GUILD:THE ANCIENT INDIAN CORPORATE ENTITY
The ancient Indian corporate entity was known as guild. Literary evidence suggests that guilds existed in India as early as 800-1000 BC. A guild is an organisation of people who have the same interest or aims (Oxford Dictionary). It is an association of skilled workers who belong to the same trade, craft of industry.
To be successful, a business needs to pool resources and generate profits for shareholders. It must ensure economic and psychological well-being of employees, satisfaction of customers and happiness of society at large. For achievement of these goals various types of corporate entities like private limited company and public limited company prevail in current times. It may seem that the concept of corporate entity with features like separate legal entity, limited liability, perpetual existence, common seal have emerged from the Western world but study of ancient Indian literature reveals that corporate entities with all the present day features of a company were very much in vogue in India in ancient times.
The ancient Indian corporate entity was known as guild. Literary evidence suggests that guilds existed in India as early as 800-1000 BC. A guild is an organisation of people who have the same interest or aims (Oxford Dictionary). It is an association of skilled workers who belong to the same trade, craft of industry. China is believed to have this institution in 300 BC while in Germany and England such formations came into existence in the 10th and 12th centuries AD. The existence of terms like sreni, puga, gana, varta has been taken as the indicator of guilds in the Vedic period. Upnishadas (600 BC) also bear testimony to the existence of guilds. By the time of Buddhist scriptures guilds existed in every important town in respect of every important trade and industry. Gautam Dharmashastra and Jatakas have several details of guilds of traders, cultivators, headsmen, moneylenders and artisans. In Mauryan period, Kautilya’s Arthshastra and various rock edicts give details of organisation and working of these guilds. In post Mauryan period the guilds strengthened further and there are references to their frequent trade with Roman Empire in which Indian merchants earned huge profits.
These guilds followed the management principles of hierarchy, organisation and division of labour. They had a definite constitution with a president or a headman at the top and a small executive council to assist him. Head of guild was the elder, jyesthaka or Jetthaka. Moneylenders’ guild head was called shreshthi. The office of elder was usually hereditary and was held by one of the richest members of the guild. Some guilds attained great power and prestige and in all cases the head of the guild was an important personage in court. In the post Mauryan period, guilds controlled almost entire manufactured output. There used to be a treasurer (Bhandagarika) and superintendent of accounts (Keranika). The guilds had to be registered in the locality where they functioned and had to obtain permission from local authorities to change location. Government officials kept a check on their working. State collected taxes from guilds of cities while village guilds were some times exempted.
The guild united both the craftsmen’s cooperatives and individual workmen of a given trade into a single corporate body. Guild’s corporate life was symbolised by the possession of banners and chauris- the ceremonial yak’s tail fly whisks. These and other emblems were some times granted by royal charter and were carried in local religious processions by the guildsmen. Like modern corporations guilds had their own insignia, banners and seals which gave them publicity. The most effective method of self advertisement of professional guilds was to make liberal religious donations. Smiths, perfumers, weavers, goldsmiths and even leather workers are said to have donated caves, pillars, tablets, cisterns and other items to Buddhist establishments. In the post- Mauryan period guilds became highly powerful and issued their own coins which was ordinarily done by the sovereign powers. But they never tried to attain political power.
Forms and Size
Sreni was a general term for guilds. The specific term for traders’ corporation was perhaps Nigam and Puga which represented the interests of different traders, crafts and professions of a locality. The Sartha type guilds were mobile corporations for transit type caravan trade. Sreni or guild was a form of industrial or mercantile organisation which played a big role in economy of ancient India.
Artisans of almost all crafts had their guilds. The leading guilds were those of potters, stone cutting and working, metal workers, carpenters, weapon manufacturers and textile workers. Ancient Indian literature refers to a wealthy potter named Sddalputta had owned 500 potter workshops. He had his own distribution system and owned a large number of boats which took the pottery from workshop to the various parts on the Ganges. With growth in commerce some guilds grew even larger.
The guilds remained almost autonomous in their internal organisation, the government respecting their laws. These laws were generally drafted by a larger body, the corporation of guilds of which each guild was a member. The corporation elected a certain number of advisers and they were its main functionaries. Guilds also served as local bank and trustees of religious endowments. People kept deposit of money with guild with a promise that the interest accrued from there was to be devoted to specific purposes, every year, so long as the Sun and the Moon endure.
The guilds fixed rules of work, quality, price and distribution of finished products. Goods manufactured in the country were stamped at the place of manufacture. The imported ones were stamped at the toll gates. Any fraudulency with regard to weighing and measuring a commodity was severely punished by the state. Similarly gaining of more than the specified profit was considered a punishable offence.
Business community of this period had a highly developed sense of business administration. A passage in Digha Nikaya states- “the wise and the moral man shines like a fire on a hilltop, making money like the bee which does not hurt the flower. Such a man makes his pile as an anthill, gradually. The man growing wealthy thus, can help his family and firmly bond his friends to himself. He should divide his money into four parts. On one part he should live, with two expand his business and the fourth he should save for a rainy day”.
Guilds guaranteed the conduct of its members. Members of a guild were protected against injury and theft. If a craftsman was hurt, the person responsible was put to death. The one who stole articles of an artisan was heavily fined. There were equally strict rule against deception by artisans. Artisans indulging in unlawful practices were not only punished but also were expelled from the guild.
A guild had the force of law for its members and this law or code of conduct was known as shreni dharma. A guild had power not only over the economic but also over the social lives of its members. It acted as the guardian of their widows, orphans as their insurance against sickness. They acted as the centres of technical education. Knowledge of mining, metallurgy, weaving, dying, and carpentry was maintained and improved by the relevant guild.
The corporate type spirit of the guild gave recognition and self respect to merchants and craftsmen which they would not have otherwise found. Gradually, guilds developed into the most important industrial bodies in their areas. Historians are of the view that on the whole they were remarkable intuitions of ancient India.
Establishment of guilds resulted in growth of industry. Membership of a guild provided status and security to an artisan. Guild heads, shreshtins, emerged as a class of highly respected people who controlled and financed trade on individual or partnership basis. These shreshthins, while working as a joint stock company, contributed money and commodities to business. Growth of guilds led to expansion of towns. Members of a guild lived and worked together in a particular section of the town and generally had such a close-knit relationship that they came to regarded as a sub-caste. In most cases sons followed the same profession as the father so the hereditary principle was adhered to. The guilds had a good supply of artisans. The children of a caste or sub-caste followed same trade and this led to achievement of perfection. Thus guilds had a regular number through generations. The growing trade of the ages led to the rise of a strong mercantile.
The state created infrastructure to facilitate growth of business. New trade routes were opened for domestic and foreign business. The main trade routes were along the Ganges river itself from Rajgriha as far as Kausambi (near Allahabad) and then via Ujjain to Bharuch, the chief port for overseas trade with the west: and from kausambi up the Ganges valley and across the Punjab to the Taxila, the outlet for the over land western trade. Eastwards the trade went through the Ganges delta to the coast of Northern Burma and south along the East coast of India.
In this way these guilds were responsible for organising traders and craftsmen. The principles of management which we generally attribute to the western management thinkers were already practices in ancient Indian guilds. Guilds worked on the concepts of hierarchy, organisation, division of labour, specialisation, quality control, rules and regulations, labour welfare, proper distribution system, advertisement etc. They were perhaps the first powerful democratic business institutions of the world. They organised the resources of production, gave employment to many and provided quality to consumers. They protected the rights and welfare of workers and maintained and developed the skills of artisans. Guilds led to the expansion of domestic and foreign. This gave a boost to the economy and brought about prosperity of people. Through payment of taxes, these guilds facilitated governments in creating infrastructure. Historians are of the view that “the guild in ancient India was not merely the means for the development of arts and crafts through autonomy and freedom accorded to it by the law of the land, it became a centre of strength and abode of liberal culture and progress which made it a power and ornament of the society”. Tit is a matter of great pride that these ancient Indian corporate legal entities were much ahead or times and may have worked as models for the present day corporate bodies.
By Dr Pratibha Goyal
(The writer is Professor, Punjab Agricultural University, Ludhiana, Punjab.)