Guilds were associations which grew up and flourished chiefly among the commercial and industrial classes during the middle ages. The word is derived from A.S. gild (Dutch gild, Ger. gilde) 'a payment;' the idea of payment may therefore be assumed to be the prominent original feature of the association. The letter u in the English spelling of the word, it may be added, is superfluous, gild being the correct form. The full meaning of the word was unfolded only in the course of the history of the institution.
It is one of the many debateable points connected with the guilds, whether and how far the medieval institution was preceded and influenced by similar societies in Greek and Roman times. In the eranoi and thiasoi of the Greeks, and still more in the collegia opificum of the Romans, many writers find a resemblance to the guilds. The whole matter is obscure, the historical evidence being scanty and doubtful. As the ancient economy rested on slavery, and guilds were the voluntary organisation of the industrial classes, such associations could not have been very widely diffused in the ancient world, if they existed at all. The probability is that the trade corporations of the later Roman period, though very different from the guilds, may have affected the early development of the latter. But the real origin of the guilds must be sought in the needs and circumstances of the time when they flourished.
The guilds known to history were an organisation of the commercial and industrial classes, determined by the economic, social, and political conditions prevalent during the middle ages. The most important of these conditions were the growth of freedom in the towns as opposed to the slavery of older times and the still existing serfdom of the country, the prevalence of a small industry operating for the most part in strictly defined local limits, and the absence of strong central governments. They were free local associations of the industrial classes for the promotion of their common interests at a time when central governments did not exist or were too weak to perform all the functions of government as now recognised.
As the cities, and the free life associated with them, arose but slowly in the Teutonic settlements after the wreck of the Roman empire, the guilds had at first a very gradual growth. The first mention of an institution so called occurs in England in the laws of Ina (7th century) and Alfred. We hear of it first on the Continent in the time of Charlemagne in 779. By the middle of the 9th century guilds were widely diffused throughout the Frankish empire. In the 11th century they began extensively to flourish in the countries settled by the Teutonic peoples; and they were powerful also in France and Italy, where the Teutonic influence had been only partially felt. In the 14th and 15th centuries the institution reached its culminating point.
Guilds were an historical institution varying with the times and with the needs and aims of their members; and it would therefore be misleading to attach too definite a meaning to the word. In some of them doubtless the distinctive features were periodic festivals defrayed by the contributions of the members. These were the social guilds. As during the middle ages the distinction between religious and secular was not so strongly marked as now, all the guilds had more or less of a religious cast. Many of them, however, had a distinctly and exclusively religious purpose, and are therefore specially called religious guilds. But the earliest great example of the historic guild was the gilda mercatoria or gild merchant. In the evolution of town life during the middle ages the commercial class was the first to assert itself. It does not fall within the scope of this article to explain the conditions under which the medieval towns arose; and we need hardly state that as the towns grew, the necessity for intercourse among themselves and with the surrounding country regions was soon felt. Within the towns the advance of civilisation brought with it a multitude of crafts, the workmen in which organised themselves into the craft guilds. In many cases the guild organisation was identical with or grew into the government of the towns. But as the merchant guilds were first in the field, and moreover as the great merchants were frequently also the local landholders, the merchant guilds claimed and for a long time maintained a privileged position. Hence fierce and bitter struggles between the merchant and craft guilds, which after continuing for many generations ended on the whole in favour of the latter towards the end of the 14th century.
From what has been said it will be evident that the guilds had a far wider scope than the trades-unions of the present time. The distinction between labour and capital did not then exist; the guilds were an organisation of the whole industrial class, and they were associated with the business of local and civic self-government in the widest sense of the word. They were most powerful on the Continent, especially in the towns of Flanders and south Germany, where the civic life was strongest and the central government particularly weak; there the guild struggles, especially the struggle of the craft against the merchant guilds, were fought out most vigorously. In England, where after the Norman Conquest there had been a comparatively strong central power, the guilds found less scope for independent activity in that way.
The inner organisation of the guilds rested on the arrangement of the workers into master, journeyman, and apprentice. The right to the independent exercise of a trade depended on being member of a guild, and guild membership carried with it the privileges of citizenship. On the one hand, the guild had its own particular branch of industry reserved to it and a local market for its produce secured; on the other hand, the guild had to see that its members possessed the due qualifications, moral and technical, and that the work they turned out was of fair and reasonable quality. In other words the interests of producers and consumers were supposed to be reconciled on equitable terms. Those objects could be attained, and the guild organisation generally could be maintained only by a system of regulations, which were often very minute, and yet were not sufficient to prevent continual disputes between the various crafts. On the whole the guild organisation was best adapted to a stable condition of industry and of society.
The causes of the decline and fall of guilds have not yet been thoroughly investigated, but the main reason may be found in the fact that they became stagnant and did not adapt themselves to the conditions of modern progress. As they had grown up and flourished under medieval conditions, so they began to decay under the new influences which overthrew the medieval system. Under the centralised governments which rose on the ruins of feudalism, and during the great wars waged by them in the 16th and 17th centuries, the free civic life of Flanders and Germany was crushed out. In England the central power represented by Henry VIII. gave a severe blow to the guilds by confiscating their property on the plea that it was used for purposes of superstition; only the London corporations redeemed their funds by paying a fine of £18,700. The mercantile system was best adapted to such governments, and the guild organisation had to conform to the new system. Strong governments like France and Prussia regulated the guild organisation in the interest of the central power as then understood, the result being to deprive the members of free initiative and to make their constitution more rigid than ever. Above all, it was the great industry of more recent times which finally broke up and superseded the guild industry. This may be best illustrated by the early history of the steam-engine, which was at once the originating cause and the embodiment of the industrial revolution that made guilds a thing of the past. Because of the opposition of the trade-guilds of Glasgow, James Watt could pursue his experiments only within the limits of the university there. The skill, energy, and enterprise which produced the first effective steam-engine under Watt's initiative, were found at Birmingham, a town where trade corporations did not exist. These facts are typical of the whole movement. Guild restrictions, whether imposed by themselves or by strong central authority, were not consistent with the new industry, for which freedom was a prime necessity. This was at length recognised in the legislation of the most advanced countries of Europe. After a partially successful attempt by Turgot in 1776, trade corporations were entirely abolished in France at the revolution of 1789. All special industrial privileges enjoyed by guilds or corporations in England were removed by the municipal Reform Act of 1835. The North German Industrial Code of 1869 had the same effect in Germany. Thus the guild organisation, which during the middle ages realised the ideals of freedom, progress, and equity in such measure as was attainable by the men of that time, had become opposed to the wider claims of freedom, progress, and equity as now understood, and had to be swept away.
The name of guild has recently been revived in connection with associations for various social purposes, self-improvement, &c. These we need not say are entirely different from the old guilds, to which this name were better restricted. The co-operative society is the only institution existing in the western world that really corresponds to the historic guild. The London livery companies still continue, but they have lost the substantial characteristics of the organisations of which they are a survival and relic. Recent investigation, however, has shown that guilds have long flourished very extensively in China. The castes of India in many respects perform the same functions, industrial and social, as the medieval guild.
See the articles CO-OPERATION, TRADES-UNIONS, CITY, CORPORATION, HANSEATIC LEAGUE, &c. The whole subject of guilds has not yet been sufficiently investigated, and in some important cases the materials for such investigation no longer exist. Most of the documents relating to the guilds of Paris, for example, were destroyed during the revolutionary period of 1789. See L. Brentano, On the History and Development of Guilds, first published as preface to English Guilds by Lucy Toulmin Smith (1870), and appearing later as introduction to the same writer's Arbeitergilden der Gegenwart (1871); Ochenowski, England's Wirthschaftliche Entwicklung im Ausgange des Mittelalters (1879); Dr C. Gross, The Guild Merchant: a Contribution to English Municipal History (2 vols. 1890); article 'Gewerbe,' by G. Schönberg, in Schönberg's Handbook of Political Economy (2d ed. 1886); E. Bain, Merchant and Craft Guilds of Aberdeen (1887); and Walford, Guilds: their Origin and Constitution (2d ed. 1889). For the earlier period of English guilds, W. J. Ashley's Introduction to English Economic History and Theory (1888) may be particularly recommended.