I. INTRODUCTION
I cannot help but confess that reading this article filled me with horror, and I was far from thinking that during the time of this legislature, I would see a project for a new monopoly company proposed!
Indeed, Gentlemen, I consider such a project extremely offensive to this sovereign Congress, capable of covering us with shame,
[it is] opposed to the lights of the century in which we live, and even opposed to the principles laid down here. Simonde [Jean Charles Léonard de Sismondi], Say [Jean-Baptist Say], and all the political economists declaim against monopolies, and all the illustrious Deputies who listen to me are so well versed in the economic history of the nations of Europe that they fail to know that there have been so many monopoly companies, so many bankruptcies.Footnote 1
This excerpt is taken from a longer speech given by Portuguese representative António Teixeira Girão in 1822, at the height of the first Portuguese Liberal Revolution.Footnote 2 The speech was colorful and had an angry pitch, but it was not unusual or unexpected. Once dominant in European halls of power as instruments to strengthen the state, monopolistic practices and institutions gradually fell out of favor. By the early nineteenth century, it would be hard to find a man well-versed in political economy who unabashedly defended market restrictions or economic privileges—particularly in relation to domestic trade. Jean-Baptist Say and Léonard de Sismondi, mentioned by Teixeira Girão, were not exceptional in this stance; Sismondi’s later intellectual conversion away from classical liberalism (Gislain Reference Gislain2013) did not make him a supporter of monopolistic institutions. In the early nineteenth century, what had been called internal monopolies (monopoly was a polysemic word used to describe several economic practices), largely tied to exclusive economic rights and privileges, appeared destined to vanish without even the possibility of publicly challenging prevailing doctrinal convictions.
It had not always been like that. During the seventeenth century, in particular, defenders of mercantilism and bullionism overwhelmingly voiced support for monopolies, even if they differed on many other economic issues. Some, such as Thomas Mun in EnglandFootnote 3 or Hugo Grotius in the Netherlands,Footnote 4 advocated the creation of chartered companies for colonial exploitation, such as the East India Company. Others had other goals and supported other forms of monopoly arrangements, for example as a means to protect national industries. This was the case of the Count of Ericeira in Portugal, with his import-substitution policies, and—most notably—Jean-Baptiste Colbert, who, as minister of finance under Louis XIV, decreed in 1673 that all artisans should be organized into guilds. To some extent, professional guilds were understood as instruments for limiting foreign competition. Colbert’s policies would later serve as a partial model for Portuguese mercantilism (Costa, Lains, and Miranda Reference Costa, Lains and Miranda2016, p. 136). Whatever their form, monopolistic practices constituted one of the cornerstones of seventeenth-century economic thought.
While earlier critiques can be found in the Classical world—particularly in Aristotle (Langholm Reference Langholm2006, p. 397; de Roover Reference De Roover1951, p. 493)—and in the High Middle Ages, when several traditions of critical commentary developed (Langholm Reference Langholm2006), it was in the eighteenth century that opposition to monopolies became systematic and their defense fell increasingly out of favor. Developed within different—sometimes even opposing—intellectual circles, new economic ideas directly challenged government-enforced prohibitions and rent-seeking privileges. Both monopoles dans le commerce extérieur (like colonial joint-stock companies) and monopoles dans le commerce intérieur (like guilds)Footnote 5 came to be viewed as harmful economic solutions. This was true not only for the antimercantilist Vincent de Gournay, revisited in detail in The Circle of Vincent de Gournay: Economic Knowledge and Administrative Practices … (Charles, Lefèbvre, and Théré Reference Charles, Lefèbvre and Théré2011), but also for the late mercantilist Véron de Forbonnais in his writings and translations (Alimento Reference Alimento2014),Footnote 6 as well as for their rivals, the physiocrats. For François Quesnay and the Marquis de Mirabeau, leading figures of the physiocratic school, large-scale agricultural productivity could be achieved only through the free circulation of goods and capital among sectors (d’Abadal Reference D’Abadal and Backhaus2012, p. 153). The physiocrats, it has been said, were the “first group to propose a liberal economic order, created spontaneously via the actions of self-interested men” (d’Abadal Reference D’Abadal and Backhaus2012, p. 155). Quesnay—who was fiercely attacked by Forbonnais (Groenewegen Reference Groenewegen2002, p. 255)—maintained in one of his best-known works that “with the assumption of freedom of foreign trade, prices will always be regulated by competition in the commodities of adjacent nations” (Quesnay [1757] Reference Quesnay and Gendzier2009), an assertion that perfectly reflects his commitment to free trade.
A deep concern for the consumer made Anne Robert Jacques Turgot one of the most resolute opponents of monopolistic practices, particularly in the grain trade. For him, the public interest could be secured only through free and unrestricted competition among economic agents (Groenewegen Reference Groenewegen2002, p. 336). His contemporary and kindred spirit, Adam Smith, took a similar position, condemning monopolies primarily for stifling competition. Yet Smith found redeeming qualities in some monopolistic institutions. He certainly regarded the East India Company—perhaps the greatest and more notorious example of a monopolistic institution in his time—as a nefarious enterprise, even accusing it of being the plunderer of India, but he also conceded that a monopoly could occasionally be justified. A joint-stock company, he argued, might require exclusive privileges to offset the extraordinary risks of certain foreign ventures—though such privileges should always remain temporary: “Without a monopoly … a joint-stock company, it would appear from experience, cannot long carry on any branch of foreign trade” (in Donoghue Reference Donoghue2020, p. 10). Moreover, Smith also acknowledged that such enterprises could serve useful functions, especially in the defense and consolidation of British interests in India, provided Parliament stripped them of their exclusive privileges (Donoghue Reference Donoghue2020, pp. 11–14).
Among several monopolistic institutions, one in particular became a target of intense criticism during the eighteenth century: the professional corporations or guilds. For most Enlightenment thinkers, these institutions possessed no redeeming qualities. In France, Louis-Joseph Plumard de Dangeul denounced every aspect of “monopolies in domestic trade,” even while conceding that they might once have been useful.Footnote 7 A few years later, Turgot was one among many who decried abuses by the guilds, and he even tried to abolish them in 1776. In Spain, Pedro Rodríguez Campomanes claimed they were an obstacle to industry and “one of the fundamental causes of Spain’s backwardness” (Campomanes 1774, ch. XV); and in Britain, Adam Smith, likewise, seemed unable to extend to the guilds the same redeeming features that he was willing to recognize in the East India Company.Footnote 8
Artisanal and merchant guilds were professional associations that played a massive role in the secondary and commercial sectors of the European economy from the High Middle Ages. It was mainly these institutions that most authors had in mind when they critically wrote about monopolies in domestic trade. For centuries, guilds succeeded in monopolizing the production and distribution of a vast array of goods—from bricks and glass to soap, starch, butter, pepper, writing paper, dyes, and many others. They imposed collective discipline and maintained continuous oversight of their respective trades. They shielded themselves from competition under the pretext of guaranteeing quality control, and they also required an apprenticeship regime that, in some instances, could last up to eight years. Everyone aspiring to enter a trade was obliged to go through long periods of apprenticeship before qualifying to open a commercial space or set up a workshop.
It can be argued that the historiographical debate over the true economic impact and role of guilds remains unresolved, to a degree. While a body of scholarship presents a benign interpretation of their function in low-information market environments,Footnote 9 there is also a well-established counter current—one this article follows more closely—that views guilds as extractive and harmful institutions (e.g., Acemoglu and Robinson Reference Acemoglu and Robinson2012, pp. 187–188). According to Sheilagh Ogilvie, they were rent-seeking institutions that hampered economic growth, imposing entry barriers, output quotas, and price controls. For Ogilvie, guilds neither ensured quality control nor enforced contracts, or helped combat fraud, as suggested by other historical interpretations. Instead, for her, guilds restricted trade, discouraged initiative, and obstructed innovation. They also imposed deadweight losses by diverting resources into redistributive activities, consuming resources that could otherwise have been used for productive initiatives. During the eight centuries before industrialization, they also segregated women and minorities like Jews (e.g., Ogilvie Reference Ogilvie2014, Reference Ogilvie2004, Reference Ogilvie2011).
Given all these problems—identified by some contemporaries themselves—how could such institutions have survived for several centuries, especially after the prevailing mercantilist ideas began to decline? If we follow the critical perspective (which I largely do), the explanation is mostly straightforward: They usually paid their way out of trouble. By bribing royal officials, princes, and ministers, guilds secured protection. It was not an economic benefit that allowed them to persist for so long; rather, it was the cash transfers and subsidies provided to municipal authorities and central governments (La Force Reference La Force1965; Bossenga Reference Bossenga1988; Ogilvie Reference Ogilvie1997; Hafter Reference Hafter2007). In a way, as Ogilvie argued, “guilds illustrate the long historical interdependence between economic and political institutions in regulating markets” (Ogilvie Reference Ogilvie2014, p. 187).
By the turn of the eighteenth century, the redistribution of resources and cash transfers were not enough, as France demonstrated with the abolition of guilds in 1791. Furthermore, while new hostile economic ideas gained even more ground, the upending of political order meant that their backdoor lobbying stopped working in many countries. Yet not everything was bad. The expansion of the public sphere and the rise of new representative forums provided guilds with alternative means of defending themselves in the public arena, even in the face of growing and widespread criticism such as that voiced by Teixeira Girão at the beginning of this article. How, then, did they respond in the new political setting? In what ways did they attempt to justify their monopolies and privileges against a hostile intellectual backdrop? How did they emphasize their economic contributions or the social roles they believed they played? And how did they engage with the new authorities?
This article has sought to address some of these questions, contributing to fill a important historiographical gap, and also examines the development of economic ideas beyond the sophisticated works of men steeped in political economy. I focus, in particular, on the arguments and justifications advanced by one particular Portuguese merchant guild, that of the Lisbon shopkeepers, during a period of intense pressure: the first Portuguese Liberal Revolution and its aftermath (1820 to 1826). The article shows that while the defense of monopolies did include some economic justifications, it mostly highlighted the positive reverberations of commercial monopolies in society, in particular the formation of an upstanding class of merchants and citizens. It also shows how the shopkeepers positioned themselves within the broader debates on economic liberalism, and how they sought to adapt to the shifting political and institutional landscape.
The article is organized into three parts. First, I briefly revisit the last decades of the guilds in Portugal, paying special attention to the ambiguous measures of the Marquis of Pombal (1699–1783) regarding the guilds. In the second part, the text traces the emergence of economic liberalism in Portugal, which quickly challenged the professional corporations. In the final section, the article explores the multiple dimensions of monopolistic thought and discourses, showing how the guilds skilfully engaged with a hostile political agenda and took advantage of government ambitions and basic fears. The article is based on largely unexplored documents prepared by the shopkeepers’ guild in Lisbon in response to a request from the Portuguese Liberal Cortes, which invited the guilds to explore ways of abolishing their monopolies.
In this article, the term monopoly is not employed in its modern technical sense, which is much narrower and refers to a market closed to competition, dominated exclusively by a single supplier who faces no threat of new entrants. Instead, the word is used in the way contemporaries understood it: as a broad, catch-all term that described a variety of restrictive economic practices.
II. THE ARDUOUS TRAJECTORY OF GUILDS AND CORPORATIONS IN PORTUGAL (1755–1820)
In Portugal before the nineteenth century, as in many other parts of Europe, almost all urban craftsmen operated under guild regulations. The guilds exercised extensive control over their trades: they tried to set prices, restricted entry, regulated production standards, and enforced long apprenticeships. Their regimentos (statutes) reinforced the hierarchical organization of the workshop, structured around the interests of the masters, who supervised journeymen and apprentices while protecting themselves from market disruptions—for instance, by limiting access to the profession. As in Spain, each guild maintained its own religious brotherhood, which performed charitable functions by assisting members in need but also contributed to the exclusion of certain groups, such as the New Christians.
There was no meaningful regional variation. Throughout the country, craftsmen formed representative bodies, known as Casa dos Vinte e Quatro, which came to hold significant power in the biggest cities of the country. One such body had operated in Lisbon since 1383 (established during the war with Castile, when the Crown needed money), with others existing in Évora since 1459, in Coimbra since 1459, in Oporto (the country’s second city) since 1518, and in Guimarães since 1535. This representative structure was not irrelevant, for it allowed the guilds to have a say in municipal fiscal policy, as well as in the economic governance of the cities in which they were based. The Casa dos Vinte e Quatro also participated in the election of municipal officials. Indeed, the Juiz do Povo—a representative of all the local craftsmen—had a seat in the meetings of the municipal councils. Furthermore, the leading members of the Casa dos Vinte e Quatro were sometimes appointed to represent the cities in the Portuguese medieval and early modern Cortes, as members of the Third Estate (Loureiro Reference Loureiro1936–1937, p. 130). In there, they sometimes played a disruptive role, threatening to abandon the meetings when their complaints about taxation were not given proper attention.Footnote 10
Apparently, these Portuguese professional organizations were never as wealthy as their European counterparts from Flanders, Germany, or northern France. They did not build magnificent headquarters or develop refined professional heraldry (Langhans Reference Langhans1948, pp. 53–55). For example, the oldest and most important representative body of the craftsmen of the country—the Casa dos Vinte e Quatro of Lisbon—met in a makeshift wing of the city’s hospital. Trouble began for the guilds, however, only following the Lisbon earthquake of 1755, which severely threatened the privileges of artisans. The capital’s urgent reconstruction requirements were not compatible with the traditional restrictions that the guilds had imposed on the market, which would affect the pace of the rebuilding effort (Madureira Reference Madureira1997).
Sebastião de Carvalho e Melo, the future Marquis of Pombal, and the leading Portuguese politician of the second half of the eighteenth century, was not unfamiliar with the criticisms that were laid against the guilds and market restrictions. During his diplomatic posting in Vienna (1745 to 1748), he witnessed the economic reforms of Maria Theresa, which curtailed the power of the guilds in Bohemia (Wangermann Reference Wangermann and Kors2003). Also important was the culture of the men he appointed to key administrative positions, some of whom seemed to have been familiar with the economic literature that condemned monopolies. One illustrative case is that of Manuel Pereira de Faria (1720–1787/8), chosen by Pombal to help run the new Erário Régio (Treasury). Faria’s personal library contained numerous works on new economic ideas that were sharply critical of guild privileges. It is hard to believe that Pereira de Faria would be completely indifferent to the critical assessments that Jacques Savary des Bruslons (Reference Des Bruslons1748) and Richard Rolt (Reference Rolt1761) dedicated to the word monopoly in their dictionaries (both in Faria’s collection).Footnote 11
Pombal remained a late-stage mercantilist, and although he was ambivalent about the guilds, his import substitution policy and his ambition to foster national industry through the creation and development of bigger factories (free from guild regulations) indirectly weakened guilds’ privileges, particularly in the last decades of the eighteenth century (Madureira Reference Madureira1997, p. 236). In the short term, the creation of the Junta do Comércio in 1757 would also change the relationship of the manufacturing guilds with the state. As part of a broader attempt to rearrange the country’s economic and political governance, the Junta do Comércio received the mandate to oversee all Portuguese commercial and industrial activities (Pereira Reference Pereira1988). The Junta settled conflicts that emerged from the corporate world, putting an end to any lingering ambition for internal adjudication of disputes. Meanwhile, the Junta also began to undermine the guilds’ ability to restrict entry, facilitating access to incorporated professions by standalone economic agents and also granting licences. To promote the country’s industry and fend off foreign competition, the Junta do Comércio also received the mandate to authorize and grant special fiscal benefits to new industrial or manufacturing ventures, based on what was called Novo Invento (new invention)—a form of incentive for individual inventions, similar to a patent. The change in economic governance during the second half of the eighteenth century has been considered so drastic that one Portuguese historian has even claimed that in Portugal there was “corporatism without corporations” (Madureira Reference Madureira1997, p. 79).
While certain professions disappeared—victims of fluctuations in fashion and in the production method of independent artisans—others adapted. We know, for example, that in some instances the craftsmen were integrated into more extensive workshops coordinated by a royal enterprise, the Royal Silk Factory. At the same time, there was a professional entrenchment, with the publication of new guild statutes (in Lisbon from 1768 to 1774 and in Oporto from 1751 to 1806) and with the resurgence of specific practices, such as compulsory registration (Madureira Reference Madureira1997, p. 238).
Lisbon’s retail trade is a good example of this late entrenchment. Largely disjointed before the 1755 earthquake, the retailers asked for and received a representative institution in 1757, the Mesa do Bem Comum dos Mercadores de Retalho (Board for the common good of retailers). The newly established guild functioned as an alliance of smaller retail associations of shopkeepers called “classes.” Each class held a monopoly over the distribution of specific goods and products, both domestic and imported. The prosperous mercers who specialized in textiles of every kind—from fine fabrics such as shalloons, chintzes, chambrays, embroidered quilts, silks, and brocades, to coarser materials like osnaburgs, duroys, calicoes, and plain-woven linens—were the leading group. There were also less wealthy classes that retailed more ordinary objects, like combs made of tortoiseshell, flintlocks, and glasses. All of the classes probably underwent a transition after the 1755 earthquake, from being stallholders in the streets to shopkeepers, which corresponds to the retail model proposed by historian James Jeffries many years ago for other countries (Jeffries Reference Jeffreys1954).
The protection of monopolies was the guild’s primary concern. Only its members were authorized to sell the goods assigned to their class, and exclusively from their open-front shops, which were located on the streets designated for their trade. The guild’s statutes excluded all other economic agents from participating in this branch of trade in Lisbon, even those who had previously engaged in it.Footnote 12 The covert sale of such goods—often conducted in the upper floors of warehouses—was strictly prohibited.Footnote 13 Peddlers, street vendors, fair stallholders, and other shopkeepers were likewise forbidden to sell any merchandise reserved as the guild’s exclusive monopoly.
According to the statutes, it was illegal for any shopkeeper to sell merchandise elsewhere or to employ a peddler to sell goods in the streets. The shopkeeper could employ one or two shop assistants/clerks (caixeiros), but he could not own more than one shop. At that time, inheritance rules were also established, always with the aim of barring the entry of other economic agents. The statutes were particularly careful with the widows of deceased shopkeepers.Footnote 14 Every shopkeeper also had to contribute to a common fund to help those in need—unlike the other Portuguese guilds, the Mesa do Bem Comum dos Mercadores did not establish a religious brotherhood.Footnote 15
In 1755, the creation of the guild was justified by the need to put an end “to the freedom and disorder” that afflicted the retailing sector of the Portuguese capital.Footnote 16 Interestingly, there is an explicit convergence between the ambitions of the guild and the statutes of the Junta do Comércio in the sense that they both stated that “it is not important that there are many, but rather that there are many good traders.”Footnote 17 However, the relationship between the Mesa and the Junta was far from seamless. It was the Junta, not the guild, that controlled entry to professions by examining the caixeiros and those who wanted to open a shop. In turn, prospective members had to fulfil specific requirements, such as having served as a shop assistant in Lisbon’s retail sector for at least six years. Nonetheless, the Junta routinely disrespected these requirements and thus infuriated the guild. The Mesa’s record books are filled with discussions about this disregard for its statutes in what concerned the issuances of licences to individuals who lacked the necessary six years of experience as a retail clerk in LisbonFootnote 18 or who were illiterate.Footnote 19
From 3 March to 7 July 1758, the Mesa convened on seven occasions solely to protest the issuance of trading licences. At the seventh session, it was decided to petition Sebastião de Carvalho e Melo.Footnote 20 The future marquis assured them that “everything would be done,” yet the retailers’ hopes were soon disappointed. At one point, the possibility of “consulting His Majesty,” bypassing Pombal, was even raised although it did not go ahead—the Mesa probably deemed it was too risky to challenge the prime minister.Footnote 21
The specific branch of the retail sector that the guild tried to control was not necessarily in crisis at the turn of the eighteenth century. As a recent study showed, between 1790 and 1833, 1,132 incorporated shops of these merchants opened in Lisbon, an average of almost twenty-six shops a year. In 1778 there were only 359 (Cruz Reference Cruz2023, p. 153). Such performance was the result of a cultural transformation in consumption that spread from Paris and London and that also reached Lisbon; a true burgeoning consumer society that reflected a growing taste for fashionable goods and that was satisfied by the shopkeepers (Blondé and Van Damme Reference Blondé, Van Damme, Stobart and Howard2019, pp. 33–38; Welch Reference Welch and Trentmann2012, pp. 231–232). The performance of the sector had nothing to do with the guild itself, which was constantly being undermined by the governmental structures that the absolutist regime created to regulate economic activity. Strange as it might now seem, the merchant guild was therefore reasonably open-minded about the liberal ideas beginning to emerge in this period (Pereira Reference Pereira1988, p. 50).
III. STREET VENDORS AND THE NEW ECONOMIC CHALLENGE ON THE EVE OF THE LIBERAL REVOLUTION
In August 1820, a military pronunciamiento established a liberal regime in Portugal. This was the country’s first experience of revolutionary liberalism, but it was not the first time that Portugal had trialed economic solutions that would be largely adopted by the new political regimes, particularly in what concerned domestic markets.Footnote 22
At the beginning of the nineteenth century, the new economic science had made some significant inroads in Portugal. Physiocrats’ discussions on the importance of land and their criticisms of monopolies were already known, while Adam Smith began to be read just a few years after the publication of his Wealth of Nations (Cardoso and Almodovar Reference Cardoso and Almodôvar1998, pp. 46–53). One man in particular immediately adhered to several of Smith’s ideas. Secretary of the Navy and Overseas Domains and President of the Treasury Rodrigo de Sousa Coutinho quickly began to incorporate the concepts of cost, value, and the factors of production into his world view. Initially, he was less interested in ideas of free trade. As the leading politician of a country that relied so heavily on colonial revenues, he could not have pursued an agenda that would have upended the colonial pact.
Later, however, he dropped his doubts about free trade. It was Sousa Coutinho who led the government that ended Portuguese economic primacy in Brazil, in the aftermath of the 1807 French invasion, which forced the royal family and court to find refuge in Rio de Janeiro.Footnote 23 Even before dropping anchor in Rio de Janeiro in 1808, the Portuguese government announced that “all and any goods, products and merchandise transported in foreign ships of Powers that remain at peace with my crown shall be admissible in the customshouses of Brazil.”Footnote 24 Two years later, in February 1810, Portugal signed the Treaty of Commerce and Navigation with Great Britain, opening Portuguese ports in Europe and Brazil to British commercial interests. Much has been said about this agreement, and with good reason. With an undeniable impact on the nascent Portuguese industry and the Portuguese balance of trade, it certainly changed the country’s previously favorable situation as a platform for distributing colonial staples throughout Europe (Alexandre Reference Alexandre1993, pp. 769–780). At the same time, the treaty initiated a process that ended with Brazilian independence in 1822. A return to a colonial status was unacceptable for the leading sectors of the Brazilian society.
Much less discussed, but very important insofar as it reshaped the consumption habits of a large part of the population, was the decree of 27 March 1810, which was a fruit of the same drive for economic reform. In fact, this decree has been described as “perhaps the most daring measure of Prince John’s economic policy” (Pereira Reference Pereira1992b, p. 37). From his new capital in the South Atlantic, the Prince Regent John ended the commercial restrictions that pervaded the retail sector throughout the monarchy, which had left in the hands of guild shopkeepers the exclusive right over the sales of several products (including textiles and fabrics). Specifically, the decree put an end to the “previous legislation that prohibited the sale of goods in the streets and houses in cities and small towns.” It was claimed that such prohibition, previously enshrined in the 1749 Portuguese Pragmatic law, was incompatible with the modern “principles of political economy.” The document is permeated by the new language of political economy that was appealing to men such as Rodrigo de Sousa Coutinho or the Brazilian-born José da Silva Lisboa, both of whom were probably involved directly in preparing the decree.
The general interest demands that all My faithful vassals be free to seek the means of their subsistence in the useful division of labor, according to the propensity and choice of each one; in addition to competing for the multiplicity of purchases and sales for a greater market extension and ease of extraction, which motivates more entry of products and exit of their equivalents, with a proportional increase in the Collection of My Revenues, and in the Industry and Commerce of this State, which it is so convenient to promote, as well as to sustain in fair balance through the Competition of a greater number of economic agents.Footnote 25
According to later interpretations, which were very critical, the Prince Regent’s decision only served to legalize what was already an unrecognized and widespread commercial activity of unrestricted trade that ensured the livelihood of many people who had been pushed into the cities by the French invasions of 1807, 1809, and 1811.Footnote 26 Frequently referred to as vendilhões, especially during the liberal period, these men and women, who were also called tendeiros volantes, adelas, bufarinheiros, or mascates (in the Brazilian version), moved goods without paying taxes and sold merchandise that should have been distributed exclusively by members of the Mesa dos Mercadores.
They were not a novelty in Portuguese society. Feared by the population, they had been targeted by royal legislation since the sixteenth century, though not always successfully.Footnote 27 The phenomenon, however, appears to have intensified at the beginning of the nineteenth century. Foreigners who visited the country in the early 1800s often mention people selling a wide range of objects on the streets of Lisbon. The Swedish traveler Carl Ruders, for example, spoke of the itinerant booksellers of the Portuguese capital, with their small movable shelves of “second-hand books that are no longer in demand.” He also referred to the “used clothes and household utensils” that were sold along the walls of Passeio Público and in Praça do Salitre. These were things “so tattered” that, in his opinion, “only beggars … could use them profitably,” but, as he admitted, they were in great demand (Ruders Reference Ruders2002, pp. 225–226). In this respect, Lisbon would be no different from cities like Madrid, whose streets were full of street vendors, who satisfied the demands of urban dwellers since at least the seventeenth century (Nieto Sánchez Reference Nieto Sánchez2005).
There is a rich iconography on the peddlers, who sold door-to-door and on the streets. These representations were sometimes devoid of prejudice. In other cases, however, an image of misery, if not scorn, was on display. After all, peddlers were associated with bad morals and squalor. In England, for example, peddlers were frequently depicted as treacherous men and seductive women (Welch Reference Welch and Trentmann2012, p. 238). In early nineteenth-century Portugal, these street vendors were portrayed in drawings by João MacPhail and Jorge Bekkerster Joubert, who were mainly interested in popular groups.Footnote 28 They sold stolen goods, and they were also associated with contraband. Some of them operated within clandestine trade networks that relied on ship captains and the complicity of corrupt Custom House officials.
Despite complaints from all shopkeepers, the liberalization of door-to-door sales enacted in 1810 was upheld everywhere in the Portuguese world, including several Brazilian cities (Chaves Reference Chaves2006, pp. 167–169). There was, however, one important exception: the shopkeepers of Lisbon, who saw their monopolies confirmed in 1812.Footnote 29 It would seem that having a guild to lobby the monarchy was still worthwhile, at least for the time being. They were, however, under threat. At the doorstep of the “August Revolution,” King John VI promised new measures to fully liberalize the retail sector of Lisbon.Footnote 30
It might be argued that the new liberals ideological context was unfavorable for the guilds and their monopolies. Although the first generation of Portuguese liberals, later christened vintistas, did not hold uniform views regarding economic issues, two ideas were widely propounded. On the one hand, they advocated protectionist measures to shield declining domestic industries from British competition. Within the internal market, on the other hand, their prescription was largely one of economic liberalism for the domestic market (see, for example, Cardoso Reference Cardoso1991, p. 481)—a policy that would be catastrophic for craftsmen and merchant guilds alike. Both groups would offer strong and creative defenses of their monopolies, particularly, as I will show below, the retail guild of the Portuguese capital.
IV. THE TOUCHSTONES OF GUILD MONOPOLISTIC DISCOURSE
The Portuguese Cortes—a new political forum in the country—became a chamber for airing grievances and resentments that had been bottled up for many decades. While the power of the vote was theoretically the cornerstone of every liberal regime emerging in the period, the new sense of citizenship in Portugal was being developed not around suffrage but around an older, traditional right: the right to petition (Pereira Reference Pereira and Vieira1992a, p. 5). At one point, the new Portuguese representatives feared being overwhelmed by the wave of petitions demanding political change (Cruz Reference Cruz and da Cruz2022).
As far as economic issues were concerned, the problem of the guilds was a continuous theme of Portuguese petitioners to the new political authorities. Of the ninety-one petitions (mainly collective petitions) related to domestic trade, for example, forty-six pertained to commercial monopolies (Pereira Reference Pereira1992b, p. 74). Far from being a minor issue, commercial monopolies also went far beyond the Lisbon area. The contestation involved a large part of the country, with critical hotspots in Lisbon, Porto, and Minho.
The Cortes mainly sought to suppress any remaining privileges in the countryside and small towns, and there are several testimonies of their inclination to liberalize the retail sector in Lisbon as well.Footnote 31 For example, a commission specially formed to make economic recommendations to the first Portuguese liberal government published a report that says: “Since the associations of the five classes are a true monopoly, and as such opposed to the sacred freedom of property of labor, it follows that it is a [our] duty to free the Nation from the attacks made on this unalterable right, abolishing such institutions as pernicious.” According to the Memoria dos trabalhos da Commissaõ para o Melhoramento do Commercio, those institutions “only tend to extinguish emulation, render talents useless, prevent knowledge from spreading beyond the limits they prescribe.” All recognizable criticisms. The commission even addressed the gender inequality, lamenting that the guild would “hinder the means of subsistence for a sex [feminine] to whom weakness has given greater needs and fewer resources.”Footnote 32 The Cortes nonetheless also understood that the merchant guild of the capital ought to be treated differently. Shopkeepers were therefore asked to present their case and propose a way to wind up their commercial monopolies in the least disturbing way possible.
The responses of Lisbon’s Mesa do Bem Comum dos Mercadores de Retalho to this request of the liberals represents a rare historical source, a testament of a confrontation that would not be repeated in Portugal and with few similar equivalents in Europe at the time (all this makes accurate comparisons difficult). The responses expose the tenets of monopolistic thought in Portugal during the transition to liberalism, and were often highly performative. Far from proposing solutions to terminate commercial restrictions gently, the merchants instead submitted several files in which they contested all the critiques leveled against them. The merchants put forward economic arguments and emphasized the social importance of the commercial guilds, but they deliberately avoided prolonged discussion on the nation’s political regime, still marked by instability (it would be unsafe to commit to one of the political sides just to see the situation upended). They addressed the Cortes as “August Congress” or “Sovereign Congress,” and they praised the new constitutional procedures in a document penned after the publication of the 1822 Constitution but before the fall of the first liberal government in June 1823.Footnote 33 In a later document, which was written to John VI, now once more boasting absolutist power, the merchants distanced themselves from previous commitments to representative institutions, stating that political change was above and beyond their practical and mundane interests. According to the Mesa,
The representative of the Mesa and the dependent classes are not unaware of the circumstances of the time, and know how to bear with due moderation the accidents of political vicissitudes, which, when they have remedies, are largely beyond their competence and far superior to the insights of simple merchants. Their grievances, Sir, are against domestic enemies, against commercial aggressors, against punishable usurpers; and the great damages and detriments they suffer are remedied by the exact observance of Your Majesty’s holy laws.Footnote 34
The merchants of the Mesa might have defended the Constitution when it was convenient, but they had no problem going back and basing the legitimacy of their claims on the authority of the king.
Economic theory was not ignored by the Mesa, but it was addressed marginally. The guild acknowledged the principle of the division of labor, identifying the issue—as if to demonstrate sufficient understanding—but went on to claim that in their case, labor was already divided enough, and it would be unproductive to go any further. Tellingly, the guild never mentioned the word monopoly, which was repeatedly used by Portuguese representatives in the Cortes, especially those more committed to free trade. The word monopoly had a negative connotation, to be avoided even by those who favored what was construed as monopolistic practices by everybody else. Instead, the guild referred to “commercial laws,” rights, and privileges.
First, the guild argued that commercial regulations were necessary and beneficial, both for the economy and for the state. The alternative would create “disorder and confusion.” Again, the guild was insisting on old tropes and using the recognizable language that underpinned the creation of the Mesa and the Junta do Comércio in 1757. The Mesa claimed that without these “rights and privileges, regular trade loses all its appearance, order, and beauty.” They also added that after being “covered in shadows and stains, it [regular trade] only reveals confusion, ignorance, uncertainty and bad faith, with the loss of taxes due to the vacillating trade exchanges.”Footnote 35
The Mesa insisted on the disadvantages of an unrestricted trade. Contrary to what was being argued by the economic liberals, trade would not increase due to the continually defended multiplication of economic agents, namely dressmakers, tailors, and the many peddlers who filled the streets. These people were ill-prepared, lacking the training, knowledge, and probity that were indispensable in the business world. A “fairer balance through competition from a greater number of distributors,” established in the decree of 1810 as the guiding principle of economic policy, sacrificed the desired order, putting at risk the well-measured work of previous Portuguese governments. The Mesa added that previous authorities, particularly the Marquis of Pombal, “recognized that everything that is given over to the vague whim of men participates in their passions and excesses, so that without restricting freedom it modified it, for the greater good and harmony of those who live in society.”Footnote 36
For the guild, there was no comparison between a restricted and disciplined market where sales were monopolized by merchants and shopkeepers, and the unregulated street markets where theft, fraud, and immorality were familiar sights. For them, “there is no greater scandal that is left over, nor economy that is not dismayed to see men of all ages and women of all conditions crowded in Praça da Alegria [a big street market in Lisbon] and throughout the old Ribeira [port area], selling whatever goods they can and without authorization.” There, the guild claimed, “the rightful hides the stolen, the permitted hides the smuggled, and the little that is authentic hides the very counterfeit and false.”Footnote 37
Contraband was a serious concern for many Portuguese lawmakers, who also wanted to protect the country’s industry. They did not all agree, however, on the impact of guild regulations on the consumption of foreign goods. Some believed that an unfettered domestic market would stop the concealed sale of prohibited foreign goods. Others, however, felt, like their intellectual precursors of mercantilism, that an unfettered domestic market would only lead to an upsurge in contraband. According to the representative Manuel Borges Carneiro, who sided with the merchants, street vendors and standalone merchants “are busy selling all the contraband products that are ruinous to our commerce.”Footnote 38
The Mesa emphasized the same message, claiming that contrabandists would maintain their criminal networks, which included ship captains and even Crown officials, to import foreign goods, and that they would sell these forbidden wares alongside those that legitimately cleared customs houses. Other lawmakers also believed that an unregulated domestic market, where peddlers and street markets played a significant role, increased the consumption of foreign goods, even if these goods were legal, thus harming Portugal’s balance of trade. While discussing the nefarious role of vendilhões, for example, representative Peixoto argued:
Those vendors only serve to bring frivolous luxury to the most remote villages, where, with their continuous incursions, they have introduced foreign products that do not last…. [As a result,] people have abandoned the products manufactured in the country itself, which were, in every respect, much better for use in the countryside. … The Manufacturers of Manchester and Liverpool certainly cannot have better agents and commissaries.Footnote 39
The guild provided tax revenues with certainty for the state (again, a traditional argument), which they emphasized whenever they had the chance, a fact that was recognized by some members of the liberal Parliament, such as Peixoto or Carneiro. The guild had “provided the State with all public needs,” through both fixed taxes and voluntary contributions, which they had started collecting in 1804. According to the guild, between 1804 and 1814, when the Luso-British forces finally defeated the French, the shopkeepers of Lisbon had transferred 125,000,000 reis to the royal treasury.Footnote 40
The guild went beyond economic and fiscal arguments, however, also signaling how important it was to protect such a class of citizens. After all, the guild claimed, the shopkeepers “make up a notable part of the inhabitants of this illustrious capital.”Footnote 41 The Mesa was perhaps even suggesting a new understanding of respectability, with shopkeepers presented as pillars of society—honorable, honest, and hard-working men. Likewise, one can detect in their submissions the new vocabulary of the bourgeois virtues of work ethic, dedication to the craft, and accountability.Footnote 42 Certainly, this seems clear when they pointed out that members spent “their first years acquiring the doctrines ordered in the statutes, … and qualified themselves to the guarantee of their credit and moral and civil probity.”Footnote 43 Furthermore, such men would in fact be indispensable, since, according to the Mesa, the future success of the country had to rely on their offspring. “A good population,” it was claimed, “comes from these honest, polite and well-behaved families, when their children pour themselves into all social tasks.”Footnote 44 The guild also highlighted the defense of morality and social norms, but, surprisingly, it did so in a non-religious way. The words Catholic, religion, or faith do not appear once in their arguments. Perhaps responding to the spirit of the age, this was all about civic virtue.
In contrast to the shopkeepers, street vendors and peddlers were portrayed as dangerous and immoral people. They were always on the move, which made them suspicious everywhere in Europe. In this case, Portugal was no exception.Footnote 45 Unqualified and often illiterate, they were considered unproductive, but more than that, they put the domestic space of customers at risk. According to the guild, if the Cortes liberalized all commercial activities, “[a]ll the entrances to the houses become open, their belongings would be exposed and their patrimony would be scoped out, and innocent families would be unprotected, opening up possibilities for theft and other crimes in which more than just the property is lost.”Footnote 46
Although not unanimously, the fear raised by the guilds was shared by some representatives in the Cortes, where street vendors were often likened to gypsies or vagabonds. In the words of the liberal deputy Francisco Vanzeller:
There are some who are exempt from suspicion, but the average one of them [the peddlers] generally has this reputation: they belong to the order of the Gypsies, and they are no less pernicious, nor can they consider themselves to be otherwise, these men who by their profession continually coexist with criminals on the roads, at fairs, and in taverns. They are always armed, and that is why they are always dangerous, because as soon as the profits do not match everything that they squander, it is obvious what they will resort to.Footnote 47
Such peddlers and gypsies would be incompatible with the model of an ideal citizen that was beginning to be defined around men who paid taxes and contributed to the state coffers.
At this time, Portugal was undergoing a troubling period of criminality, and the guild tried to establish a link between unregulated economic activities and the wave of robberies and thefts that ravaged the countryside. According to the guild, many stolen goods would end up on the street markets. But the shopkeepers went even further, equating peddlers with the populace that overthrew governments during the French Revolution: “The Mesa considers that good and cautious regulation in this trade has never been more necessary than at present: horrendous testimonies have shown Europe that public disasters resemble seasons [of the year], in which insects … devour plants and useful fruits more.”Footnote 48 Accordingly, demands to liberalize the economy had to be resisted and “the artificial voices of the populace” ignored. These unproductive men and women should be employed on the fields, which “were starved of arms due to the barbaric devastation of the French Attilas.” The Portuguese government need only uphold ancient legislation that compelled laborers and serfs to work the fields.
Should the Portuguese government persist in its bid to extinguish commercial monopolies, despite the legitimate protests of the guilds, the guild members also signaled that they expected some form of compensation or indemnity. After all, they had made a significant investment, “trusting in the promise and protection of the laws.”Footnote 49 The guild was fully aware that liberal representatives were discussing other types of acquired rights, namely the complex system of proprietary rights (an inheritance from the Ancien Régime),Footnote 50 and was probably hoping to link the resolution of the monopoly problem to a broader issue. However, the Cortes never seemed to consider that scenario, not even the defenders of the retail guilds. Ultimately, when the guilds were finally extinguished in 1833–34, no compensation was awarded.
V. CONCLUSION
At the beginning of the nineteenth century, commercial and industrial monopolies had acquired a bad reputation, to the point that they were considered almost indefensible, certainly in a country that was largely committed to liberalizing internal markets. In Portugal, too, there was an undisguised hostility towards the guilds and their special privileges, which were considered monopolies. Those who defended these commercial monopolies did so principally on the basis of different premises. To be sure, economic arguments were part of the defense of the guilds, but, as I have noted, they were less prominent than moral and social arguments. In the face of the new Cortes, the guilds tried to appeal to a sense of order, which they perceived to be important for the Portuguese government. In courting their representatives, guilds also underlined the fiscal advantages they brought to the state, which, they argued, could be obtained only if monopolies were kept.
It was, however, the social impacts of commercial monopolies—what would today be referred to as positive externalities—that the guilds emphasized in their submissions. According to them, the concession of monopolies and commercial privileges made it possible for a class of reliable merchants and citizens to emerge. In their view, such men should be protected, not harassed. These were upstanding men, accountable to the state, and with good morals. They were the backbone of the nation, and they were preparing the future generation to perform all kinds of public and useful occupations.
Whilst they may not have realized it fully at the time, the guilds had certainly struck a nerve. Even if largely committed to an unfettered domestic market and hostile to guild regulations, the first generations of Portuguese liberals were very sympathetic to this idealized vision of a reliable taxpayer, trustworthy and imbued with civic virtue. This perception—reinforced by the long-standing conviction that guilds were nearly impossible to abolish with one stroke of a pen, as argued by Turgot (Ogilvie Reference Ogilvie2014, p. 187) and echoed afterwards by many Portuguese representatives (Neves Reference Neves1984, p. 218)—accounts for the hesitation that characterized the Cortes debates from 1820 to 1823.
Fearful over the extent of the public’s adherence to the liberal cause, some representatives also believed that suppressing commercial monopolies would antagonize a reliable base of support, which they certainly did not wish to do. Nonetheless, and despite their protestations of loyalty and utility to the Portuguese state, the merchants and shopkeepers proved not to be a trustworthy ally to liberalism. Amidst the difficulties of this period when liberalism was established in Portugal (1820 to 1846), these groups were often unpredictable, sometimes siding with the absolutists and at other times siding with progressive forces, even after the liberals suppressed the guilds in 1833–34.
COMPETING INTERESTS
The author declares no competing interests exist.
DISCLOSURE STATEMENT
No potential conflict of interest was reported by the author.
