The words and lyrics of the nursery rhyme 'Hey diddle dinkety, poppety, pet' celebrate the role of the guilds and "The Merchants of London they wear scarlet". The word “guild” is from the Saxon “gilden” meaning "to pay" and refers to the subscription paid by the members. The guilds were licensed from 1170 and were similar to modern labor unions where the guilds set standards for their professions and protected the interests of their members.
The Ceremonial Livery
The formal name for the London guilds are livery companies. This referred to the elegant apparel, called livery, that their guild members wore on special and ceremonial occasions. The livery was adopted by the guilds of London in the reign of King Edward III (1312 - 1377). The clothes, or livery, worn by the merchants were extremely important as they identified the merchants with a specific guild and distinguished their members from one another. The merchants would wear their livery when they marched in parades and processions and attended ceremonies and other Royal gatherings "So merrily march the merchant men". This humble little nursery rhyme celebrates the commerce of the City of London.