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The European Guilds: An Economic Analysis

Author(s):Ogilvie, Sheilagh
Reviewer(s):de Vries, Jan

Published by EH.Net (March 2019)

Sheilagh Ogilvie, The European Guilds: An Economic Analysis. Princeton, NJ: Princeton University Press, 2019. xvi + 645 pp. $40 (hardcover), ISBN: 978-0-691-13754-4.

Reviewed for EH.Net by Jan de Vries, Department of History, University of California at Berkeley.

Europe’s craft guilds have been a topic of interest to scholars for a very long time. When the Classical economists condemned them and the French revolutionaries set about abolishing them everywhere they seized power, Europe’s craft guilds, which had then functioned in nearly all of urban Europe for some eight hundred years, came into bad odor: they became the poster child for ancien régime economic privilege and oppression. Later, institutional economists of the “German Historical School” and many historians came to the defense of the old guild regime. Something that had helped organize economic life for so long, that gave manual workers — some of them — a political voice, and that embodied the “spirit” of an economic epoch deserves to be understood on its own terms.

Over the past century or so economists have become less interested in the “spirit” of economic epochs and most social historians became disabused of any romantic notions they may have nurtured about guild members, who were, after all, petty commodity producers, if not actual capitalists. But the beginning of a new millennium brought with it a renewed appreciative interest in guilds. The new institutionalism cast the guilds’ seemingly self-serving actions in a new light, a light that revealed clever solutions to various forms of market failure, particularly in the realm of technical innovation and human capital formation. The guilds were back: instead of being a disreputable relic of the old regime, they now looked like pathfinders for the great divergence.

Sheilagh Ogilvie, Professor of Economic History at the University of Cambridge, has now written a book that intends to bring this most recent flirtation to an end. The European Guilds is a comprehensive study of craft guilds in Europe as a whole. Its foundation is a database of guild actions drawn primarily from the vast secondary literature on guilds, which mostly focus on individual trades or single towns. Ogilvie’s database is primarily qualitative in character: describing guild policy on a particular issue, such as ordinances defining formal guild power in a town, the observations of an outsider concerning guild behavior, etc. But the database also includes quantitative elements: the number of guilds and their members, the price of guild membership, litigation expenses, license payments, etc. Altogether, her database includes 12,051 quantitative and 5,333 qualitative observations drawn from twenty-three modern European countries beginning with the eleventh century and continuing until the last European guilds were abolished in the late nineteenth century.

The database is the foundation of this study. Every aspect of guild behavior Ogilvie addressed is analyzed on the basis of the relevant database elements. Thus, she has 706 discrete observations concerning guilds and innovation, 4919 observations that address barriers to entry to guild membership, etc. The observations as a whole are fairly well distributed across space and time, although nearly half come from the Low Countries and German-speaking Europe. Ogilvie is attentive to possible over- and under-representation problems, but there remains the problem of the nature of the observations themselves. Some record historical events, others are prescriptive statements (rules, pronouncements), yet others are claims of interested parties. Is there a secure way of converting such a mixture of observations into a conclusive statement of guild behavior? Ogilvie’s approach is to rely on the sheer number of observations available to her and, in most cases, on what she sees as the unambiguous answers her database gives to the questions she puts to it.

For, make no mistake, guilds were, first and last, institutions designed to redistribute resources to their members at the expense of society at large (p. 80). They were employer associations, “steely and implacable” in their seeking after rents (p. 210) that endured for so long because guilds succeeded in sharing enough of their rents with those who held political power to buy their protection (p. 581). That is, guilds were not primarily “private order” institutions that generalized trust, built social capital and enriched civil society. They were what Adam Smith said they were: conspiracies against the public, abetted in their pursuit of private gain by public power.

Ogilvie makes this case systematically. Chapter by chapter, she reviews the collusive ties of guilds to governmental authorities, the barriers to entry erected by guilds, their manipulation of markets, their discriminatory policies regarding women and an array of religious and ethnic groups. With few exceptions, guilds acted to restrict membership, monopolize production, exploit suppliers and hired labor, and exclude women.

Scholars who speak well of guilds usually concede their monopolistic, corporatist character, but point to redeeming virtues: they uphold quality standards, enable investments in human capital via apprenticeship, and even stimulate innovation by providing a non-patent based incentive structure. Certainly the most interesting chapters of the book tackle these themes. Ogilvie’s database arms her with example after example to show that guilds were, after all, irredeemable. Their quality controls served themselves, not consumers; apprenticeship had little to do with guilds (and was hardly necessary to the acquisition of skill in most trades); and innovation was only tolerated by guilds when it served the members’ interests. This last claim may seem like a significant concession, but Ogilvie sees it as one more confirmation of the myopic focus of guild activity.

The many thousands of guilds that existed from about 1100 to at least the 1790s imposed a deadweight loss on the European economies, a loss that continued unabated throughout this long period. But, was this loss large or small? After all, no economic era is without its rent-seeking institutions, corrupt governments and feckless regulators. Is there a profession or industry in the United States that does not seek to maintain entry barriers, define self-serving quality standards, and buy the favor of politicians? Did the rent seeking of the craft guilds exceed the endemic background rent seeking that is, arguably, part of the human condition?

The organization of Ogilvie’s study does not lend itself to providing an answer to this question since she pools her data to generate a group portrait of “The European Guild.” Only in the final chapter of this exhaustive study does she turn to a comparative approach. Were guilds less noxious in some places, or in some branches of industry, than in others? Did the severity of rent seeking correlate with overall economic performance? While Ogilvie does not consider industry differences, she does seek to distinguish broad European zones of strong, average, and weak guilds. Her database reveals the German, Nordic, and Iberian lands to have had the strongest, most objectionable, guilds, while the Low Countries and Britain had the weakest. There, either the state or the town magistrates limited guild power more consistently than elsewhere in Europe.

Ogilvie then compares the GDP estimates available for these European countries and finds that Britain and the Low Countries performed better, overall, than the other regions of Europe. This, she suggests, is the measure of the difference that guild power could make.

This analysis is brief, highly aggregated, dependent on weak data, and, unfortunately, not terribly convincing. Northwestern Europe in the early modern era differed from the rest of Europe in so many dimensions that an assertion that the line of causation should run from weak guilds to faster GDP growth is, at the very least, premature.

The European Guilds is a learned and comprehensive study of an institution that stood at the heart of the European non-agricultural economy for over seven centuries. Its strength is, however, also a weakness. The guild is analyzed at a high level of abstraction, the wealth of detailed examples notwithstanding. This aids in drawing generalizations about guild intentions and behavior; but it limits the examination of the guilds within the larger economies in which they functioned. The final chapter hints at these issues, but it is far less fully developed than the rest of this volume. Instead of closing a debate, Ogilvie has, I believe, reinvigorated one. Her new book will be the necessary starting point for anyone wishing to pursue the matter further.

Jan de Vries is the Sidney Hellman Ehrman Professor of History and Economics, Emeritus, at the University of California at Berkeley. He is the author, among other works, of The Industrious Revolution (Cambridge, 2008) and The Price of Bread: Regulating the Market in the Dutch Republic (Cambridge, 2019).

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Subject(s):Business History
Industry: Manufacturing and Construction
Markets and Institutions
Geographic Area(s):Europe
Time Period(s):Medieval
16th Century
17th Century
18th Century