The Dark Side of Human Institutions: A Conversation with Sheilagh Ogilvie on the European Guilds

What role did guilds play in the economic development of Europe? Why do bad institutions persist throughout history? Join us for this conversation between Mark Pennington (King’s College London) and Sheilagh Ogilvie (University of Cambridge) for a discussion of her new 900-year history and economic analysis of the European Guilds. Subscribe on iTunes and Spotify Subscribe to the Governance Podcast on iTunes and Spotify today and get all our latest episodes directly in your pocket. Follow Us For more information about our upcoming podcasts and events, follow us on facebook or twitter (@csgskcl). The Guest Sheilagh Ogilvie is Professor of Economic History in Cambridge and a Fellow of the British Academy. She holds degrees from the University of St Andrews (1979), Cambridge (1985), and Chicago (1992). She has been successively Lecturer (1989), Reader (2000), and Professor of Economic History (2004) in the Faculty of Economics at the University of Cambridge.She is the author of State Corporatism and Proto-Industry (Cambridge, 1997), Women, Markets and Social Capital in Early Modern Germany (Oxford, 2003), Institutions and European Trade: Merchant Guilds, 1000-1800 (Cambridge, 2011) and the editor of European Proto-Industrialization (Cambridge, 1996), Germany: A New Social and Economic History (3 vols, London, 1996/2003), and Revolution des Fleißes, Revolution des Konsums? (Ostfildern, 2015). She has published journal articles on institutions and economic development, the economics of guilds, merchants, rural communities, serfdom, consumption, retailing, occupational structure, demography, proto-industry, banking, female labour force participation, regulation, the growth of the state, and social capital. She is the winner of the Gyorgy Ranki Prize (1999), the Anton Gindeley Prize (2004), the René Kuczynski Prize (2004), and the Stanley Z. Pech Prize (2008). She has been the director of research projects on “Social Structure in Bohemia, 1500-1750” (British Academy, 2001-03), “Economy, Gender, and Social Capital in the German Demographic Transition” (Leverhulme Trust, 2005-07), and “Human Well-Being and the ‘Industrious Revolution’: Consumption, Gender and Social Capital in a German Developing Economy, 1600-1900” (ESRC, 2008-12). She held a British Academy/Wolfson Research Professorship (2013-16), during which she explored the relationship between human capital and long-term economic growth. Her book on the economics of guilds was published with Princeton University Press in March 2019. Skip Ahead 1:03: Sheilagh, why have you decided to bring your work together in a volume of this kind? 4:13: How would you define a guild? What are the key features of such an organisation? 8:40: The title of the book is The European Guilds: An Economic Analysis. Economists often disagree about things. One of the things they disagree about is the efficiency properties of these guilds. Some would argue that these guilds played an important function – they were efficiency enhancing, they might have been necessary for growth. I know that’s not a view that you hold. But could you give us an indication of what those arguments are? 14:22: These are basically arguments which are suggesting that some kind of market failures arise in these situations, and you have an institutional response to address the market failure. In this instance the guild is seen as the institutional mechanism to solve it. 15:32: Your view as I understand it is very much that guilds should be seen as rent seeking institutions which were actually seeking exclusive privileges for the members – and rather than solving a market failure, they essentially create a different sort of failure, which is that certain people are excluded from markets, there’s a lack of competition, you actually don’t get the quality control or professional certification that you might have gotten from an alternative institution. Is that a fair summary of your view? 20:14: So this is saying that guilds a