Thieves' Guilds

In order to understand the Thieves’ Guilds, one must start with the City Guard, as the Guilds are a response to that organization.
The City Guard is not really a police force, in the modern sense. They weren’t created to deal with crime. They were more a peacekeeping force, and a city defense in case of outside attack. Now, in the intervening centuries, they have evolved a bit beyond their original mandates, as organizations do, especially ones with at least some political power.
Since their creation, the concept of a “peacekeeping” force has changed a bit. Under most circumstances, peacekeeping usually meant stopping riots, breaking up dangerous crowds, and generally keeping the current power balance stable. In other words, the City Guard was a tool of the elite and powerful (typically, the nobility) in power, enforcing the will of the local rulers. They were not a group with orders to “serve and protect” the commoner. In fact, it was sort of the opposite, and the City Guard would often end up harassing the commoners, simply because they could.
Because of this, enterprising folk organized “citizen protection” groups, a sort of neighborhood watch. Members would donate small amounts (they were the poor, after all, but if they could chip in to pay the people who were protecting them, they did) to support those who made it their job to protect people. Since most commoners worked 10 hour days (or longer, especially agricultural workers during harvest), this fund was vital to pay the “protectors” since they couldn’t do a “regular” job and the protector’s job at the same time.
As time went on, these citizen protection organizations codified their “protection insurance” and started branching out into other business ventures, running gambling houses, prostitution, loans, and other, less savory but economically worthwhile businesses. Thus, the “modern” thieves’ guild was born. Because of this “community-oriented” origin, a city will typically have several different thieve’s guilds, all effectively rivals of each other, and each with their own territory.
Now, they are quasi-legal business ventures, much like a modern, diversified corporation. Much of what they do is perfectly legal, some is definitely illegal, and some of their practices fall into the legal grey area in between. Quite often, it’s pay to play, with large sums of money going to the local lords to look the other way.
In this time, the jobs of the City Guard have also evolved. They do more crime fighting than they used to, although really only for crimes involving the ruling elite and those rich enough to have political influence. They rarely bother with street crime, unless they actually see it happening (and then only for publicity purposes, mostly). If a poor person wants justice, they go to their local thieves’ guild to find it, because they are the ones who have been being paid to protect them.
The protection money isn’t just to keep the member thieves from stealing from the insured, it’ also to keep outside thieves from stealing from them. If there is an actual theft, they will go after the thieves and try to get some measure of justice, as well. This was the original job of the enforcers. While the “modern” job of an enforcer is to enforce the will of the guild, originally they were the ones that enforced justice. Like most organizations, their mandate evolved over time, becoming corrupted.
Port Karn Legality Notes
In general, if it’s taxed, it’s legal, if it’s avoiding taxes, it’s illegal. If the victim is a peasant (ie, not rich), law enforcement is often lax. If something isn’t causing a problem for the local people in power, it’s “legal”, in the sense that laws against it won’t necessarily be enforced, if they are on the books at all.
Some specifics:
Drug sale and use is technically legal. The ones that aren’t are the ones that cause the local powers trouble, such as those that might cause massive productivity losses, high chances of mortality, etc.
Prostitution is legal if taxed. Sex work? Fine, but the State wants a cut of the profits.
Slavery is illegal, although it often happens anyway, and it’s not always enforced. It’s another case of “if it doesn’t hurt the powers that be, it’s not a problem”.
Kidnapping is illegal. Few people kidnap the poor, who can’t pay ransoms anyway. Kidnapping usually only happens to the rich and powerful, so of course it’s illegal.
Murder is technically illegal, but often overlooked if the victim is “only” a peasant. Although the death of well-trained peasants who are bringing in a profit to the elites will be looked into.
Theft is technically illegal, but rarely enforced by the local government, although it is somewhat enforced by the guilds. Members stealing from citizens who have paid their protection money have violated the guild codes, so they will be punished. Hence the reason most thieves steal from areas controlled by other guilds. Although in that case, they need to worry about that other guild’s enforcement team….
Gambling is legal if taxed, illegal if untaxed.
Money Laundering is technically legal, mostly because it’s hard to track, and there isn’t a law enforcement group able to follow the money in a modern sense in order to catch the criminals. Because of this, money laundering isn’t really much of a thing. Because money isn’t “dirty” in the first place, it doesn’t really need to be laundered.
Fencing (selling stolen goods) is technically illegal. But, since transactions aren’t really recorded, it’s rarely enforced and hard to prove.
Assault is illegal.
Rape is illegal.
Armed Robbery falls under “theft”.
But speaking of arms, the City Guard is allowed to be armed, even with weapons of war (polearms, other primary weapons). Sidearms are legal, although they will draw attention. Often, sidearms are put in the cloakroom in public establishments. Knives are legal, as they are tools as much as weapons. Daggers (knives designed primarily as weapons, rather than as tools) fall under the same category as sidearms. Bows are legal, as they are used for hunting. Staves, truncheons, and clubs are all legal, since trying to keep people from picking up sticks is ridiculous. Heavy armor is legal, but wearing it in public draws attention (in the exact same way that people walking around in “tacticool” gear draw attention—that is, people assume you are looking for trouble). In fact, wearing armor around town, while technically legal, draws attention. It’s usually quite warm around Port Karn (think Florida), and wandering around, even in just gambeson, is like seeing someone in a parka wandering around Miami.