Sunday, July 20, 2008

Incorporated Guilds were not Forerunners of Businesses

Ian Williams in the Deadline Pundit Blog (HERE)

“The Barbarians are no kind of solution
Boycotting big business

Private equity firms have become rich at the expense of workers everywhere. It's time to recognise their sins:

“Adam Smith's "invisible hand" is much quoted. However, he also knew what happened when businesspeople meet behind closed doors

People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices.”


Comment
Misleading inference. These were not ‘business people’ as we know them today. They were members of the Incorporated Trades established by law in each town and city who had a legal monopoly on who could make or sell the goods of their trade, be it weaver, linen maker, butcher, baker, brewer, salter, instrument maker, blacksmith, forger, carpenter, wheel-maker, cabinet maker, carriage maker, knitter, knife sharpener, milliner, and such like, all of whom who had to have serviced the requisite apprenticeship with a master resident in the town or city. In short petty shopkeepers, mainly run by tradesmen, artisnas and labourers.

These were the town Guilds, established in Elizabethan times and their nearest modern equivalent is in modern Guilds (Screen Actors Guild) and skilled trade unions, not business people. They set prices and other restrictions to narrown the competition from other towns and excluded from employment anybody not already recognised as such who might arrive from elsewhere.

The Glasgow Incorporated Trades prevented James Watt (who served his apprenticeship elsewhere) from trading as a ‘mechanic’ in 1761 (he was born in nearby Greenock) anywhere the town. He was saved from unemployment by Glasgow University and employed as an ‘instrument maker’. The University just outside the Glasgow city boundary was legally exempt from their jurisdiction.

The University’s model Newcomen Steam Engine broke and Watt was asked to fix it; he did, and went on to design and make major improvements to it, securing his invention by patent and from that work entered business to make commercial steam engines. The rest is history.

On the Senate at the time was Adam Smith who supported Watt's appointment and who opposed monopoly restrictive practices preventing workmen engaging in any trade they wished.

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