Print this pageHistorical Text Archive © 1990 - 2013
FACTORY SYSTEM AND COTTAGE INDUSTRY
In this assignment, you should learn to identify and discuss:
In addition, you should also have considered the following issues:
Although I mentioned in the previous essay that the guild system failed because it was not adapted to a competitive economy, I did not discuss in any detail why the medieval economy, which had been expanding almost constantly ceased to do so after about 1250.
In about 1796, Mr. Malthus, an English gentleman had finished reading a book that had optimistically predicted that human life would continue to grow richer, more comfortable and more secure, that nothing could stop the march of progress. He discussed this theme with his son, Thomas, and Thomas emphatically disagreed with his father, the book he had been reading, and the entire idea of unending human progress. His father suggested that he write down his objections so that they could discuss them point by point. Not long after, Thomas returned with a rather long essay. His father read it and was so impressed that he urged his son to have it published. And so, in 1798, Thomas Malthus's An Essay on Population appeared. Although it was attacked at the time and ridiculed for a long time afterward, it has remained one of the most influential works in the English language.
Malthus assumed that people would generally have as many children as they could rear. There are several valid reasons for this assumption, and, so far, attempts to control population growth have proven ineffective. Malthus was also willing to concede that production might also increase, but he pointed out that production increases arithmetically, but population increased geometrically. Let's think about that for a minute. Let's say that we have a population of 1000 who produce X amount of goods, enough to maintain them in comfort and good health. Let's then say that they invent something that allows them to increase their production by 100% so that they are producing 2X amount of goods. But each of the couples that make up the population, times being good, have four children who reach maturity. At the end of a generation, the population numbers 2000 and they produce 2X amount of goods. So far, the ratio of goods to people is the same as it was in the previous generation, since 1X/1000 is the same as 2X/2000.
Then they invent something else that allows them to increase their production to 3X. But the 1000 couples comprising the population each have four children, and so the population rises to 4,000. This means that the standard of living is dropping since 3X/4000 is considerable less than 2X/2000. Another inventions raises production to 4X, but population rises 8,000, and another round raises production to 5X and population to 16,000. Population is now rising much faster than the available supply of goods.
Under such conditions, the price of goods begins to rise simply because there isn't enough to go around. People begin to compete for the available wealth and, although some become able to buy more than the average, most people have to spend most of their income for food and shelter. These means that the number of people able to buy manufactured goods begins to drop. Manufacturers try to increase their sales by lowering prices, but they can do that only by paying less for raw materials and cutting their workers' wages. But this means that their workers and suppliers have less money to buy things, and this decreases the market for anything but food and shelter still further. Much of the resources of labor and capital that have been devoted to manufacturing has to be shifted to agriculture, and more land is put under cultivation, even if it is land that is not very productive under the best of circumstances. But all of this makes very little difference, since the population is still rising faster than production.
Eventually, at least theoretically, things reach what is called a Malthusian climax, in which there is now way of producing enough to provide the population with sufficient food and shelter for them to stay alive. The population must be reduced, and this can occur in any of a number of ways. The most common is a famine, in which large numbers of people starve to death and many more are so weakened that they fall victim to any of a number of normally minor illnesses. Another way in which such populations are decreased is by disease, often of epidemic proportions, that kills a significant portion of the population. A third possibility is warfare, often within the population itself, in which one portion of the society pursues the genocide of another portion. There is still another path for population decrease. If there is empty land available, or land that can be taken away from its inhabitants -- especially if its inhabitants are not making full use of the resources at their command -- part of the population can emigrate and establish colonies.
Even these solutions are only temporary, however, since the population will only begin to grow again once it is no longer limited by the available resources. Sooner or later, Malthus suggested, the population will once again reach a climax and will have to be decreased one way or another. What about population limitation through birth control? Malthus, in effect, said that he would accept that as a possibility only when he saw it practiced successfully. He did not believe that human were capable of such rational discipline. By and large, little attention was paid to Malthus's theories during the course of the eighteenth and nineteenth centuries. The production increases brought about by the Industrial Revolution regularly outstripped the increase in world population. In the twentieth century, though, medical advances, such as the eradication of smallpox and the general control of malaria, cholera, and yellow fever, allowed world population to begin to increase at a faster rate.
We'll return to this matter later in the course. Right now, the important consideration is that, starting in about 1250, the growth of European population started to outstrip the growth of the European economy. Markets began to dwindle, and people began to compete to sell what they were accustomed to produce and to maintain their customary standard of living. The capitalist organization of production was better adapted to these new competitive circumstances than was the old guild organization, partly because the capitalist producers did not use any of their profit for the public good. Moreover, the capitalist organization of the economy did not solve the problems created by a growing population. In 1300, a greater portion of the land of Europe was being used for food crops than ever before or ever since. But, in 1315-1317, a spell of bad weather caused a continent-wide famine in which some ten percent of the population died. It was not until the 1340's, however, that a long-term "solution" arose. The Black Death, or bubonic plague, swept through Europe and, in the space of about five years, killed about a third of the inhabitants of the continent. This was only the first of many epidemics that would periodically act as a check upon Europe's population.
There were factors other than population increase that contributed to the emergence of European Capitalism, but the increase of population and the resultant impoverishment of the Europeans was certainly one of the important factors to be considered. The results of the transformation of the European economy are well-worth thinking about. In the guild system, the owner of a business worked and lived alongside his employees, and the employees could look forward to having their own businesses someday. The capitalist rarely associated with his workers and certainly did not wish to pay them enough so that some of them might eventually become his competitors. A great gulf had been opened between workers and owners. Then, too, the capitalists did not, as a matter of course, devote much of their time, attention, or resources to the public good. Under the guild system, the economy and the welfare of society had been closely linked. The rise of capitalism broke that link. Finally, the guild master sought to rise to a comfortable level of living, and his fellow guild members would have prevented him from growing rich by producing shoddy goods, engaging in false advertising, rigging the market, driving others out of business, or any of a number of activities that soon became more or less standard business practices of the capitalists. The responsibility of the manufacturer to his profession and, by extension, to the public was ended.
This perhaps paints too dark a picture, but it is interesting to speculate how a modern society with an economy organized according to the guild system might operate.
One of the reasons for the outbreak of the Black Death in the 1340's was the fact that the Mongols, under Genghis Khan, had established an empire extending from China in the East to the Black Sea in the West. Trade and communications were now much easier between East and West, and Western Europe's long isolation had come t an end. There was a disadvantage to this, however, in that Europe was now open to the spread of diseases from outside. Empires Beyond the Great Wall: The Heritage of Genghis Khan offers a good picture of the establishment of the Mongol empire. There is a brief discussion of the effects of the Black Death that may interest you.