This paper examines recent attempts to rehabilitate pre-modern craft guilds as efficient economic institutions. Contrary to rehabilitation views, craft guilds adversely
affected quality, skills, and innovation. Guild rent-seeking imposed deadweight losses on the economy and generated no demonstrable positive externalities. Industry flourished where
guilds decayed. Despite impairing efficiency, guilds persisted because they redistributed resources to powerful groups. The ‘rehabilitation’ view of guilds, it concludes, is theoretically
contradictory and empirically untenable
