Craft guilds: rent-seeking or guarding against the grabbing hand?

Botham, Craig (2021) Craft guilds: rent-seeking or guarding against the grabbing hand? Prize-winning Student Working Papers (1). London School of Economics and Political Science, London, UK.

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Abstract

The literature on craft guilds assigns them many roles, variously promoting skill acquisition and innovation, reducing transaction costs and asymmetries of information, providing solidarity for members, and wasteful rent seeking. Debate on the latter has typically centred on whether rent seeking was the primary goal of guilds, or whether it was essentially a necessary evil to allow guilds to fulfil their true institutional purpose by incentivizing collective action. It is rarely suggested that guild lobbying may have been a defensive measure against predatory elites, which served to increase economic efficiency and reduce extractive behaviour in the economy as a whole. An implicit assumption seems to be that guild rent seeking disturbs a pre-existing competitive equilibrium in markets and introduces inequality in previously equitable political rights. This essay approaches the topic by synthesising the literature on the rent seeking role of European guilds with that of the role of guilds in urban politics and the literature on firm theory and market structure. It argues that such a synthesis offers insights on imbalances of political and market power that call for a reinterpretation of ‘rent seeking’ behaviour by guilds. Guilds typically faced monopolies and monopsonies backed by an inequality of political power, which their own ‘rent seeking’ sought to overcome. Guilds therefore may have reduced aggregate rent seeking and improved efficiency. A renewed focus on urban politics and market functioning could help paint a more accurate picture of the true nature of guild rent seeking.

Item Type:	Monograph (Working Paper)
Official URL:	https://www.lse.ac.uk/Economic-History/Working-Pap...
Additional Information:	© 2021 The Author
Divisions:	LSE
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HN Social history and conditions. Social problems. Social reform H Social Sciences > HC Economic History and Conditions
Date Deposited:	26 Nov 2021 15:15
Last Modified:	15 Sep 2023 23:54
URI:	http://eprints.lse.ac.uk/id/eprint/112746

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