This paper analyzes an early modern German economy to test alternative theories about guilds. It finds little evidence to support recent hypotheses arguing that guilds corrected market failures relating to product quality, training, and innovation. But it finds that guilds were social networks that generated a social capital of shared norms, common information, mutual sanctions, and collective political action. Guilds' social capital affected rival producers, suppliers, employees, consumers, the government, and the wider economy. Economic analyses of collective action, it is argued, can explain why guilds were so widespread while not necessarily being efficient.