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First, let's take a look at what a "guild" is.
A guild is a sort of like a labor union but more specific. It is a group of people who all practice the same job, such as barber, shoemaker, or blacksmith, and these people join together in what amounts to a club to work toward advancing the interests of their profession.
To call it a union, though, misses some of the mystique, and to call it a "club" negates some of its power. Guilds were powerful bodies that often had secret rites and practices. The guilds were able, in many cases, to form powerful monopolies that protected members from competition through legal recourse or thuggery. They strictly controlled entry into their respective professions, ensuring competition wouldn't get too fierce. The guilds also acted like a fraternity in that the members came to defense of other members in social/legal matters.
Guilds were able to control trade in their regions the same way monopolies do. Guild members, properly initiated, made certain that all practice of the craft within a particular city was handled by guild members. This kept profits stable by reducing competition. It greatly benefited established members and made it difficult to enter into particular lines of work in guild-controlled areas.
The guilds were largely focused in populated areas. The countryside, where demand was lower and fewer craftsman were available, were largely "guild-free." Some cities, too, did not allow the creation of guilds. Because of their profit-making capabilities, though, guilds were often given official support from the government in return for financial consideration.
The church, in particular, was not particular fond of guilds (though, ironically, the two had many things in common.) The church did not like the mystical elements of the guilds, their use of symbols, or their hedonistic get-togethers.
Though most people object to guilds as self-serving and a deterrent to innovation, others believe that the guilds established groups that could share technology, techniques, set craftsmanship standards, and "buy in bulk." This group would also say that the guilds were able to establish comprehensive programs for apprenticeship that kept these professions stable, even during difficult times.
Either way you look at it, guilds were powerful forces that greatly impacted the economies they operated in.
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