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Guilds, Innovation and the European Economy, 1400-1800

Author(s):Epstein, S. R.
Prak, Maarten
Reviewer(s):MacLeod, Christine

Published by EH.NET (December 2008)

S. R. Epstein and Maarten Prak, editors, Guilds, Innovation and the European Economy, 1400-1800. Cambridge: Cambridge University Press, 2008. viii + 352 pp. $99 (cloth), ISBN: 978-0-521-88717-5.

Reviewed for EH.NET by Christine MacLeod, School of Humanities, University of Bristol.

Until recently, Adam Smith?s condemnation of craft guilds as ?a conspiracy against the public? has implied that the juxtaposition of ?guilds? and ?innovation? is an oxymoron. That this no longer so is thanks to three decades of lively revisionist scholarship, which has seen guilds rehabilitated as significant political and cultural institutions, especially by historians of pre-revolutionary France. Economic historians, however, with one or two exceptions ? one thinks especially of R. W. Unger?s Dutch Shipbuilding before 1800 (Assen, 1978) ? have been slow to relinquish the stereotype of moribund rent-seekers whose habitual reaction to technical innovation was resistance and rejection. Yet, a fruitful debate has now been joined, with the revisionist camp ably represented here, not least by S. R. (Larry) Epstein, whose untimely death occurred during the preparation of this volume. Their claim is a bold one: ?that the impact of [craft] guilds on the early modern economy was more positive than has so far been acknowledged by historians of the traditional, and even of the revisionist, school? (p. 23). As several contributors explicitly recognize, they have an arch-critic in Sheilagh Ogilvie, whose important work on early modern Germany challenges the natural tendency of revisionists to over-compensate, reminding us in particular of the guilds? economically inefficient patriarchal, hierarchical and anti-Semitic exclusivity. With that in mind, let us examine the case for the defense.

First, six comparative syntheses of research (including Epstein and Prak?s lucid introduction) emphasize different aspects of the craft guilds? economic function and role in innovation. Ulrich Pfister?s contribution is divided between two chapters, the first of which has relatively little to say about technical innovation, but offers an enlightening exploration of craft guilds through the modern theory of the firm. His argument, that ?craft guilds and firms were functional substitutes? (p. 50), rests on a demonstration of the guilds? firm-like behavior in delegated monitoring and vertical integration, both of which reduced their members? agency costs. Focusing on the entrepreneurial activities of master artisans engaged in the export trades, Catharina Lys and Hugo Soly explore the development of subcontracting amongst them and compare it (not unfavorably) with proto-industrialization. Reith Reinhold condenses an extensive body of research, most of it previously only available in German, on the circulation of skilled labor through central Europe since the fourteenth century. Not only does he emphasize migrant artisans? role as the principal conduit of technological diffusion, especially of ?tacit? knowledge, but he also shows how ?tramping? acquired an important function in the acquisition of skills and completion of a journeyman?s training, to the point where some guilds began to insist on it.

A further six contributions investigate individual cities and/or crafts: London commands the lion?s share, justified by the conventional belief that its guilds, being incompatible with industrialization, were the first to disappear. This justification is dismantled implicitly throughout but explicitly by Ian Anders Gadd?s and Patrick Wallis? demonstration of how four metropolitan guilds succeeded in establishing nationwide jurisdictions in the period 1500-1700 (without the harmful effects that Ogilvie has identified elsewhere), and by Michael Berlin?s analysis of the varying fortunes of London?s guilds through to their legal termination in 1837: ?far from experiencing a long ?natural? decline, the regulatory mechanisms of many of the companies were abrogated as a result of historical conjunctions and circumstances unique to each trade? (p. 337). Anthony Turner compares the various ways in which the novel trades of horology and instrument making were absorbed into early modern Europe?s corporate structure and highlights their generally positive attitudes towards technical innovation. Guilds? hostility to patents, which they opposed as restraints on trade, stood in sharp contrast to the ferment of ?collective invention? that placed these crafts among the most technically dynamic. Similarly, Francesca Trivellato?s exposition of how Venice?s silk and glass trades adapted to innovation downplays the significance of patents in this, their legislative ?home? (Venice enacted Europe?s first patent law in 1474). Instead, she highlights the importance in glassmaking of private recipe books, which were ?so precious that they were included in women?s dowries? (p. 224n), as both revealing of constant product innovation and intra-guild competitiveness. Perhaps most surprising of all, we find seventeenth-century Dutch artists clamoring to be organized into guilds. Yet, as Maarten Prak suggests, Holland?s booming art market could only be supplied through large increases in productivity, implying extensive specialization and division of labor, such that ?painters had to get used to working for a market that was not fundamentally different from the market for wine or furniture? (p. 150). Painters? guilds offered their members expanded facilities, including corporate salesrooms where the pricing of such hard-to-value products could be publicly determined and events for the discreet education of newly rich customers.

Three contributions stand out for their particular concern to specify the links between guilds and innovation. Epstein?s, reprinted from the Journal of Economic History (1998), contends that the craft guilds? primary function was to police the transmission of skills via the regulation of apprenticeship, thereby sharing out ?the unattributed costs and benefits of training among its members? (p. 56). Adam Smith?s mistaken belief that apprenticeship?s purpose was rather to defend a labor-market monopsony, argues Epstein, stemmed from his undervaluing the difficulty and cost of transmitting skill, especially its ?tacit? component which could only be taught through personal demonstration and repeated practice; simultaneously, the apprentice learned his master?s trade secrets. From the resulting high investment in human capital flowed three unintended but systematic boosts to innovation: ?by establishing a favourable environment for technical change; by promoting technical specialisation through training and technical recombination through artisan mobility; and by providing inventors with monopoly rents? (p. 73). Such incremental innovation via quotidian problem-solving was of infinitely greater significance, Epstein suggests, than the more visible cases of guilds overtly resisting labor-saving machinery.

The ironic implication of Epstein?s argument for Liliane P?rez?s study of pre-revolutionary Lyon is the guilds? own ignorance of this involuntary progress. For, while most contributors offer examples of guilds passively accepting product innovations and even new processes provided they were labor- or skill-intensive, P?rez shows the Grande Fabrique (Lyon?s powerful silk guild) taking great pains to actively promote and disseminate them. French guilds generally were in tune with the ?enlightened? state?s policy of promoting innovation through offering financial incentives. Yet, Lyon was demonstrably ?the most technologically innovative city in France? (p. 242). In its quest to forestall secrecy and private appropriations of knowledge, the Grande Fabrique mobilized various local institutions to validate inventions and assess appropriate levels of reward; it instituted a public repository of models; and it paid bonuses in proportion to the number of new devices sold to Lyon weavers. Ultimately, however, such interventionism proved not merely unnecessary but possibly counter-productive: P?rez points to the bitter contests over priority and ?unfair? reward that erupted.

Pfister?s second chapter takes the bull of innovation by the horns, investigating the checkered career of the engine loom for weaving silk ribbons. Although the labor-saving engine loom was predictably resisted by most guilds, Pfister?s analysis demonstrates that this was neither universal ? it depended on local economic and institutional contexts ? nor without other implications for the organization of labor, such as cutting costs to compete with mechanization through the increased employment of women (as Trivellato shows happening in Italy).

What emerges from this exceptionally coherent volume is not only the complexity of this institution, whose history spans more than half a millennium and a myriad of particular trades and local circumstances, but also the persistent tensions to which it was subjected, both internally from individualistic and capitalist challenges to its collective ethos and externally from the exigencies of nation states. Moreover, it adds another spur to the demanding search for innovation in the workshop and on the construction site, rather than in the too easily accessed and counted records of the patent office.

Christine MacLeod is Professor of History at the University of Bristol and author of Heroes of Invention: Technology, Liberalism and British Identity, 1750-1914 (Cambridge University Press, 2007).

Subject(s):Markets and Institutions
Geographic Area(s):Europe
Time Period(s):Medieval