The Origin of Guilds

In my previous post, I wanted to “set the stage” as to why it was Northwestern Europe, and not the many other locations around the world where complex civilizations developed, that formed the basis of the modern world. From this corner of the world sprang the impersonal markets and financial institutions that became the cornerstones of the modern world—institutions expressly designed for the plundering of resources from Africa, Asia, and the Americas by Western Europeans–the “Mongols of the Sea.”

But first we’re going take a short detour into the history of guilds.

Most people are aware of the basics of the guild system: practitioners of skilled trades in the Middle Ages were members of a guild which trained the members of said profession, regulated the working hours and conditions, and determined quality standards for production. In addition, members pooled their resources and took care of members who were unable to work, or the widows and orphans of members who had died. These were the Craft Guilds. Wikipedia describes them as, “…organized in a manner something between a professional association, a trade union, a cartel, and a secret society.”

However, guilds were not just craftsmen, but also merchants. Merchant guilds policed themselves and highly regulated business and trade in the Middle Ages. Buying and selling was tightly regulated by the merchant guilds, in accord with the charters granted to them by city officials, throughout the Middle Ages. Thus we see that unregulated commercial activity and “free trade” was not the historical norm by any means, but, rather, is a relatively recent development in human society.

Two other lesser known types of guilds were religious guilds, or confraternities; and frith (defensive) guilds, or mutual protection associations–perhaps something on the order of what we might call a “militia” today.

In tracing [the] history [of the guilds] we find the merchant guilds, the prototypes of the modern corporations; the religious guilds, the prototypes of modern church societies; the social guilds, the prototypes of Masonic, Odd Fellow and kindred organizations; the craft guild, the predecessor of the modern trades-unions; and finally, guilds of lawyers, and guilds of litterateurs and artists. [1]

We can consider guilds, then, as a form of risk-pooling, a uniquely human endeavor which has been going on probably since at least the Ice Age, and certainly as far as 12,000 years ago as evidenced by religious/feasting events at Göbekli Tepe, and later, at Stonehenge. As we learned in our study of the feasting theory, feasting and food-sharing appears to be inherent in the human species, and it likely enhanced cooperation among social groups allowing the formation of complex societies. Feasting events may have contributed to the formation of classes and inequality out of smaller, egalitarian band-level societies.

…Yet it is…evident that the sentiment of the Guild–that is, the desire to establish fraternal relations for mutual aid and protection…may rather be contemplated as a human sentiment, arising from the innate knowledge of his own condition, which makes man aware of his infirmity and weakness in isolation, and causes him to seek for strength in association with his fellow man.

The similitude, therefore, if not the exact form of the Guild, has appeared in almost all civilized nations, even at the remotest periods of their own history. Wherever men accustom themselves to meet on stated occasions, to celebrate some appointed anniversary or festival and to partake of a common meal, that by this regular communion a spirit of fraternity may be established, and every member may feel that upon the association with which he is thus united he may depend for relief of his necessities of protection of his interests, such an association, sodality, or confraternity, call it by whatever name you may, will be in substantial nature a guild. [2]

Let’s take a look at the history and anthropology behind such cooperative groups.

The first thing to understand about the ancient world, broadly speaking, is that there was no such thing as “the lone individual” or “individualism.” Everyone was defined by membership in a corporate group of some sort; the consanguineous family or tribe if nothing else. To not be a member of some sort of larger social group—i.e. an outcast—was a virtual death sentence. For most of human history, the lone individual was a dead individual. No doubt some people managed an existence on the margins of  society, but these were the exceptions. No example of a society of “lone individuals” has ever been found by anthropologists. Rather, pre-state societies were held together by their reckoned descent from a common ancestor, and often times the veneration of those ancestors. This has been a universal phenomenon known to anthropologists since the late Nineteenth century.

It was the interaction of these various social groups that formed the basis of society. Ancient laws were designed to facilitate interactions and mediate disputes between various groups, NOT to enforce contracts between individuals. Formal contracts between individuals did not exist (nor were they needed); rather your social behavior towards others was dictated primarily by kinship (actual or fictive)—father to son, wife to husband, uncle to nephew; cousin to cousin; slave to master; patron to client, and so on. Private and public interactions were mediated by social status—people knew what to expect of one another based on their relative social position. As people agglomerated in ever-larger groups due to population growth, eventually laws and behaviors needed to become more formalized by the rulers.

Originally, ancient laws were oral codes, but over time they increasingly came to be written down. They weren’t designed to facilitate dealings between solitary individuals , because, as we said, there was no such thing as “the lone individual”—everyone was associated with their social group and was seen by society as a representative of said group. Besides, there was no way to enforce the word of a truly solitary individual—he or she (usually he) would be regarded with suspicion, and, besides, no one would be able to “vouch” for them or make amends should they welsh on a deal. I plan to take this up in much more depth in future posts, but for now, this quotation should give us a good illustration of the concept:

In his [book] Early Institutions [Henry S. Maine] subjects the Brehon Laws of early Ireland to a suggestive examination as presenting an example of Celtic law largely unaffected by Roman influences. He there shows, as he has shown in Ancient Law, that in early times the only social brotherhood recognised was that of kinship, and that almost every form of social organisation, tribe, guild, and religious fraternity, was conceived of under a similitude of it. Feudalism converted the village community, based on a real or assumed consanguinity of its members, into the fief in which the relations of tenant and lord were those of contract, while those of the unfree tenant rested on status. [3]

Tribe, guild and religious fraternity were conceived in a similitude of the family. This is an essential point, and crucial to our understanding ancient society. It also feels odd to our modern Western sensibilities where each of us by default has no relationship whatsoever to absolutely anyone else outside of our immediate family—our biological parents and siblings—and sometimes not even with them! That is, we are all “lone individuals.” Most of our relationships are  all voluntary contracts, with terms explicitly spelled out in writing, and can be terminated by either party at any time. The ancient world was not like this.

Put succinctly, the “natural” basic unit of human society is not the lone individual, but the descent group—people who trace their descent to a distant common ancestor, even if such descent is largely fictitious. Thus, all early institutions were, more or less, a simulacrum of the family unit. The interaction of these various groups formed the basis of all political and social life. Food sharing and ritual behaviors tap into kin psychology to create larger groups than the consanguineous extended family.

So it follows that the earliest guilds were based on the family structure as the German historian Lujo Brenanto—one of the first to study the history of guilds—wrote (he uses the more accurate word Gild):

The family appears as the first Gild, or at least of the archetype of the gilds. Originally, its providing care satisfies all existing wants; and for other societies there is therefore no room. As soon however as wants arise which the family can no longer satisfy—whether on account of their peculiar nature or in consequence of their increase, or because its own activity grows feeble—closer artificial alliances immediately spring forth to provide of them, in so far as the State does not do it.

Infinitely varied as are the wants which call them forth, so are naturally the objects of these alliances. Yet the basis on which they all rest is the same: all are unions between man and man, not mere association of capital like our modern societies and companies. The cement which holds their members together is the feeling of solidarity, the esteem for each other was men, the honour and virtue of the associates and the faith in them–not an arithmetical rule of probabilities, indifferent to all good and bad personal qualities.

The support which the community affords a member is adjusted according to his wants–not according to his money stake, or to a jealous debtor and creditor account; and in like manner the contributions of the members vary according to the wants of the society, and it therefore never incurs the danger of bankruptcy, for it possesses an inexhaustible reserve fund in the infinitely elastic productive power of its members.

In short, whatever and however diverse may be their aims, the Gilds take over from the family the spirit which held it together and guided it: they are its faithful image, though only for special and definite objects.

The first societies formed on these principle were the sacrificial unions, from which, later on, the Religious Gilds were developed for association in prayer and good works. Then as soon as the family could no longer satisfy the need for legal protection, unions of artificial-family members {sic} were formed for this purpose, as the State was not able to afford the needful help in this respect. These Gilds had their origin in direct imitation of the family. Most certainly, none were developed from an earlier religious union: as little as were the Roman collegia opificum from the Roman sacrificial societies, or the Craft-Gilds from the Gild-Merchants, or any Trade-Unions from a Craft-Guild. [4]

Ancient institutions, including the extended family itself, were held together by common worship, typically involving some sort of ritual. The French historian Fustel de Coulanges argued that the primary Roman descent group–the gens–was held together by ancestral worship. It controlled its own ancestral lands, it had its own burial grounds, had its own deities and rituals (Sacra), and all property of a deceased person was partitioned out among all surviving members of the gens (rather than inherited by the eldest male offspring). Gentes were sort of a society in miniature, composed of related individuals, and their interactions were the basis of the wider society. Coulanges then went on to make the case that the entire Ancient City was sort of a superfamily based around similar communal rituals and worship, in this case the worship of a municipal deity (such as Pallas Athena at Athens, or Jupiter at Rome).

One thing appears to be universal among all of these early corporate groups (gens, sodalites, collegium, eranoi, etc.): the sharing together of a common meal. We see this has a very old pedigree indeed—it probably developed out of feasting rituals that hearken back to the very origins of civilization. The custom of assembling together at a common ceremonial banquet on various solemn occasions appears to be universal, and anthropologists have found much evidence of it at all stages of social development. Chimpanzees share meat from the hunt. The secretion of cholecystokinin (CCK) from a fat and protein-heavy rich meal induces feelings of satiety and allows for social bonding, as does alcohol consumption.

Undoutedly the collegia and sodales [sic]–Roman or Romanized institutions–founded themselves on the common meal, which was so sacred and significant a symbol in all the relations of the Aryan household. The functions of worship which the house-father (the Roman gentile head) could alone administer, the sacra, had passed into keeping of priest and church. When the sodalitates were instituted, they took to themselves the social power, perhaps we should say the socio-religious sympathy of the common meal. [6]

The second universal feature is the payment of some sort of communal dues. The world Guild itself comes from the Anglo-Saxon word gildan, meaning to pay, from which derives the word gegilda, meaning the subscribing member of a guild. [7] This allows risk pooling while minimizing the risks of free-riding, which is always a concern for collective action. Thus, guilds would have tapped into kin psychology by using their own communal banquets, rituals, and status relationships.

As labor became more specialized, especially in cities, one of the earliest class-based associations to form were occupational. In fact, groups of specialists, often associated with some sort of religious institution, look to be the core basis underlying the formation of early proto-cities. We know that specialized occupations, including merchants, had their own unique quarters in these ancient proto-cities. Thus, it makes sense that the complex and highly specialized world of ancient Mesopotamia, with its weavers, bakers, goldsmiths, builders—and, of course, merchants—was the first place on earth for large urban agglomerations to form.

Ancient Guilds

Did guilds exist in ancient Mesopotamia? Opinions differ, but it appears certain that practitioners of various specialized occupations did indeed associate together in some sort of formal—perhaps religious—structure. They may have shared meals and had their own rituals. But these differed greatly from later guilds in several regards.

First, there was no attempt to prevent people outside the guild from participating in various occupations. Second, there appears to have been no formal attempt to regulate workmanship or working conditions. In other words, the cartel-like activities of later guild systems were not present. There may have been some sort of insurance or risk-pooling; it’s hard to tell. One thing is certain, however,—guilds originated in the cities where specialized labor, long-distance trade, and raw materials were present:

Throughout the history of Mesopotamia, the skilled craftsmen had a distinct and prominent position in society…Their distinct status is especially clear in the first millennium, when we find clear evidence for craftsmen’s quarters in various cities (183)… It is thus logical that they would feel an affinity for their colleagues, and that they would form professional associations. From the early second millennium onward such organizations are attested to in the texts. It has been stated that these groups depended on the palace or the temples because they were headed by an overseer, but this common and broad title can also indicate that one of the members was selected to represent the group in its interactions with the government authorities…

The strength and cohesion of these associations is hard to define. They have been called ‘guilds’ by a minority of scholars, usually under severe criticism. In a sense, the issue whether or not it is appropriate to use that designation boils down to one of terminology, and to what one has in mind when talking about guilds. Many of the characteristics of a medieval European guild cannot be documented in Mesopotamia, including the crucial element that only guild members could perform a particular craft. But their absence also cannot be proved, and I think we should not underestimate the power of these professional associations. [8]

As mentioned above, most social organizations were based within the family: thus ancient private businesses were wholly synonymous with various Houses—that is—kin groups. Two of the most famous were the House of Egibi and the House of Murashu, whose archives have been found and studied by archaeologists. These entrepreneurial families would send relatives throughout the civilized world to run various outposts of the family business, since one can theoretically trust one’s own family members (and not outsiders). The wealth of the House was collectively owned, and collectively passed down inside the family.

Thus, we see that ancient business dealings were conducted mainly by “reputation mechanisms” and furthermore, the reputation in question was typically never that of a lone individual, but of a corporate group; a corporate group in which all the members agreed to take collective responsibility for the actions and obligations of any one of its members. Thus, entrance into any such group was heavily policed by reputation, and disreputable members could be ejected by the will of the majority (since everyone was liable for that person’s actions). This allowed transactions based on trust to take place before the advent of formal corporations, written contracts, business law, or governmental institutions.

Ancient Greece

Ancient Greece appears to have been driven by bonded/unfree labor in the from of slaves and immigrant labor (metics). Guilds were less important. However, even here we do see mutual aid societies centered around communal dues, food sharing, and common rituals, even without an explicit focus on occupation:

The Eranos among the Greeks was in every minute respect the analogue of the Guild…Clubs or societies of this kind established for charitable or convivial purposes, and sometimes for both, were very common at Athens, and were also found in other cities of Greece. These Grecian Guilds were founded on the principle of mutual relief. If a member was reduced to poverty, or was in temporary distress for money, he applied to the Eranos, or Guild. and the relief required was contributed by the members. Sometimes it was considered as a loan, to be repaid when the borrower was in better circumstances.

The Eranos met at stated periods, generally once a month, had its peculiar regulations, was presided over by an officer styled the Eramarches, and the Eranistoi, or members, paid each each a monthly contribution. There does not really appear to have been any material difference between the organization of these sodalities and the Saxon and mediaeval social Guilds. [9]

Ancient Rome

We are on somewhat firmer ground when it comes to the ancient Roman world. There were several major social groups in ancient Roman society that we know of. One early form of group was the solidates, and these appear to have began as ritual cults, often of priests (Flamen), or as common burial societies.  Another type of organization was the collegia, which was any association of individuals, not necessarily for religious or cult purposes. A third category was socialies, which were basically business partnerships for some definite purpose designed to be temporary in nature.

In ancient Rome, the principle of private association was recognized very early by the state…It can be difficult to distinguish between the two words collegium and sodalitas. Collegium is the wider of the two in meaning, and may be used for associations of all kinds, public and private, while sodalitas is more especially a union for the purpose of maintaining a cult. Both words indicate the permanence of the object undertaken by the association, while a societas is a temporary combination without strictly permanent duties.

The Collegia was the basis of the collegia opificum, or trade associations, during the Roman Empire. There were nine major categories of trade association that were sanctioned by the Roman government. This is the origin of our modern word college, which was originally a guild of students in the High Middle Ages: “An important result of the guild framework was the emergence of universities at Bologna (established in 1088), Oxford (at least since 1096) and Paris (c. 1150); they originated as guilds of students (as at Bologna) or of masters (as at Paris).”

List of Ancient Roman Collegia (Wikipedia)

Of course the societas developed into the business partnership known as the societas publicanorum—publican societies—which were the private organizations that administered the expanding Roman Empire. These organizations were pools of money, where one’s membership was anonymous and one’s stake could be transferred to other people if desired, which is why the publican societies are considered to be the forerunners of today’s corporations.

Economist Peter Temin describes Roman guilds in his extensive study of the ancient Roman market system:

…While guilds were formal organizations of men tied together by a common occupation, they differed from the European craft guilds of the Middle Ages and early modern period. Many Roman guilds, such as the sack-carriers, or longshoremen, did not require mastery of a specific artisanal skill; their work was unskilled. The guilds of skilled workers focused more on cerebral tasks like piloting ships. All guilds allowed their members to compete freely with each other, and nonguild workers could also find employment in tasks normally performed by guild members. There were significant benefits to membership…although there is no evidence that guilds acted as unions to control wages.

Guilds could prevent crime because they functioned as self-enforcing cartels; a guild could easily refuse membership and its benefits to an outsider or punish active members who stole or behaved corruptly. Elections ultimately determined guild membership, although some guilds required an entry fee in addition. Some guilds, such as the public grain-measurers, forced new members to “take a valid oath to do honest work”.

The guild members collectively elected officers and managed business operations. Those officers held terms of between two and five years, depending on the guild. While membership was not a hereditary right, sons often followed fathers into the same guilds, and freedmen similarly followed the families from which they had won their freedom and now considered their patrons. It is unclear how many members each guild had…

The strong organization of the guild and its ability to exert collective action made guild membership desirable. Guilds often pooled resources, and most guilds had guild houses stocked with gifts and decorations given by members. Many also had their own temples, while others used their resources to engage in civic life. The measurers, for instance, were one of the guilds who erected statues to the Prefects of the annona. Guilds also elected “patrons,” men of varying influence and wealth, giving members access to those men. Less powerful guilds invited reputable local men to be their patrons; more significant guilds, like the shippers, included a handful of senators on their list of patrons. A guild member would not lightly throw away such positive social benefits.

Guilds must have monitored their members’ behavior closely. The common treasury would have produced a strong interest in members to monitor one another. More important, the reputation of the entire guild could have suffered from the bad acts of one of its members. Even if corrupt members were not expelled, it is unlikely that they would ever have been voted into officer status or given special honors by their peers.

Legal systems, and other formal organizations do not exist in a vacuum; it is often informal social custom that proves even more effective than official sanctions. Merchants relied on informal institutions to promote honesty and trustworthiness. The guarantee of reputation is the most likely candidate for the unofficial enforcement mechanism in Rome. This ex-ante solution would have prescreened the agents available to the merchants.

If the Romans used a reputation mechanism, what was the signal that established trustworthiness? Roman religion did not involve an ethical code, as is present in Judaism, Christianity, and Islam, so an appeal to religious values could not ensure trustworthiness. Instead, it seems plausible that the criterion for establishing trustworthiness was the recommendation of another merchant knight or senator, especially given the homogeneity of the two primary classes of senators and knights and the close proximity in which merchants worked in Ostia, as we shall see later.

In addition, honor and probity were important secular values among the Roman aristocracy; men of these higher ranks were considered to be de facto trustworthy and could explicitly lend that trustworthiness to others. Naturally, not all members of these classes were trustworthy, but the small, close-knit community ensured that a deviant individual couldnot hide behind his rank indefinitely. [12]

We might compare the ancient Roman Collegia to something like the Screen Actor’s Guild, or Equity today. These organizations do not have an absolute monopoly over “acting” per se, nor do they enforce quality standards (as community theater can attest). Nevertheless, the precarious nature of acting and theater work has caused these organizations to form, allowing professional actors to pool their resources to ensure their members have a decent quality of life (insurance, retirement, health care, etc.). You do not have to be a member, but the benefits are too great not to be, as long as you qualify–Earning a SAG card is a rite of passage in Hollywood. Many ancient professions were of a similar nature (as opposed to permanent contract employment today).Guilds were self-regulating and self-policing without state involvement, although the state would no doubt take an interest in certain critical occupations, later even forbidding the departure from those occupations.

It’s likely that Christianity itself began as a combination of a common meal-sharing group and religious cult. This probably developed out of the communal meals the early Christians hosted in their homes during in the Roman empire. Christians were also obliged to take care of one another and help each another out—something that would have been invaluable in a rapidly decaying Empire where entire families had been decimated and civil order was rapidly declining due to civil ward, endemic corruption, and plagues.

The Agapa or Love Feats of the early Christians, though at first established for the commemoration of a religious rite, subsequently became guild-like in their character, as they were sustained by the contributions of its members, and funds were distributed for the relief of widows, orphans, and the poorer brethren. Indeed, they are supposed by ecclesiastical writers to have imitated the Grecian Eranos. The Government looked upon them as secret societies, and they were consequently denounced by imperial edicts. [13]

Medieval Guilds

There are four major theories of how medieval guilds formed, each championed by various scholars. They are:

1.) They are continuation of the ancient Roman collegia.

2.) They were formed out of the Christian monastic orders, which were organized on the basis of collective solidarity and brotherhood among their members.

3.) They were the continuation of pagan banquets held on special occasions. At these events, warriors undertook pledges of collective solidarity for war and raiding–often under the watchful eye of the gods. “The Germanic term Gild appears in connection with these banquets. “In its origin the word guild is found in the sense of “idol” and also of “sacrifice”, which has led some writers to connect the origin of the guilds with the sacrificial assemblies and banquets of the heathen Germanic tribes.” [14]. The connection with “payment” occurs in the potluck nature of these banquets.

4.) They originated as co-grazing partnerships in pagan herding societies. In these societies one’s social standing was based on control over land and wealth, primarily livestock. Subsequently, one’s rights and freedoms were based on one’s social status. Co-grazing partnerships allowed members of the lower (free or unfree) orders to pool their resources and increase their social standing. Each member of the partnership assumed responsibility for all the others. Each member paid in to the partnership, hence the use of the term gild or gildan–meaning “to pay.”

Let’s take a closer look at each one of these:

1.) For a long time scholars thought that medieval guilds were just a continuation of the ancient Roman collegia, but it’s now clear that in most locations the collegia did not survive the fall of the Roman Empire (leading to the subsequent loss of know-how). However, some scholars still argue that the old Imperial craft traditions managed to persevere, especially in Northern Italy and Southern France. From there they spread throughout Northern Europe as the Dark Ages waned and Christianity spread.

I am inclined…to attribute them to that spirit of associated labor and union of refreshment which had existed in the Roman Colleges of Artificers, where…there existed that organized union of interests which continued to be displayed in the Guilds. I will not aver that Guilds were the legitimate and uninterrupted successors of the Roman Colleges, but I will say that the suggestion of the advantages to be derived from an association in work, regulated by the ordinances that has been agreed on, governed by officers who might judiciously direct the exercise of skill and the employment of labor, the result of all of which was a combination of interests and the growth of a fraternal feeling, was suggested by these Roman institutions, and more especially adopted by the Craft Guilds, which, at a later period in the Middle Ages, directed all the architectural labors in every country of Europe. [16]

It’s possible that in at least some locations in southern Europe, this may, in fact, have been the case. But guilds as we know them first spring up in places like Dark Ages England under the Anglo-Saxon invaders where a Roman origin is extremely unlikely. Also, guild-like associations appear to have predated Roman influence.

2.) Another concept was they developed out of religious or monastic brotherhoods. However, this idea has also fallen out of favor. It appears to be the other way around—medieval brotherhoods were derived from the kinds of mutual aid associations commonly found among pagan tribal communities.

Wilda thinks that the peculiar character of the Guilds was derived from the Christian principle of love, and that they actually originated in the monastic unions, where every member shared the benefits of the whole community in good works and prayers, into the advantages of which union laymen were afterward admitted.

But the untenableness of this theory is evident from the fact that the same characteristic of mutual aid existed in the pagan nations long before the advent of Christianity, and was presented in those sodalities which represent the form of the modern Guild.

Besides the admission…that the early Saxon Guilds were so tinctured with the superstitious customs of the pagan sacrificial feasts, and that the Church had to labor strenuously and for a long time for their suppression, would prove that we must look beyond the monasteries of the true origin of the Guild. [17]

3.) The first historian of guilds, the aforementioned Brentano, argued that guilds arose out of the sacrificial feasts of the Old Germanic peoples. Only later where they “Christianized” to include things like mutual aid and support in times of distress:

The Northern historians, in answer to the question, whence the Gilds sprang, refer above all to the feasts of the German Tribes from Scandinavia, which were first called Gilds. Among the German tribes, every occurrence among the more nearly related members of the family required the active participation in it of them all. At births, marriages, and deaths, all members of the family assembled. Banquets were prepared in celebration of the event, and these had sometimes even a legal signification, as in the case of funeral banquets, namely that of entering an inheritance; and, when they concerned kings, that of a coronation.

Further, great social banquets took place on occasion of the sacrificial assemblies at the great anniversary festivals, which coincided with the national assemblies and legal assizes, and on occasion of important political events; and at the same time the common concerns of the community were deliberated on at these banquests. Moreover, they also furnished an opportunity for the conclusion of those alliances for the purpose of plunder or war, of which we have accounts, espcially in the case of Sweden and Norway, as well as of those close unions of friends, in which, according to the Scandinavian Sagas, two warriors of antiquity were wont to confederate for life or death, for common enterprises and dangers, and for indescriminate revenge when one of them should perish by violent death.

Every freeman was obliged to attend these feasts, and bring with him whatever food and drink he might require. Hence these feasts were also called Gilds; for “Gild” meant originally the sacrificial meal made up of the common contributions; then a sacrificial banquet in general; and lastly, a society. When in later times Christianity spread itself in the North, the sacrificial banquets, with all their customs and ceremonies, remained in existence, and Christ, the Virgin Mary, and other saints, stept [sic] into the place of Odin and the rest of the gods.[18]

4.) An alternate explanation was provided by historians of the Celtic peoples of ancient Ireland. Ireland was never conquered by the Romans, and thus retained many of the pagan traditions of the North. Many of these were preserved in a series of laws that were later written down and came to be known as the Brehon Laws. These laws give a rich insight into the social structure of pagan European tribal communities before the Roman conquest. “Irish law represents possibly the oldest surviving codified legal system in Europe, and is believed to have Proto-Indo-European origins in common with the Hindu Laws of Manu.” [19]

Class differentiation, as with much of the Indo-European peoples, was based around ownership of cattle and control over common grazing lands. There were two major categories of citizens: bonded and free. At the top of the social heap were the hereditary landowners, or Flaths [flah] (Noble, chieftain, prince). Below them were the lesser classes of freeholders called Aires [arra] (or Bóaires; i.e. lords). “Any free man might become first a ‘Bo-Aire,’ or cow-lord; then after possessing land for three generations his descendants might aspire to become Flaths, or hereditary lords.” [19].

Below these classes were free tenants with little or no property who paid rent dues and placed themselves under the protection of an overlord—Ceiles, [kailas] who were the equivalent to the old English ceorls, or churls. They formed the base-class of society They were further classified into “free” (saer) and “base” (daer) tenants. Ceiles rented either a portion of the common tribal lands or private lands from a noble (Flath). All freeholders had a right to access a portion of the commons owned by the fine, or clan.

Below these were the lower tier of the social order, the great mass of indentured, or “unfree” laborers, who correspond roughly to medieval serfs.  They had no claim to the tribal lands, although they were permitted to till plots for subsistence under strict conditions. The non-free classes were the Bothachs (cottars), the Sen-Cleithes (usually servants of the nobles), and the Fuidhirs (those without a clan; refugees). Saint Patrick was originally brought to Ireland as a daer fuidhir (a semi-slave). Classes were not absolute, as in a caste system; upward mobility was possible.

According to the laws, only those who held a specified share of landed property, as determined by the laws, were entitled to the full rights of citizenship: “Only a property holder could be a compurgator, a surety, a witness (the equivalent of a modern juryman), or exercise any of the functions of a freeman. The complete person as I have described him, emerging from the Roman law, was not yet born into society. A personage must have property. The next equivalent to the protection of a lord was the support of a mutual partnership or guild.” [20]

So an option for a free person, rather than pledging oneself to an overlord, was pooling resources with other clan members in order to gain control control of enough pastureland to enjoy the same rights and privileges as a noble (Aire). Each subscriber would pledge a portion of their land and livestock to the pact, which was secured by a solemn oath between the members:

…In this view of the origin of this sort of association, the meaning of the word itself becomes important. It was a payment which was symbolized in “guild.”…the link of etymology…are the Irish words gial (” a pledge or security”), gialda (“to be a pledge or security”), which bring over the earlier customs that prevailed prior to the Guild as we know it: I mean the passage of the early Aire partnership, by which the freemen first raised themselves into a position where they could get some of the advantages of chiefs or lords, into the later association of the Guild.

Four freemen, some of whom might be free “foreigners” with no tribal home, united closely for mutual support, and became each responsible for the dues of the other to society and the tribal State. Through this union one becomes an Aire, or had the privileges of a lord. They assumed these responsibilities solemnly in the presence of an Aire, and sometimes it is supposed with religious ceremonies…

These rights of co-grazing, and their corresponding duties, must have been a very early form of social development. For, as previously shown, cattle, next to human chattels (which I throw out of the discussion) was the early form of desirable property…It is significant that the bond of this association was symbolized in a payment, a contribution free in essence yet enforcing a strong obligation…There is no doubt that the feast began in common contributions, which were in one sense payments. The common meal underlay the guild, and a common obligation underlay the meal.

These rural origins of the guilds were forgotten in the course of time, as the medieval guild as we know it formed when people fled their clans and moved into towns forming similar associations there. Preserved in these guilds was the idea of paying one’s dues to the larger association, the taking of responsibility for one’s brethren, coming to their aid, pooling resources for the common good, and the communal banquet. [21]

Guilds coalesced in towns and cities where workmen were free of feudal duties. These “ports of trade” at rivers and seaports were where long-distance trading took place. Guilds played a crucial role in these activities. The city dwellers were often “refugees” from the countryside who no longer wished to live under feudal obligations (or could not—many were probably expelled from their kinship groups for some reason). We can expect the unrelated citizens of such ports of trade to have been much more “individualistic” in their outlook than their brethren left behind in the countryside due to personality self-sorting. Eventually, these free cities would become the nucleus of a new kind of economy centered around trade, money, and contracts rather than reciprocity, kinship and social status. By contrast, the household model continued to predominate in the remote areas of Europe, organized according to what Thompson called the “moral economy.”

In the eleventh century the process…had assumed definite form, both in England and on the Continent. The barons had laid firm hold of the dwellers in the fields. The peasants, who had proved too stubborn for enfiefment, had either been subjected, as in the Jaquerie of Normandy and other revolts too insignificant for historical record, or they had escaped into the growing towns, and there maintained the personal rights which their forefathers imbibed from the old Aire partnership. In this period, the earliest charters of the religious or social guilds appear in England…[22]

The ultimate origins of the medieval guild system, however, will probably never be known:

The early guilds had no connection with trade or industry, but were voluntary associations formed for a variety of purposes-political, social and religious.

Endeavors have been made to trace their origin to the pagan customs of the primitive Teutons at the sacrificial banquets and funeral festivities…But this is clearly inadequate. The common banquets were not peculiar to the Scandinavians, but on the contrary were an institution of the most wide-spread character. They occur in the early history of every nation from the Asiatic joint families to the Roman collegia, Russian villages and Irish septs.

Still more unsatisfactory is the statement…that these drinking bouts contained in germ the essence of all guilds. Occasional survivals of the practice are still found to-day on the islands of the Baltic, and it would require a peculiarly lively imagination to connect these casual festivals with the medieval unions. There is absolutely no evidence that any of the Anglo-Saxon guilds ‘were founded on such a basis, nor is there any more reason to assert a similar origin for those of the continent.

In fact, the attempt to discover any one particular source is idle. Combined efforts of individuals have always existed to supplement the defects of government and to afford mutual protection in case of need. Indeed the social instinct of man, the impulse to work or worship in common, has shown itself in all nations and at all times. The names of these associations naturally varied with the different countries, and the ends they sought to attain bore a fixed relation to the changing needs of the society in which they existed. But the idea that all guilds are derived from one fountain head is plainly erroneous, and this vain attempt to discover the impossible explains the one-sided, divergent views of so many historians.’ [23]

It was the gradual decline and sunset of this formerly effective system for both merchants and craftsmen that led to the formulation of the modern globalized market economy. Institutions such as law courts, commercial banks, and joint-stock corporations took the place of these institutions for conducting large-scale international business and trade, and thus laid the foundation for the modern world and the rise of the Liberal ethos of “hyperindividualism”—something we’ll take a look at next time.

Markets don’t function well if they are ridden with frictions like lack of information, lack of trust, or high transaction costs. In the presence of frictions, business is often conducted via relationships.

Until the end of the fifteenth century, impartial institutions like courts and police that serve all parties generally—so ubiquitous today in the developed world—weren’t well developed in Europe. In such a world without impartial institutions, trade often was (is) heavily dependent on relationships and conducted through networks like merchant guilds. Such relationship-based trade through dense networks of merchant guilds reduced concerns of information access and reliability. Not surprisingly, because the merchant guild system was an effective system in the absence of strong formal institutions, it sustained in Europe for several centuries. In developing countries like India, lacking in developed formal institutions, networked institutions like castes still play an important role in business.

Before the fourteenth century, merchant guild networks were probably less hierarchical, more voluntary, and more inclusive. But, with time, merchant guilds started to become exclusive monopolies, placing high barriers to entry for outsiders, and they began to resemble cartels with close involvement in local politics. There were two reasons why these guilds erected such tough barriers to entry:

Repeated committed interaction was the key to effectiveness of merchant guilds. Uncommitted outsiders could behave opportunistically and undermine the reliability of the system. Therefore, outsiders faced restrictions.
Outsiders threatened the position of existing businessmen by increasing competition. So, even genuinely committed outsiders could be restricted to enter as they threatened the domination of existing members.

But, in the sixteenth century, the merchant guild system began to lose its significance as more impersonal markets, where traders could directly trade without the need of an affiliation, began to emerge and rulers stopped granting privileges to merchant guilds. The traders began to rely less on networked and collective institutions like merchant guilds, and directly initiated partnerships with traders who they may not have known well. For example, in Antwerp the domination of intermediaries (called hostellers) who would connect foreign traders declined. Instead, the foreign traders began to conduct such trades directly with each other in facilities like bourses. [24]

[1] The Story of Manual Labor in All Lands and Ages: Its Past Condition, Present…By John Cameron Simonds, John T. McEnnis pp. 569-570

[2] The History of Freemasonry: Its Legends and Traditions…, Volume 2 By Albert Gallatin Mackey, William Reynolds Singleton, William James Hughan p. 56

[3] Ancient Law: Its Connection to the History of Early Society by Maine. Introduction, p. xii

[4] On the history and development of gilds, and the origin of trade-unions p. 16

[5] Not used

[6] The Social Law of Labor by William B. Weeden, p.145


[8] The Ancient Mesopotamian City by Marc Van De Mieroop p. 190

[9] The History of Freemasonry: Its Legends and Traditions…, Volume 2 By Albert Gallatin Mackey, William Reynolds Singleton, William James Hughan p. 560


[11] Not used

[12] The Roman Market Economy by Peter Temin, pp. 109-110

[13] The History of Freemasonry: Its Legends and Traditions…, Volume 2
By Albert Gallatin Mackey, William Reynolds Singleton, William James Hughan pp. 560-561


[15] Two Chapters on the Mediaeval Guilds of England by Edwin R. A. Seligman p. 10 footnote 1

[16] The History of Freemasonry: Its Legends and Traditions, Its …, Volume 2 By Albert Gallatin Mackey, William Reynolds Singleton, William James Hughan p. 562

[17] The History of Freemasonry: Its Legends and Traditions…, Volume 2 By Albert Gallatin Mackey, William Reynolds Singleton, William James Hughan pp. 561-562

[18] On the History and Development of Gilds, and the Origin of Trade-unions by Lujo Brentano, pp. 3-4


[20] The Social Law of Labor by William B. Weeden, p. 68

[21] The Social Law of Labor by William B. Weeden, p. 146-147-148

[22] ?


[24] Two Chapters on the Mediaeval Guilds of England by Edwin R. A. Seligman pp. 1-2


Leave a Reply

Your email address will not be published.