4.5

Undeserved wealth (Old Church, Amsterdam)

Undeserved wealth (Old Church, Amsterdam)

In other parts of Europe, there were also sheriffs, dyke wardens, mayors, and government officials or civil servants. However, the situation in Holland was very different from that in Italy or Flanders. For example, the appointment of magistrates in Holland never fell under the control of the guilds. These guilds were powerful pressure groups representing those working in particular trades or crafts. There were guilds for bakers, butchers, fish merchants, vegetable sellers, sack carriers, brewers, tanners, shoemakers, tailors, doctors, lawyers, merchants, bankers, artists, turf carriers, launderers, cloth makers, weavers: you name it, there was a guild for it. The guilds meant everything to its members. Some of the guilds’ functions were: to set standards of quality and to monitor the application of these standards; to see to the training of apprentices; to fix rates of pay; and to prevent proliferation of independent artisans who might set themselves up in competition. Last but not least, the guilds drew up price agreements.

You will not find anyone today who would have a problem with the first three points on this list. We also have ISO standards, training programs and collective labor agreements. But the last two points would be a thorn in the flesh of present-day competition watchdogs. By their policy of controlling who could set up a business, as well as their incomes and price agreements, they took all the vigor out of the market. On the other hand, this system held great advantages. In the first place, the customer knew the quality he could expect to get for his money. Secondly, because the guild members agreed among themselves how many people would be allowed to set up business in their line, each guild brother had the security that he would never be put out of business by a competitor. In fact, he did not have any competitors: he had colleagues whom he could consult about business over a few drinks at fixed times. And so it was that the guilds were also social clubs.

Consultations between guild members could be about any number of things. Sometimes they were purely about business, like the division of the ships’ cargoes, as it was considered better to spread risks over a number of different ships. Then again, they could be about the welfare of the family of their dead brothers. That was not only out of charity: the guild managed a pension fund and saw to it that the money was only paid out to people of impeccable behavior. (As you can imagine, the guild was a hotbed of gossip!) Guild members also discussed what was happening elsewhere in Europe as this could affect their own business.

Business consultations, back-biting and discussing politics over drinks: a perfectly normal scenario that could be from any age. Yet, the well-informed group of people that evolved through the guilds was a spectacular innovation when you consider that, at that time, the European population consisted mainly of peasant farmers whose only subject of conversation was the rotation of crops for the coming season.

In the light of the circumstances of the time, there are two points in particular in relation to the guilds that earn closer consideration: the continuous efforts of the guilds to achieve wage and price stability. The Church taught that the workman was worth his wage. This Biblical precept meant that a man should be able to provide for his family as well as save for other things, such as the wedding of his daughter, a pilgrimage to a shrine, the giving of alms and having a Mass said for the salvation of the soul of the deceased members of his family. Those were very important concerns and therefore there could be no haggling over wages. Wage bargaining only existed where the guilds did not effectively control the labor market, such as in the towns in Holland in the fourteenth century.

The guilds also saw to it that prices were fixed. Since the people of the Middle Ages had absolutely no conception of what economic growth was, they believed that profit could only be made at the cost of another person. The Church did everything possible to discourage this type of ‘theft’, as they saw it. Moral theologians recognized that people felt happier if they had possessions, but regarded private property for its own sake as undesirable. Nobody doubted that God had wanted commerce to exist; otherwise mineral resources would have been evenly distributed all over the world. But a merchant was only allowed to do business for the good of the community and not for his own personal gain. Profits could only be high enough to enable him to pay wages: whosoever made a profit over and above that was a thief and would burn in hell. Theologians and philosophers had difficulty understanding the punishment of the ‘good merchant’ in the Bible. They realized that people sometimes inadvertently earned more than they needed, and believed that these people did not belong in hell. Therefore, Purgatory was invented for those who unintentionally made more profit than they needed: a place where a sinner could expiate his sins before going to heaven. On the other hand, the tradesman who sold himself short imperiled his family and risked his eternal soul as well. By making price agreements the guilds helped their members to keep to the straight and narrow path.

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