Self-Regulation in the Medieval Guilds and Peasant Commons
Context
Note: Tine De Moor's excerpts focus on a study based on historical materials mostly in the "High" Middle Ages in the Low Countries (Belgium, Netherlands) in Europe.
Discussion
"The corporations were self-regulating for the most part and instead of relying on external bodies to give relief they became self-help groups of a sort, forming autonomous bodies often enjoying good relations with local authorities. The fact that people formed groups is not in itself striking, but that they themselves regulated and controlled the execution of their own rules, including disciplinary matters, is less obviously to be expected.
To make their collective projects work, guilds and commons relied heavily for enforcement mechanisms on group norms, as opposed to formal legal enactments. They designed most of the rules themselves, with or without the involvement of the local powers, and that should not surprise us: sociological research has proved that member involvement in the design of rules offers a better guarantee of success.68 Members supplemented these rules with impressive sets of ‘‘instruments’’ to make their alliances work. I will not be going into detail about such things as fining systems, but in the context of this article it is important to note that members of these corporate institutions, both guilds and commons, developed methods to protect their organizations from the functioning of the free market. They tried to safeguard at least part of the production market against the forces of the free market. It has often been assumed – but as often highly contested – that they tried to achieve a complete monopoly, but in practice it did not necessarily turn out like that.69 Notwithstanding strict written regulations, in practice there were many, and often rather radical, exceptions to the guilds’ regulations that prevented any form of monopoly from being established.
‘‘A world within a world’’
With a large set of rules, commoners and guild members tried to regulate the behaviour of their fellows – to prevent them from free riding – and to control the effect their surroundings could have on the behaviour of the members. They developed a system of market regulation in order to protect their ‘‘own little world’’. Measures were taken by both guilds and commons to achieve a reasonable income for their members and to eliminate the disruptive effects of the market, which was still at an early stage of development when commons and guilds were set up in Europe. Institutions such as guilds could make functioning within those settings less risky, though without losing too many of the advantages the market offered. ‘‘Prudence above all’’, one could say.
We can agree with Prak and Panhuysen that the fact of the guilds’ domination of the markets being incomplete does not necessarily point towards an inefficient monopoly. They might not even have aimed to completely monopolize their trades in the first place.71 As noted by Panhuysen, guilds had a number of strategies to deal with these problems, including strategies designed to give master tailors control over the most profitable parts of their trade, while they were willing to compromise on what were seen as peripheral activities.
One method used by guilds in their attempts to master product markets was to form cartels. The number of conflicts concerning the right to form cartels demonstrates the importance of them to the guilds until the very eve of their abolition. The information about that and the effects it had is limited, but there are indications that the guilds managed to protect the market to a great extent, if not completely.73 The question here is whether it was necessary for the guilds to dominate markets completely. Would that have been an objective of a small-scale organization aimed primarily at securing the income of its members who had particular skills and who, because of their human capital, saw themselves as being distinct from the less well trained ‘‘mob’’ who worked in the rural economy? Was there much advantage to be gained from a putting-out system when one does not have the capital to invest in such a system? It seems that the guild system, and the system of common land, each offered their members the advantages of scale in return for cooperation.
Peasants too tried to limit the influence of the market on their commons and their members. The background here is a continuous struggle to prevent the over-exploitation of the common, although it is usually supposed, primarily by non-historians such as Hardin,74 that commons were traditionally always overgrazed. In fact, regulation of the use of the common and rules to prevent or at least restrict the commercialization of its assets were devised, with two main methods.4
One involved setting stints, or numerical limits, to the amount of resource units per person, and implementing a price mechanism that adjusted prices to the foreseeable pressure on the commons (payment per head of cattle). Depending on the type of resource involved, various types of rules limiting the influence of the market could be found on all European historical commons. In general the amount of produce a commoner was allowed to take was limited to a certain number of resource units. In some cases the surface of the common was expressed i terms of the number of units of cattle the pasture could feed. For example, for the Wijkerzand common in the central Netherlands the total of 180 ‘‘shares’’ and their size in the grazing rights of the common appear to have been laid down in the fifteenth century and have survived until today.
Often the shares of the commoners were limited not by the capacity of the common but by factors directly related to aspects of the prevailing subsistence economy and so unrelated to the wider commercial economy. One such rule was the express prohibition of the sale of produce from the common (wood, or milk from the commons’ cows) outside village borders, which helped protect the most valuable assets of the common against the negative side effects of the free market (commercialization and over-exploitation in the case of the common). But protection of members against the free market is in no sense the same as being against the free market.
Commoners could have participated in the free market regardless of their activities on the common.
Commons developed other mechanisms to offer resources at a uniform price, the intention being to foster greater equality within the organization.
Prices of what could be harvested were uniform and equal for all members, but could be higher for non-members in cases where they were admitted.
That does not mean that prices for products were stable; they were adjusted, not to the prices of the market but to the situation of the common. Evidence can be found of commons that used an ‘‘internal market’’ to regulate the use of their resources, so that when demand for resources (by members) was high and threatened to become too high in comparison with what was available on the common, prices per individual animal were raised to reduce demand for cattle on the common.
The functioning of the guilds can be compared to that. Members of guilds aimed to put their products on the market at uniform prices to promote, though not necessarily of course to achieve, the highest possible average income for those members. Prak, however, notes that the great social differences between members of guilds indicates that there must have been other factors at work to turn that optimal average into a minimum wage.79 Neither guilds nor commons used the law of supply and demand to set or change their prices, but used instead an internal autonomously defined quality standard. Products of the same quality were to be sold for the same price, which created a form of medieval quality label. That not only made trade easier, it also prevented internal conflicts from arising.
Gustafsson considers quality control a key organizing principle of medieval guilds. The variability of quality as determined largely by the individual craftsman’s skill would be changed only with the Industrial Revolution, when the quality of products was made more homogeneous through the use of machines.81 Meanwhile guilds were necessary to solve the ‘‘quality problem’’ for traders in the emerging market economy. Gustafsson sums up several methods used by guilds to control quality: the examination of raw materials, scrutiny and regulation of production processes, setting standards and instituting compliance inspections for end products, and the use of marks to indicate a specific quality. One can assume that by controlling quality themselves, the guilds achieved a competitive advantage over free-market produce, as traders no longer had to control the merchandise so intensively themselves; their guilds did that for them.
The aim of offering the products of the guilds at uniform prices had an effect similar to what happened on the common: those who complied with the rules were assured of an income, probably not the best possible price they might have received in a free market, but certainly a sustained income. Guild members who decided to ignore the quality standard and made goods of a lesser quality offered at lower prices threatened the income of all the suppliers of better quality goods. That straightforward social dilemma was solved by a multitude of rules and sanctions, to prevent free riding by guild members. Richardson describes how the members of guilds were dependent upon each other to achieve that required income level: ‘‘[T]hey had a common theme. Guild members acted to increase their incomes, and their efforts required action in concert. Members had to cooperate. Each had to do his part for the guild to attain his goals.’’
Ignoring the quality standards of the guild can be considered a user strategy equal to overusing the resources of the common, either for personal or commercial use. In both cases members abused the fact that they belonged to a privileged group, such as commoners who would try to put more than their share of cattle on the common, abusing their legitimate presence there. Whether or not the abuse would be discovered depended on the functioning of the commoners’ social control mechanisms. Similarly, guild members could abuse their reputation as members of a respected guild to offer products of poorer quality, with the pretence of guild quality. Records exist of manufacturers who, while guild members, preferred a low-quality-product strategy which conflicted with the general strategy of their guild. Durability, for example, was important in the manufacturing sector because products often needed to be sold over long distances; if a product proved to be of lower quality, that could ruin the reputation of a guild.
To prevent members from free riding, social control played an important role in these institutions. We find evidence that members of commons could be fined if they did not report it when they saw others cheating, such as by putting too many cattle on the common, while guilds often required members to set up shop in the same area in order to encourage socially based control of each other.86 The so-called gradual sanctioning mentioned by Elinor Ostrom in her list of design principles for durable common pool institutions is found in both institutions’ methods of fining free riders.87 In both guilds and commons, the punishment could amount to permanent expulsion from the organization.
Guilds held other trump cards to prevent free riding. Richardson explains that craft guilds combined spiritual and occupational endeavours because ‘‘the former facilitated the success of the latter and vice versa. The reciprocal nature of this relationship linked the ability of guilds to attain spiritual and occupational goals. By combining piety and profit the guilds could overcome free-rider problems and achieve common goals.’’
That kind of bundling of endeavours,
- increased the pain of expulsion. People expelled from guilds with both craft and Christian features lost both business and religious benefits. They lost not only their colleagues but also their church, not only their partners but also their preachers, not only their means of prospering in this life but also their hope of passing through purgatory.
According to Richardson, the advantage of combining religious and economic goals lay in the fact that the religious consequences of defection could not be easily calculated as they might become obvious only in the afterlife, so the religious goals of the guild added an extra tool of enforcement. Richardson concludes that complex guilds, those combining endeavours, deterred shirking better than simple, secular associations and that the complex variants would be more profitable than the simple ones." (https://www.ris.uu.nl/ws/files/20096187/_PUB_SilentRevolution_IRSH_53_Suppl.pdf)