Max Weber



from General Economic History, by Max Weber, trans. by Frank H Knight, Ph.D., Greenberg, Publisher, 1927




The disintegration of the guilds, which took place after the close of the Middle Ages, proceeded along several lines. 1. Certain craftsmen within the guilds rose to the position of merchant and capitalist-employer of home workers, i.e. of "factor" (Verleger). Masters with a considerable invested capital purchased the raw material, turned over the work to their fellow guildsman who carried on the process of production for them, and sold the finished product. The guild organization struggled against this tendency, but none the less it is the typical course of the English guild development, especially in London. In spite of the desperate resistance of the guild democracies against the "older men," the guilds were transformed into "livery companies," guilds of dealers in which the only full members were those who produced for the market, while those who had sunk to the level of wage workers and home workers for others lost the vote in the guild and hence their share in its control. This revolution first made possible progress in technique, whereas the dominance of the guild democracies would have meant its stagnation. In Germany we do not meet with this course of development; here if a craftsman became an employer or factor he changed his guild, joining that of the shopkeepers, or merchant-tailors or constablers, a guild of upper class importing and exporting merchants. (153)

2. One guild might rise at the expense of another. Just as we find trading masters in many guilds, others changed entirely into mercantile guilds, foreign. the members of other guilds into their employ. This was possible where the production process was transversely divided. Examples are found in England-tile merchant tailors - and elsewhere. The 14th century especially is filled with struggles of the guilds for independence of other guilds. Frequently both processes run along together; within the individual guild, certain masters rise to the position of traders and at the same time many guilds become organizations of traders. The symptom of this eventuality is regularly the fusion of guilds, which took place in England and France but not in Germany. Its opposite is represented by the splitting of the guilds and the union of the traders, especially common in the 15th and 16th centuries. The dealers within the guild of walkers, weavers, dyers, etc. form an organization and in common regulate the whole industry. roduction processes of diverse cliaracter are united on the level of small shop industry. (153, 154)

3. Where the raw material was very costly and its importation demanded considerable capital, the guilds became dependent upon the importers. In Italy, silk gave occasion to this development, in Perugia, for example, and similarly for amber in the north. New raw materials might also provide the impetus. Cotton worked in this way; as soon as it became an article in general demand, putting -out enterprises arose along side the guilds or through their transformation as in Germany, where the Fuggers took a notable part in the development. (154)

4.The guilds might become dependent upon the exporters. Only in the beginnings of the industry could the household or tribal unit peddle its own products. As soon, on the other hand, as an industry became entirely or strongly based on exportation, the factor-entrepreneur was indispensable; the individual craftsman failed in the face of the requirements of exportation. The merchant, however, possessed not only the necessary capital but also the requisite knowledge of market operations - and treated them as trade secrets. (154, 155)

The textile industry became the main seat of the domestic system; here, its beginnings go back into the early middle ages. From the 11th century on there was a struggle between wool and linen, and in the 17th and 18th centuries between wool and cotton, with the victory of the second in each case. Charlemagne wore nothing but linen, but later, with increasing demilitarization, the demand for wool increased and at the same time with the clearing of forest the fur industry disappeared and furs became constantly dearer. Woolen goods were the principal commodity in the markets of the Middle Ages; they play the leading role everywhere, in France, England and Italy. Wool was always partly worked up in the country, but became the foundation of the greatness and the economic prosperity of the medieval city; at the head of the revolutionary movements in the city of Florence, marched the guilds of the wool workers. Here again we find early traces of the putting-out system. As early as the 13th century independent wool factors worked in Paris for the permanent market of the Champagne fairs. In general we find the system earliest in Flanders, and later in England, where the Flanders woolen industry called forth mass production of wool. (155)

In fact, wool determined the course of English industrial history, in the form of raw wool, partial products and finished goods. As early as the 13th and 14th centuries England exported wool and partial manufactures of wool. Under the initiative of the dyers and made-up clothing interests, the English woolen industry finally became transformed tothe basis of exportation of finished products. (155, 156)

The peculiar feature of this development is that it resulted in the rise of domestic industry through the rural weavers and the town merchants. The English guilds became predominantly trading guilds, and in the final period of the middle ages attached to themselves rural craftsmen. At this time the garment makers and the dyers were settled in the towns, the weavers in the country. Within the city trading guilds broke out finally the struggle between the dyers and garment makers on the one hand and the exporters on the other. Export capital and merchant-employer capital became separated and fought out their conflicts of interest within the woolen industry under Elizabeth and in the 17th century, while on the other side employer capital had also to contend with the craft guilds; this was the first conflict between industrial and trading capital. This situation, which became characteristic of all the large industries of England, led to the complete exclusion of the English guilds from influence on the development of production. (156)

The further course of events followed different lines in England and France as compared with Germany, in con sequence of the difference in the relation between capital and the craft guilds. In England, and especially in France, the transition to the domestic system is the universal phenomenon. Resistance to it ceased automatically without calling forth interference from above. As a result, in England after the 14th century, a small master class took the place of the working class. Precisely the opposite happened in Germany. In England, the development just described signified the dissolution of the guild spirit. Where we find amalgamation and fusion of various guilds, the initiative proceeds from the trading class, which was not to be restrained by guild limitations. They united within the guilds and excluded the masters without capital. Thus formally the guilds maintained themselves for a long time; the suffrage of the city of London, which was nothing but an organization of wealthy dignitaries, was a guild survival. (156, 157)

In Germany, the development proceeds in reverse order. Here the guilds more and more became closed groups in consequence of the narrowing of the field of subsistence policy, and political considerations also played a part. In England there was wanting the particularism of the towns, which dominates the whole of German economic history. The German town pursued an independent guild policy as long as it could, even after it was included in the territorial state of a prince. By contrast, the independent economic policy of the towns ceased early in England and France, as their autonomy was cut off. The English towns found the path to progress open because they were represented in Parliment, and in the 14th and 15th centuries in contrast with later times - the overwhelming majority of the representatives came from urban circles. In the period of the Hundred Years War with France, the Parliament determined English policy and the interests brought together there pursued a rational, unitary industrial policy. In the 16th century a uniform wage was fixed, the adjustment of wages being taken out of the hands of the justices of the peace and given to the central authority; this facilitated entry into the guilds, the symptom of the fact that the capitalistic trading class, who predominated in the guilds and sent their representatives to parliament, were in control of the situation. In Germany, on the other hand, the towns, incorporated in the territorial principalities, controlled the guild policy. It is true that the princes regulated the guilds in the interests of peace and order, but in the large their regulative measures were conservative and carried out in line with the older policy of the guilds. In consequence the guilds maintained their existence in the critical period of the 16th and 17th centuries; they were able to close their organization, and the stream of the unchained forces of capitalism flowed through England and the Netherlands, less strongly even through France, while Germany remained in the background. Germany was as far from the position of leadership in the early capitalistic movement at the close of the middle ages and the beginning of the modern era as it had been centuries before in the development of feudalism. (157, 158)

A further characteristic divergence is the difference in regard to social stresses. In Germany, from the close of the middle ages on, we find unions, strikes and revolutions among the journeymen. In England and France, these became more and more rare since in those countries the apparent independence of the home-working small masters beckoned to them and they could work immediately for the factor. In Germany, on the contrary, this apparent independence was not available as there was no domestic industry, and the closing of the guilds established a relation of hostility between the masters and the journeymen. (158)

The pre-capitalistic domestic industry of the west did not develop uniformly, or even as a rule, out of the craft organization; this occurred to the smallest extent in Germany and to a much greater extent in England. Rather it quite commonly existed side by side with craft work, in consequence of the substitution of rural craft workers for urban, or of the fact that new branches of industry arose throuch the introduction of new raw materials, especially eotton The crafts struggled against the putting-out system as long as they could, and longer in Germany than in England and France. (158, 159)

Typically, the stages in the growth of the domestic system are the following: 1. A purely factual buying monopoly of the factor in relation to the craft worker. This was regularly established through indebtedness; the factor compels the worker to turn over his product to him exclusively, on the ground of his knowledge of the market as merchant. Thus the buying monopoly is connected with a selling monopoly and taking possession of the market by the factor; he alone knowing where the products were finally to stop. 2. Delivery of the raw material to the worker by the factor. This appears frequently, but is not connected with the buying monopoly of the factor from the beginning. The stage was general in Europe but was seldom reached elsewhere. 3. Control of the production process. The factor has an interest in the process because he is responsible for uniformity in the quality of the product. Consequently, the delivery of raw material to the worker is often associated with a delivery of partial products, as in the 19th century the Westphalian linen weavers had to work up a prescribed quantity of warp and yarn. 4. With this was connected not infrequently, but also not quite commonly, the provision of the tools by the factor; this practice obtained in England from the 16th century on, while on the continent it spread more slowly. In general the relation was confined to the textile industry, there were orders on a large scale for looms for the clothiers who turned them over to the weavers for a rental. Thus the worker was entirely separated from the means of production, and at the same time the entrepreneur strove to monopolize for himself the disposal of the product. 6. Sometimes the factor took the step of combining several stages in the production process; this also was not very common, and was most likely to occur in the textile industry. He bought the raw material and put it out to the individual workman, in whose hands the product remained until it was finished. When this stage was reached the craft worker again had a master, in quite the same sense as the craftsman on an estate, except that in contrast with the latter he received a money wage and an entrepreneur producing for the market took the place of the aristocratic household. (159, 160)

The ability of the putting-out system to maintain itself so long rested on the unimportance of fixed capital. In weaving, this consisted only of the loom; in spinning, prior to the invention of mechanical spinniny machines, it was still more insignificant. The capital remained in the possession of the independent worker, and its constituent parts were decentralized, not concentrated as in a modern factory, and hence without special importance. Although the domestic system was spread widely over the earth, yet this last stage, the provision of the tools and the detailed direction of production in its various stages by the factor, was reached comparatively seldom outside the western world. As far as can be learned, no trace whatever of the system survived from antiquity, but in China and India it was present. Where it dominated, craftsmen might none the less in form continue to exist. Even the guild with journeymen and apprentices might remain, though divested of its original significance. It became either a guild of home workers - not a modern labor organization but at most a forerunner of such, - or within the guild there might be a differentiation between wage workers and masters. (160)

In the form of capitalistic control of unfree labor power, we find house industry spread over the world, as manorial, monastic and temple industry. As a free system it is found in connection with the industrial work of peasants; the cultivator gradually becomes a home worker producing for the market. In Russia especially, industrial development took this course. The "kustar" originally brought only the surplus production of the peasant household to market, or peddled it through third parties. Here we have a rural industry which does not take its course toward tribal industry but goes over into the domestic system. Quite the same thing is found in the east and in Asia, - in the east, it is true, strongly modified by the bazaar system, in which the work place of the craftsman is separate from his dwelling and closely connected with a general centralized market place in order, as far as possible, to guard against dependence on the merchant; to a certain extent this represents an intensification of the medieval guild system. (160, 161)

Dependence of urban as well as rural craft workers upon an employer (factor or "putter out") is met with. China especially affords an example, though the clan retails the products of its members and the connection with clan industry obstructed the development of domestic industry. In India the castes stood in the way of the complete subjugation of the craftsman by the merchant. Down to recent times the merchant was unable to obtain possession of the means of production to the extent we find true elsewhere, because these were hereditary in the caste. None the less, the domestic system in a primitive form developed here. The last and essential reason for its retarded development in these countries as compared with Europe is found in the presence of unfree workers and the magical traditionalism of China and India. (161)