By the 11th cent. in Europe, associations of merchants had begun to form for the protection of commerce against the feudal governments. Those merchant guilds became extremely powerful as trade in the Mediterranean and across Europe increased. Some of the Italian merchant guilds, such as those in Genoa and Florence, became dominant in local government. In England and in Germany the merchant guilds also exercised enormous power in the growing towns. Commerce was becoming less and less a local affair, and the guilds in some cases developed into intercity leagues for the promotion and protection of trade. The most striking example was the Hanseatic League of N Europe, which established and controlled some of its own trading cities. The merchant guilds had vast influence in the development of commerce during that period.
No less important were the craft guilds, the associations of artisans of a particular industry, e.g., the weavers guild. These grew with great rapidity as towns developed in the 12th cent. and tended to share power with the merchants or even, in some cases, to supplant them in power. Generally the members were divided into masters, apprentices, and journeymen. The masters were the owners of the shops and instructors of the apprentices. The apprentices were bound to the masters; they were accepted for a stipulated sum paid to the masters for training and were given a subsistence wage for a number of years; the amount paid and the length of time varied from one craft to another and one place to another. The apprentices were strictly under the control of the masters, but the conditions of control were set by guild regulation. The journeymen were men who had finished their training as apprentices but could not attain the status of masters, the number of masters being limited.
The guild reflected a predilection for ordering society. Each guild set the terms of its craft: the forms of labor, standard of product, and methods of sale. With the rise of nationalism in the West, those things were increasingly subject to royal and national law. The relationship of the feudal ruler to the guilds was ideally one of cooperation. Actually the wealthy guilds were able to gain some immunity from interference by noble or king either by paying them large sums of money or by intimidating them. Sometimes, as in the weaving towns of Flanders, the guilds led revolts against feudal authority (e.g., in Bruges and Ghent). The tendency in the industrial towns was for the guilds to assume dominance in municipal government, and traces of that control have persisted in the local governments of Western Europe. The guilds of London (see livery companies) had wide social obligations and prominence in the city government.
The strengthening of the power of nations in the 15th and 16th cent. tended to increase royal power, and the king in some instances was able to reduce the guilds to subservience. The improvement of communications, the expansion of trade, with the introduction of foreign-made goods, and finally the appearance of the capitalist and the entrepreneur hastened the end of the guild system. The guilds, with their rigorous controls and emphasis on stability and quality, were not equipped to cope with the expanding production of a more capitalistic age. They tended to guard their monopolies jealously and to oppose change.
As time went on, the guild system became increasingly rigid, and the trend toward hereditary membership grew very marked. Thus the development of new trade and industry fell to the capitalists, who adapted themselves to new demands in an age of exploration and expansion. By the 17th cent. the power of the guilds had withered in England, and their privileges were officially abolished in 1835. In France the guilds were abolished (1791) in the French Revolution. The German and Austrian guilds were abolished in the 19th cent. as were those in the Italian cities. In Eastern Europe guilds grew numerous in the great market cities, and the power of some long persisted, notably in Novgorod and Kraków.
Guildlike organizations of merchants and artisans have been known at various times in many parts of the world. Greek merchants' associations were of considerable significance in both the Hellenistic and Roman periods. Under the Roman Empire each provincial city had, as did Rome, its various collegia (some of which were clubs as well as economic guilds); Constantinople later had its efficiently organized corpora. Those guilds were continued in the East and in some of the cities of Italy, where they persisted at least until the 10th cent. Their effect on the creation of medieval guilds is debatable. Some scholars have found the origin of guilds in the old tribal or religious guilds of the Germans.
Elsewhere in the world associations of merchants and of artisans developed and followed a pattern similar to that of the medieval European guilds, flourishing as protective devices or as regulatory instruments of the state. The guilds of the Muslim Middle East developed in the 9th cent. and persisted into the 20th cent., although they never attained the political influence equivalent of those of medieval Europe. In India guilds were highly developed before the time of the Maurya empire, and they continued in existence long after British control was established. The history of the Indian guilds was closely tied in with the caste system. The guilds in Japan were opposed and weakened by the stronger medieval rulers, but they were later used as powerful regulatory devices; they were swept away in the Meiji restoration in 1868. Chinese guilds of unknown antiquity persisted as powerful bodies into the 20th cent.
See C. Gross, The Gild Merchant (1890, repr. 1964); L. F. Salzman, English Industries of the Middle Ages (new ed. 1964); H. Sée, Economic and Social Conditions in France during the Eighteenth Century (tr. 1927, repr. 1968); S. Kramer, The English Craft Gilds (1927); H. B. Morse, The Gilds of China (2d ed. 1932, repr. 1967); G. Unwin, Gilds and Companies of London (4th ed. 1963); G. Clune, The Medieval Gild System (1943); R. Mackenney, Tradesmen and Traders: The World of the Guilds in Venice and Europe (1987).
They grew out of protective cooperation between merchants and temples and shrines; merchants would travel and transport goods in groups, for protection from bandits and the vacillating whims of samurai and daimyo (feudal lords). They would also enter into arrangements with temples and shrines to sell their goods on a pitch or platform in the temple's (or shrine's) grounds, placing themselves under the auspices and protection of the temple or shrine. The word za, meaning seat, pitch, or platform, was thus applied to the guilds. The name may have also come, more simply, from the idea of merchants within a guild or association sharing a seat or platform in the marketplace.
The earliest za came into being in the 12th century, consisting not only of trade guilds, but also guilds of performers and entertainers. Even today, performers of kabuki and noh are in associations called za (see Kabuki-za). The za trade guilds appeared as a major force in the 14th century, and lasted in their original forms through the end of the 16th, when other guilds and trade organizations arose and subsumed the za. While no longer powerful in their original forms, it could be argued that the basic concept of the za, and most likely the same merchants running them, continued to exist as powerful agents in the market through to the 18th, going through many organizational and structural changes over the centuries, and eventually being eclipsed by other organizations like the ie trading houses. Though very powerful at times, and enjoying certain tax exemptions and other formal governmental benefits, it is important to note that the za, at least in their original forms, were never as official or organized as the medieval guilds of Europe.
However, it was not until the Muromachi period (1336–1467) that the za really came to be a significant presence in Japan's economic world. By this time, many more za had appeared, and were larger, more organized, and more well-connected with temples, shrines, and nobles. While many associated themselves with temples and shrines, many other guilds allied themselves with noble families, gaining protection in exchange for a sharing of the profits. For example, Kyoto's yeast-brewers were associated with the Kitano Tenman-gū shrine, and the oil brokers had the Tendai monastery of Enryakuji as their patron. The gold leaf makers of Kyoto placed themselves under the protection of the Konoe family, and the fishmongers under the Saionji, a particularly powerful and wealthy family, who earned two-thirds of the profits of Kyoto's fish markets from the arrangement.
During this period, agricultural and economic advancement and growth was quite rapid in the countryside, or "Home Provinces", and za began to conglomerate into groups organized by their locality, not by their trade. These rural za were generally associations of wealthier peasant farmers who combined to sell oil, bamboo, rice, or other agricultural products in bulk; they occasionally allowed urban brokers to join their guilds, to act as their proxy or guide in the city markets. However, in the large cities, where economic progress was occurring in a different way, za formed up, as might be expected, by trade, and began to concentrate themselves in small sections of the city. Ginza, meaning "silver za" (silver trade guild), in Tokyo, is one of the most famous place-names to reflect this activity, though the Guildhall area of London, on the other side of the world, is a perfect example of the equivalent English activity.
Towards the end of the Muromachi period, the za began to grow independent of the noble families, temples, and shrines they had placed themselves under, having grown large enough and powerful enough to protect themselves. This independence also allowed the za to further its own interests, namely profit; the za began to realize at this time that they had the power to alter market prices, and began to show signs of monopolistic activity. While most used their monopoly power only in retail sales of their particular trade good to consumers, some, such as the salt dealers of Yamato province, would purchase raw materials wholesale, entering arrangements by which they could deny other guilds and other merchants of these materials.
Though mostly independent from their former patrons, many guilds still engaged in agreements for protection with noble families on a one-time, rather than permanent, basis. However, their independence and increasing power earned many za political enemies; some from their former patrons. As the Muromachi period came to an end, in the late 15th century, other forms of economic associations arose which were less monopolistic, and which challenged the supremacy of the za.
The Ōnin War of 1467 plunged the country into a period of chaos and war, called the Sengoku period, which would last over 130 years. However, the za continued to operate, and perhaps became even more powerful as the ability to safely travel and transport goods across the nation became increasingly dangerous.
Towards the end of the 16th century, one hundred years into the Sengoku period, Oda Nobunaga briefly took command of the country, and established "free" markets and guilds, known respectively as rakuichi (楽市) and rakuza (楽座). These dealt a severe blow to the power and influence of the older, monopolistic za, but did not replace them. Several other types of trade associations came into being around this time as well; though it could be argued that they replaced the za, it seems more likely that the change was a more gradual, organic one, and that the za could be said to have continued to exist, just in new forms and with new names. One of the new types of organization was called nakama (仲間), or kabunakama (株仲間) when they were authorized by the Shogun. These groups were essentially guilds based on the idea of shareholding; each member of the guild owned a share in the total profits of all the guild's members. However, the shares were not transmissible, unlike in our modern stock market. Another type of trade group, called toiya (or tonya in Edo), served as wholesale merchants, focusing primarily on shipping and warehousing. At this time, Osaka came into its own as a great port, and eclipsed Kyoto as the nation's primary center of trade, contributing further to the downfall of the original za.
By the end of the Tokugawa period, the guilds, in these various forms, had gained a significant degree of legitimacy and power. In exchange for monopoly licenses and government support in other forms, the guilds shared a portion of the profits with the government. Employing a strongly centralized system, the za brought 90% of the nation’s silk processing to Kyoto by the 1720s. This centralization made monopolization of the industry far easier, and brought a significant wealth to the Kyoto government and to the merchant members of the various trade organizations.
Over the course of the 18th and 19th centuries, the trade guilds and associations, in all their various forms, changed over into more modern, and eventually Western, modes of business, giving rise to the zaibatsu and keiretsu monopolies of the 20th century. Some guilds were replaced, eclipsed, or destroyed. Others simply changed, gradually or rapidly, adopting new methods and modes of acting in the market, as technology and the general economic structure of the country changed.