reflected the merchants' ability to coerce rulers to shift rent in merchants' favor. The historical evidence reveals that even when merchants could not coerce rulers by the threat of an embargo and even when the privileges provided to merchants did not entail any shift in rent, rulers did grant merchants various rights, including the rights to organize, hold courts and assemblies, elect their own consuls, and serve on juries when merchants were being tried.30
Unlike a cartel theory of guilds, which suggests that guilds form to reduce trade in goods in order to drive up relative prices, this analysis predicts that establishment of these guild organization rights expands trade. At least during the late medieval period, the historical evidence is consistent with this prediction. Although it is likely that the merchant guild organizations sought to advance the merchants' interests in many ways, including negotiating for rights to control prices, these rent-seeking activities cannot account for the patterns identified here.
As centuries passed and trade gave impetus to political integration, larger political units emerged, taking upon themselves the functions that the merchant guilds had performed. The political, commercial, and military relations among rulers enabled all rulers to commit to ensuring the safety of the foreign merchants frequenting their realms. Illustrative are such acts as those of the English kings, who made agreements and enforced embargoes to provide the English Merchants of the Staple and the Merchant Adventurers with security in their dealings with the Hanseatic League. As states evolved, the need for the merchant guild institution to secure merchants' rights declined.31
Merchant guild organizations did not disappear, however. Some became fiscal instruments that hindered trade expansion. Others consolidated their political power and, after securing their members' rights, turned to limiting the rights of their competitors. For example, although the establishment of the German Hansa enabled Northern European trade to flourish, once organized the Hansa’s concern was not efficiency but profitability. In its constant efforts to preserve trade rights and supremacy, the Hansa crushed other traders’ groups, without consideration of their