Guest Post: A Non-Corporate Model for the Localized Economy: Guilds

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Guilds offer a dynamic, flexible model for relocalizing and reinvigorating local economies. 

The primary reason the U.S. economy is stagnating is that it is dominated by an increasingly dysfunctional Central State and the private cartels it protects. The solutions, therefore, cannot come from State central-planning or from global corporate cartels. The solution is to develop alternative models that reinvigorate the local, community-based economy and that leverage the new tools of productivity: the Internet, freely available software tools and new technologies such as desktop fabrication.


Though guilds have been around since ancient times, the Western model developed in the 1200s. The guild model is broadly based on mutual benefit and the conservation and sharing of applied knowledge. According to the Wikipedia entry:

An important result of the guild framework was the emergence of universities at Bologna, Paris, and Oxford around the year 1200; they originated as guilds of students as at Bologna, or of masters as at Paris.

While the Medieval guilds had an income-protection purpose much like a trade union or a cartel, modern incarnations of the model are aimed at serving both members of the guild and customers by establishing trusted information about local small-businesses.
To get a better understanding of the emerging guild movement in the U.S., I interviewed Mike Hartrich, guildmeister of the Santa Cruz Construction Guild(SCCG) in Santa Cruz, California.
1. What inspired you to start the Guild?
"I have always worked by word-of-mouth and never needed advertisement. The 'Great Recession' affected me personally in 2009 when the calls stopped coming in. That was a shock. I had been learning about online marketing so I looked into what was available for contractors to market their services online. I looked at Angie's List, ServiceMagic, Diamond Certified and others. These are all large national companies that use the power of computers to provide online referral services nationwide. Some do this better than others.
The bottom line is that while these companies focus on local business they themselves are not local. Construction is really a local business. You build up your business one job at a time through a growing referral network. Word-of-mouth is the essence of that.
Also, these companies are impersonal, not personal. They are not made up of people who connected through being part of the same community. They are strictly a business, and only secondarily concerned about the local area.
I decided to set up a local online referral site that would use the Internet to draw attention to the members. At the same time the focus would remain strictly local. That's how this adventure started. Little did I know what I got myself into. I had help from a webmaster and selected Wordpress as the platform so I could make changes myself. There was a lot to learn.
The basic principle is a LOCAL online hub for quality builders and constructions pros who are invited by REFERRAL.
The Santa Cruz Construction Guild (SCCG) grew quickly. We had our first meeting in March 2010 at Big Creek Lumber. Ever since then the guild has developed a life of its own. Members are getting leads and work. Not everyone, of course, but the site draws an average of 450 visits/week.
One of the main benefits is the ability for members to meet other good builders, subs and professionals. The members really like that. Our renewal rate is over 90%.
2. Please sketch out the basics of your Guild model for those of us who are unfamiliar with guilds.
Membership is based upon a referral. If the prospective member does not know an existing member then I check him out - contacting three recent clients, checking his status with the Contractors State License Board, look at his current web presence etc - and I refer him. This system has worked really well so far. As a member you get your own member page. This is customized with your text, images, videos logo etc. If you have a web site I usually copy, paste and edit from that. The end result is a custom one-page web site that gives you a real web presence as part of a quality trusted local group. If you have a web site then we link to it. Same for Facebook and Linked-in. Once you have your page you can invite testimonials from your past customers.
You also get signed up to our email list. This simple way of communicating with the members works really well. Members can ask questions, offer tips, look for help , buy/sell items, etc. I forward their email to the general membership. Right now the latest email covered the County of Santa Cruz late-fee structure and penalties for prior unpermitted work. I also got an email from a member who was told that he could not have his over-the-counter permit request approved for at least 52 days.....
These days if you don't have an online presence you get left behind. The guild uses the Internet to connect members with customers, as well as with each other.
I just started our Facebook strategy. This really is the ideal avenue for members to publicize their projects with images and posts, complain about the heavy-handedness of the County etc. I have a hunch that our Facebook strategy will be quite popular with the members.
I just checked the Facebook status of the 163 members of the Santa Cruz Construction Guild (SCCG). 60 have Facebook business pages and over 103 do not. Of the 60, only five or six are actually using them. So this is an area where the Guild can help build their business presence for next to free.
The cost for membership is currently $240/year with a $60 discount in place right now. I intend to keep it as low as possible because even at that it's expensive for some members. Everyone is watching their nickels these days. My intention is to give members the best possible deal for their money.
We also have meetings. These are usually held at Big Creek Lumber, a local family-owned yard. There is a natural alliance between the guild and the local lumberyards. I intend to build on this alliance. Members like these meetings. They are a good way to meet your peers. We also have had meetings held at member offices. The topics of the meetings vary. Recent meetings covered construction financing ( at Lighthouse bank ) waterproofing details at Myles F. Corcoran Construction Consulting, Building Science by Scott Milrod, etc etc.
Over the past three years the guild has taken on a life of its own. We have good local press. We've been featured five or more times in the local paper (see our media page). We now have hats with the guild logo, bumper stickers, etc. Members like that.
I set up a member-referral program that rewards members $60 for each new member they bring in. But almost no one has used this. It doesn't seem to be a big driver. Big Creek Lumber used this for our charity drive and is donating these to Second harvest Food Bank.
3.How is the Guild’s model different from the national/commercial “contractor referral/recommendation” services?
We use the Internet & computer to create an online presence. But this presence is a reflection of a very real local presence. That's what makes the guild different. It's all based on real local people, local reputations, local histories. We all need an online presence these days. Customers want to check you out first. That's what all the big online services offer.
Angie's List is good. Yelp is questionable, Diamond Certified is expensive - $7,500/year - SeviceMagic charges for leads, etc etc. They can be useful. It's not an either/or choice. You could subscribe to one or all of these. I want to make the guild so valuable to the members that it becomes the foundation of their online presence.
We also started a Member Recommended Services. These are local companies that provide our members with a 10% discount. This is a new service/feature.
4. Do you see the Guild as part of the “relocalization” movement which seeks to emphasize the local economy rather than the global-corporate economy?
Yes, I certainly do. Members love the LOCAL focus of the guild. That's what makes it work.
5. The risk in any recommendation/referral model that is open to the public such as Yelp is that one customer can unjustifiably damage the reputation of a contractor/service. On the other hand, customers need to be confident that comments from previous customers haven’t been screened to hide legitimate complaints. How does the Guild manage feedback from customers and members?
A customer makes a bad comment on a member's page. I get to see that that before it gets published. I send the comment on to the member and ask for hi s side of the story. So far all three cases have been resolved quickly this way. I published one complaint in order to get a quick response from the member. That happened. Amazingly, we have had only three complaints in three years. Two of them were old grudges - 3-5 years old. Not much you can do about that. They preceded the guild so I did not leave them published. One member did not renew because of that. The third complaint was for a missed appointment. The member contacted the customer and made it right.
Any member who is a bad apple will not remain a member for long. Membership is not a right, it's a privilege. If you mess up seriously you won't be a member for long.
6. Is the Guild model one that you believe can be duplicated elsewhere in the nation?
That's the challenge. Chad Cornette, an architect-builder in Green Bay WI contacted me after our first big newspaper article about two years ago. We started the Green Bay CG a little over a year ago. I quickly realized that any expansion required a huge expenditure of energy and back-end infratructure: Shopping Cart, CRM module, SEO, email, web site replication, etc etc etc. AAAAaaargh.
After a year-plus of working on this I have come full circle to my original assessment, but with a deeper understanding. The key to duplicating this model lies in each community. I can provide the template, the model, the 'business-in-a-box', the back-end IT, etc. But I cannot make the local connections because I'm not a local.
That connection requires a local lumberyard, to act as the hub, AND, primarily, a local 'guildmeister' to build the membership. That is the hurdle. So now I am thinking of how to attract the right kind of guildmeisters who want to do this in their community. They get compensated between $60 - $100 for each member renewal.
150 members x $100 = $1,5000/year or $1,250/month. That is not a full time income, but a comfortable extra income for doing very part-time work in your existing field of business.
I'd like to see guilds grow in all kinds of places across the country. It's a good model. I'd like to be able to offer group business and health insurance to the members once we get large enough."

Thank you, Mike, for sharing your experience in building and expanding a local guild model that can be copied in other locales. Guilds, like co-operatives, are an extremely flexible model that could be extended beyond craft guilds.

One sure way to improve the local economy is to keep more of the community's income in the community itself rather than send it to distant corporate cartel headquarters. Guilds can play a dynamic role in that relocalization movement.

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Undecided's picture

Hey Tyler we going to put up a link we can drink to for the third party debate :)

3rdgrader's picture

This article is a fucking joke. What, are all you Zerohedger's retarded or just experiencing severe cognitive difficulty? Shame on you Tyler for spouting out more and more propaganda like this. Guilds my ass.

 End the Fed, that's more like it.

Skateboarder's picture

A true guild needs no entry fees. This guy's just tryna make some dough.

mikla's picture

The "guild-model" merely provides a vetting mechanism by which the "members" have a process to ensure quality.  It's the same thing as a "BBB", and that costs money (to join) also.

The "days-of-old" guilds got powerful because they "locked-out" competition -- they owned all the IP and resources, and you had to go-to-the-guild to get what you needed (e.g., publisher-guilds owned all the copyrights, construction-guilds disallowed work for anyone not-in-the-guild).

However, these voluntary associations merely provide value-added "vetting" to benefit the consumer for protection against "fly-by-night" operations, and benefit the business for economies-of-scale associations (e.g., referrals, shared services, etc.)

otto skorzeny's picture

actually a horrendous model of a guild is a result of the Davis-Bacon Act with all parties involved with Fed-funded road-building are dictated the price of labor on the project and that results in a few number of jumbo sized road-builders. want to know why it costs billions to pave roads-thank your $50-an-hour($80w/benis) highly skilled roller operator/guild member.

mikla's picture

Agree with your complaint, but I'd call that particular example "oligopoly-with-illegal-collusion".

True, guilds in the past did that too (e.g., price-fixed), because they controlled all labor in their field (the guilds became too powerful).

However, the self-policing voluntary association "guild", that could not control the supply-of-labor/talent, would be positive for everyone.

Alea Iactaest's picture

If guilds are the answer then guilds will not succeed. They will be eliminated either by decree (legislation and/or regulation), or driven out of business, or they will grow to compete with the corporate cartels that inspires them.

If we're looking for alternatives then why not a kibbutz? Oh wait, that inspired a certain Russian, which inspred a certain Chinese... and how did that workers' paradise turn out?

FreeMktFisherMN's picture

I'm all for voluntary associations that people join to inquire about new skills and signal that they are talented in their field. I am against all enforced at the point of a gun licensure, which is just pure rent-seeking. If there is a private organization that has a great reputation such that not joining it hampers someones' employability, then so be it. In a real free market there would be ratings agencies and voluntary associations that help people assess. This is in constrast to the status quo fearmongering of 'caveat emptor' that bureaucrats use to fear people into 'security'  seeking such that they go for the FDA and all these licensure requirements to practice in a field. Let the free market flourish. 

NotApplicable's picture

Well, true guilds held their value in IP secrecy, so it's hardly a comparison. It comes down to the idea that you get what you pay for. In this case, paying members are likely active members.

Otherwise, you end up with Craigslist, where value exists, but immersed in a sea of noise.

Raymond K Hessel's picture

Skatborder, you work for free?  


Why should he? Answer, he shouldn't.


He's providing a valuable service, helping to make a market.  

Handyman's picture

The 100 mile economy?

alstry's picture

The primary reason the economy is failing is efficient technology is replacing the need for most industrial jobs....especially financial services.

Without jobs banks can't lend and bankrupt governments/students are the only ones they can milk in the

mikla's picture

Jobs have almost nothing to do with the economy, just as (income-)taxes have almost nothing to do with government spending.

In this sense, the "economy" is defined by (1) collateralization, and (2) leverage.

And, both of those are failing.

It has nothing to do with "workers", except, of course, that there are no jobs because it makes no business sense to be in business under the current market-distortions.

alstry's picture

If we don't come up with a new system soon, the only choice left will be milk each other.

It's not debt/money we want, it's the production money/debt controls. Now technology is increasingly replacing the industrial production of people....people better start thinking about a new game to play....because the bankers game is about over.

delacroix's picture

@ alstry. the primary reason the economy is failing, is corruption, effecient corruption.

otto skorzeny's picture

this article is bullshit. guild is just another word for trade union and price-setting. It failed in the middle ages and is failing in the US in unionism(especially with public unions that have no competiotion). Crony capitalism comes to mind also as the prices for many things are agreed upon in advance and price discovery(an antiquated notion in this day of QEInfinity) is non-existent.

Dr. Engali's picture

+1 Charles likes to pretend that he's not a statist , but all of his " solutions" have a statist flavor.

Manipuflation's picture

+1 to both of you.  This article is ridiculous.  We already have the SAG(screen actors guild); look at all of the "quality" products that they have produced for the consumer over the years.  Propaganda.

However, this statement really kills me,

"An important result of the guild framework was the emergence of universities" 

Did I miss the statement on the effects of having tenured faculty somewhere?

Are we to imply that another important result was to be staggering student loan debt?  I realize that I am oversimplifying the timeline here but it is clear that guilds, unions and their incarnations are nothing more than a populist racket bent on distorting prices and discouraging, or even making illegal, a free and competitve market for goods or services.

I would like to shop around for cheaper electrical service to my residence; how far do you think I will get with that?  Interesting question, no?

Widowmaker's picture

The entire foundation of central bank (Wall Street) racketeering, TODAY, is the central bank monopoly guild.

ChacoFunFact's picture

By extention then this guild and all others should issue their own currency.

Winston Churchill's picture

Trade guilds were the nucleus of most European citys.

They were not cartels at all ,but free associations of competing members of a similar trade.

The twelve medieval trades often acted together to provide infrastructure to develop towns as

hubs of commerce.

Although many are anarchronisms now the twelve Guilds still exist and still own the land in the

center of cities like London,Liverpool,Leeds and Manchester in th UK for example.

These guilds formed the first corporations,long before the modern meaning of that word.

Hence the common misconception among some ZH posters,about the City of London Coroporation.

Corporation was the word then that we would denote now by council.It was common 30 years ago in vernacular

English to say one worked for the corporation,instead of council,no matter which town you worked for.

Correction , and history lesson over..

Manipuflation's picture

With all due respect WC, I do believe that Otto effectively qualified in his post that we are talking about the US in this instance and was not making a broad macro assertion.

"is failing in the US"

Winston Churchill's picture

With all due respect to you.Re read his post.He state that medieval guilds had failed.

Was not awre that the abooriginal natives of the US used them.Therefore he was refering to Europe.

He was just plain wrong anyway.

Sorry if I got on a hobby horse,but I've had some heated exchanges with ZH posters about

guilds,and specifically CoL,so I preempted their inevitable  posts.The fact that they know nothing of their own

history,never ceases to stop them posting on others.

illyia's picture

People are ignorant of the history that lead to this entire mess. That guilds were fundamental organizing units of like-minded crafts men or any division of occupation is just history. If we encounter the "inevitable collapse" then they will surely emerge in local areas whose needs will be served by them. That's just logical. For all the obvious reasons.

It really does not matter what anyone thinks about it. But it is interesting that the subject is coming up right now.

Manipuflation's picture

Duly noted WC and I appreciate your honest candor regarding our current discourse.  I would only like the opportunity to posit an observation accompanied by a rhetoricial question or two regarding your assertion that in fact:

"Was not awre that the abooriginal natives of the US used them."

That statement, Sir, is debatable in several ways.  i.e. How do we know that a tribe was/is not a guild itself?  What constitutes a tribe/guild and why is it any different from a gang?  Have we progressed as humanity as far as we assume ourselves to be as a result of guilds or have we degraded?

I sincerely doubt that we have i-progressed nearly as far as we think we have and taking a look back into the past is an excellent idea for future guidance.  It is a matter of how to intrepret the historical data that becomes the debatable issue.  It bears noting, however, in times precedent to our own, there were also a great deal of implausible, impractical, unpracticible and unconscionable theories prevalent, some of which have survived to current ill effect.

For your part, I do concede that Otto did in fact mention, as you state ver batim, "He state that medieval guilds had failed."[sic]. I apologize for the lack of clarity on that issue.

SelfGov's picture

Upvoted all of you for the fantastic discussion.

Manipuflation's picture

Thank You SelfGov.  If only we had a ZH backboard where the finer points of an issue could be discussed and debated after intitial board exposure rather than trying to rely on a clever one line sentence to form both an argument and conclusion.  Perhaps one day that option will occur and I do believe that many folks on ZH would enjoy such a feature.  Hey, look at that, there is a "forums" tab, in between the ZH-tshirts that are always out of stock and the archives tab.  It appears that I can make $82 an hour.

Heyoka Bianco's picture

"The main functions of the merchant guild were to maintain a monopoly of the local market and to preserve a stable, non-competitive economic system. To accomplish these ends the guild severely restricted trading by foreign merchants in the city, guaranteed every member the right to participate in every purchase of goods made by any other member, required all of its members to charge uniform prices for the things they sold, drastically punished cornering of the market, and prohibited many forms of advertising. In some case these rules were enforced by municipal authorities, since the leading members of the guild were frequently the most powerful official of the town corporation (Ed.-sound familiar?); but in other cases the methods used were more direct. An English herring merchant complained that 'because he sold his merchandise at a less price than other merchants of the town of Yaxley . . . they assaulted him, beat him and ill-treated him and left him there for dead, so that he despaired for his life.'*" - Western Civilizations: Their History and Their Culture, Frances McNall Burns (p. 325)

"The guilds themselves came to be dominated by the richer members, who endeavored to restrict their particular crafts to their own families. As a result, the great mass of the workers were reduced to the level of the proletarians, doomed to remain wage earners as long as they lived." ibid., p. 326

Basically, guilds were the local mob, and turned shortly into a top-heavy, restrictive-entry legalized monopoly. Now that's a history lesson .

*Quoted by Ephraim Lipson, Economic History of England, Vol. I, p. 146

JOYFUL's picture

good stuff///

and that's just the tip of the iceberg!

Whilst Charles performs his 'death spiral' of rapid descent into complete irrelevance, and Winston rants and rides his hobbyhorse through the crowd of riotous readers like some kind of demented Hussar of the COL Queen's Own Heavies, cooler heads merely refer the audience to the modern day evolution of said phenomena...

wherein beatings and monopolistic machinations are given new meaning through the 'Worshipful Guilds' rackets, and a cabal of sionist controlled lackeys run amok through the polity of the western world....

cf....Lesbian Cults, Pedophile Oaths and Guilds of Patented Field McConnell(available for free reading online)

...and the whole wild n wacky world of modern day extortionism, from Pickton's Pig Farm to Obama's bath house to Camerons' UK guilded gulag! 

The livery companies of the city of London: their origin, character, development, and social and political importance (1892)Hazlitt

Dual to the Death tween Otto n the Churchillian, a al Slewie style!(where is that guy lately?)


falak pema's picture

well said, we see it all the time in France, the local guilds are hot beds of local oligarchy corruption.

No, the Internet age, if it stays free and non encroached by dominant Oligarchy plays, will bring a lot of local business on a direct peer to peer networking basis. If technology and innovation stay the building blocks of new socio-economic constructs, the individual entrepreneurs can emerge in local economies where the global oligarchs have no hold; as their philosophy is totally alien to responding to local needs; it is imposing top down what the global corporate WANTS to sell, not what the people want to buy for their own survival and economic wellbeing.

With the corporate oligarchs its always hidden persuaders, media shills and political shills called lobbyists; and resulting regulatory capture at national or regional level; that allows them to impose thier rules locally thru legislation and crony government protection, and then corrupt law-court expediency and repression of contention. 

Regulatory capture, the deadly strategy that allow the hidden persuaders to achieve their corpocratic aims...without cleaning out the local government instances and pin pointing the strategy of the oligarchy predators and oppressors, all local action becomes futile. 

I don't know if cooperative capitalism based on Internet networking in an open market environment will not be the solution. But one step will be to move away from national klepto banking and creating a cooperative banking system that encourages full reserve banking, based on tangile assets. We have a long hard road to reconstruct a new capital-labour model.

Just Ice's picture

city councils...the pettiest busybody governments of all (in US)

Harbanger's picture

Whatever you want to call it, Guilds led to unions and modern socialism. Medieval Guilds were members only craftsmen clubs which they used to control a given market. The only way into a guild was nepotism or favors.

Manipuflation's picture

Agreed Harbanger.  Another interesting dilemma to consider is exactly when, and which, guilds started to exert undue political influence and therefore distortion of markets towards their favor by diktat. 

The Alarmist's picture

Gee, whodathunk we might try capitalism with free and fair exchange rather than oligopoly?

Widowmaker's picture

Capitalism is dead and Uncle Corruption Inc will keep it that way.  The war is over and the "individual" lost.

Mark to fuckall accounting is your fascist indicator.

Tenshin Headache's picture

Good on you for doing this, and continued success with the idea. "Keep it local" is going to be even more important going forward, I suspect. And what a great way to build community. Cheers!

Freewheelin Franklin's picture

I think they already have something like this. It's called the Freelancer's Union. They call it the "New Mutualism".

molotov's picture

I have been lurking around here since zerohedge was on blogger... and no molotov is not my first username. One thing is abundantly clear, you morons still have a love affair with kapitalism. FUCK CAPITALISM! IT IS DEAD. In a hundred years it will only be found in history books as a quaint notion embraced by greedheads with unsatiable need. It should be treated as a mental illness.

thomasincincy's picture

I've got this strange feeling a lot of powerful people have been lied too

NidStyles's picture

Yes, we understand, you enjoy being a slave.

Freewheelin Franklin's picture

In 100 years I won't be here, and neither will you, most likely. But if you really want to do something, drop that antiquated Marxist shit. Marx was wrong on several levels from economics to class structure. Move into the 20th and 21st centuries and start reading people like Sam E Konkin III, Karl Hess, Sheldon Richman, Roderick Long, Jeffrey Tucker and Gary Chartier to name a few. Chartier has a new book coming out next month about anarchy and law. Free markets are the new anti-Capitalism.

Widowmaker's picture

Central planned Fascism is your almighty capitalism.

rustymason's picture

Comrades, if it pleaseth the committee, I move we elect a new king.

dlc's picture

The Wikipedia article at describes the history of guilds vis-à-vis corporations, cottage industry, etc., and helps put the pros and cons of this approach into perspective.

WhiteChrist's picture

It is best for the Banded Rikes, as for all others, that the worths of things be set, not by free cheapings, true keeps and sales or the like, but by the great men of midmost steering. Stand not in the way as the Lord maketh inroads towards true and full fellowship in the new world, nor seek to fight against Him. Take thine eeth in thine inn while the dimwits and dolts outdoors talk needlessly on freedom, selfhood, hard work, thought and other such cow's dung. The aftertide is fully in the hands of the Lord, and His true fellows shall be taken care of.

Dr. Sandi's picture

The Lullabye League will take watchful care of the Sheeple!

Disenchanted's picture



How about the Mondragon Cooperative(or Corporation) model of the Basques? Good for regional economies...?


Mondragon: Reclaiming Regional Production Capacity
rsnoble's picture

Won't DC and WallStreet have to be nuked first before we can worry about local economies? It's hard to try and take care of your own when you keep getting things like huge IRS bills stuck up your ass.