On Guilds and the University

The always fantastic Etymology Online writes:

guild (n.) Look up guild at Dictionary.comalso gild, early 13c., yilde (spelling later influenced by Old Norse gildi “guild, brotherhood”), a semantic fusion of Old English gegield“guild, brotherhood,” and gield “service, offering; payment, tribute; compensation,” from Proto-Germanic *geldjam “payment, contribution” (source also of Old Frisian geld “money,” Old Saxon geld “payment, sacrifice, reward,” Old High German gelt “payment, tribute;” see yield (v.)).

The connecting sense is of a contribution or payment to join a protective or trade society. But some look to the alternative prehistoric sense of “sacrifice,” as if in worship, and see the word as meaning a combination for religious purposes, either Christian or pagan. The Anglo-Saxon guilds had a strong religious component; they were burial societies that paid for Masses for the souls of deceased members as well as paying fines in cases of justified crime. Continental guilds of merchants, incorporated in each town or city and holding exclusive rights of doing business there, arrived after the Conquest. In many cases they became the governing body of a town (compare Guildhall, which came to be the London city hall). Trade guilds arose 14c., as craftsmen united to protect their common interest.

So what guilds did was try to establish monopolies in their various domains. They aimed  for a cartel to control prices and entry, capture a greater share of economic rent and more profits (even if at the cost of the economy as a whole). For instance, you couldn’t have carpentry done without hiring someone who was a member of the  Carpenter’s Guild, who would charge the same rate as everyone else in the Guild. Anyone discovered working as a Carpenter outside the Guild would have likely have violence done to them until they repented.  As subspecialties formed, disputes over which guild was responsible for which work arose.

As I have written before, economic actors don’t want a competitive market for themselves, they want monopolies, so the rise of guilds or business associations, corporations, labor unions,  and the like is natural. Actors do want everyone else to be competitive though. So in short, members of a guild logically dislike (and are poorly served by) every  other guild (but their own).

What we have is a prisoner’s dilemma. I want my protections, you want your protections. We would both be better off if neither of us had protections, but there is no incentive to move in that direction, so we wind up with everyone operating as a cartel. A constitutional arrangement between the parties could break this up, as can changing not only the rules of the game, but also the players.

Eventually of course the guild system, which was stronger in cities and towns, and weak in rural areas where specialization was harder to come by, dissipated, as new competitive industries opened up, as the technico-legal innovation of corporations routed around guilds, as trade increased and brought in products from out-of-town, and so on.

We still have guilds today though, but they aren’t called that. To name a few:

We could further look at intersections, like Civil Engineering professors, (can’t be one without a PhD from an accredited university in Civil Engineering or a similar field), or subdivisions like Transport Engineering professors (likewise).

Some fields are more open, but the trend is try to close things down with occupational licensing, (can’t decorate nails without 3200 hours of apprenticeship training nowadays, that’s longer than a Master’s Degree in Civil Engineering, by the way) which is in many ways replacing unions. At the organizational level, accreditation is a similar process by which entrenched interests (say universities), try to keep out new entrants (say bogus universities founded by famous real estate developers). This is all supposed to be done on the behalf of the public interest of course, and there are many bad players out there who need to be differentiated from the real. I am not clear why people cannot figure this out on their own, but apparently some people cannot.

Think about who stagnation benefits and who change benefits. This explains why we are in the situation we are in. The guilds are ensconced, and growing, and breaking this prisoner’s dilemma is increasingly hard. I suspect the police (and military) will be the last to go, but I think guilds like education are ripe for the taking in many non-guilded fields. Knowledge is essentially free now, higher education’s monopoly is that it provides accreditation. That might not be the simplest thing to provide, but surely it is providable with recommendation systems. It is a question of establishing networks of trust. The difficulty is that education feeds existing guilds (say Civil Engineering departments training Civil Engineers), and the guilded professionals will be loathe to accept new-fangled accreditation, as it could be perceived to devalue their own degrees. Since Civil Engineers are legally established (through the Professional Engineering licensure, granted by the state) it will be hard to erode this. On the other hand, consider Electrical Engineering, or especially Computer Science, much more fluid fields, where the degree counts for much less and ‘professional’ status is not considered as critical. Certification from an outside player needs to be accepted by private companies, not by the state, and motivations change from the downside risk-avoidance nature of government (fear) to the upside risk-seeking nature of capitalism (greed). Hence we see entrants like Udacity playing in the Electrical Engineering and Computer Science space, but not the Civil Engineering space.

But just as this system has lasted nearly a millennium (the University of Bologna dates from 1088), it won’t be unbuilt in a day. Universities have multiple functions, they are conglomerates, not all of which are the same monopoly position as accreditation. They function as dating pools for the upper middle class. They are large research labs and hospitals. They provide sports entertainment. Those are already competitive functions.