The Development of Unions

Disclaimer: These words are the author’s personal views and do not reflect the Labor Guild’s opinion.

I believe it’s essential for every union member to understand where labor unions originated, how they evolved into what they are today, and what responsibilities members have toward their livelihoods and their union. 

Historically, people have organized around shared issues, such as helping to honor and bury the dead or protecting ships and cargo from pirates at sea. 

Unions began as family bonds—relatives helping each other survive and protect one another in a harsh agrarian society. As tasks grew, families expanded their networks by connecting with other families, friends, or like-minded individuals with shared goals and societal interests. 

Formal craft guilds didn’t emerge until the end of the feudal system. Wars depleted agrarian farm workers, and poor harvests and plagues forced many into cities. Trade began to flourish, and skilled workers produced goods that were exported beyond their countries by the 1500s. Most significantly, workers started earning wages in currency rather than relying on barter or the goodwill of landowners. This marked the decline of feudalism and the birth of capitalism. 

Craft guilds were organized around specific trades, such as Blacksmiths, Bakers, Cordwainers (leatherworkers), Brewers, Woodworkers, Masons, and Fishmongers. Each guild had a Patron Saint and adhered to strict ethical codes governing members’ personal and professional lives. 

Craft guilds’ primary purpose was to protect the quality and reputation of their trade and its members. Strict rules regulated not only the progression from apprentice to craftsman but also members’ conduct. Expulsion could result from infractions such as excessive tavern-going, laziness, or disruptive behavior. 

To join a craft guild, a prospective member must have a basic aptitude in the craft and secure training under a master craftsman. 

Craft Guilds

Unions Today

The craft guilds of London managed the city’s local government, maintained law and order, elected the Mayor (known as the “Master of all Companies”), and acted as a judicial body. 

As mercantilism prospered, organized trade and taxation became necessary. The crown granted charters, often to the highest bidder, allowing certain monopolies to exist to maintain quality and regulate wages. Merchant guilds controlled industries and required all members to pay a tax, known as “Scot and Lot,” and swear an oath to follow guild rules—similar to union dues today. 

Sea trade opened new markets, and guilds financed early trade expeditions, such as the Merchant Adventurers’ venture to Germany and Holland in 1407—85 years before Columbus’s voyage. 

As trade infrastructure grew more complex, pooling capital became necessary to fund large projects like wharves and embassies. This marked the birth of corporations, which evolved from guilds. Essentially, unions are the older siblings of corporations, both born out of societal needs. 

The East India Company (EIC), founded in 1600, exemplifies the power corporations could amass. The EIC established private factories abroad, engaged in the opium trade, collected taxes, maintained its own judicial system, and even had a private army twice the size of England’s. Eventually, the EIC’s unchecked power led to its dissolution in 1874 after financial and humanitarian crises in India. 

Another example is the South Sea Company, created in 1700 to manage government debt. Stockholders speculated wildly on profits, leading to a financial collapse when returns didn’t meet expectations—an early case of over-speculation. 

Modern parallels include the Iraq invasion, when Vice President Cheney claimed oil revenues would cover costs, and the Virginia Company’s failed colonization of Jamestown, where thousands died, leading to its charter being revoked. 

These cases demonstrate the dangers of unchecked capitalism. While capitalism isn’t inherently bad, history shows it requires regulation to prevent exploitation. Our founding fathers recognized this and intentionally excluded corporations from the U.S. Constitution. State legislatures granted charters with strict oversight and limited terms. 

Corporations couldn’t buy shares in other companies or influence elections. Banking charters had short renewal periods, and corporations were barred from monopolistic practices like “limited liability.” This system ensured accountability and public interest. 

Today, the struggle between corporations and workers continues. The core issue is the disparity between production costs and selling prices. Corporations aim to maximize profits, while workers seek fair wages. Until capitalism is properly regulated, this conflict will persist. 

As I often say, there’s nothing wrong with capitalism that a strong dose of regulation can’t fix.