Agency and Institutional Change: The Dissolution of the Guild System in the 18th Century Rhineland

Employing concepts from institutional economics and institutional organisation theory the article challenges the institutions-as-rule perspective by centring on endogenous
institutional change through entrepreneurship. The empirical case is the dissolution of
the guild system in 18th-century Rhineland, which is usually understood as a regime
shift effect of the Napoleonic wars and the integration of the Rhineland into the French
state. A close inspection of the developments in the woollen cloth industry in the Aachen region shows that the formal abolition of the guilds by the French concluded an
erosion process that had already begun in the early 18th century and which had substantially undermined guild regulations. I suggest that entrepreneurship helps understand and explain this process: Institutional entrepreneurs found loopholes and bent or
broke the guild regulations to the extent that they no longer harmed their expansive
strategies.