of production.

In the 17th century, mercantilist policies (France, Prussia, Austria) still, to a certain extent, favoured the guilds. In the 18th century, Mercantilis, failed to supply the states with the amount of additional revenue the latter hoped for; the state therefore was less interested in protecting the guilds.

Guilds, from Hans Christian Andersen Glossary

This page is part of World History at KMLA
First posted on September 21st 2003, last revised on November 14th 2004

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