Title: Factory System | Encyclopedia.com
Headings: Factory System
Factory System
Factory System
BIBLIOGRAPHY
factory system
factory system

Content: While this mode of production began with the cotton and textile industries, it was the development of the steam engine that fully established the shift from craftspeople and localized production into production under the factory system. There are several interconnected factors beyond technological innovation that created the factory system in England in its particular moment in history. One was the development of banking institutions, which were able to channel investments into the establishment of factories, and which were also able to facilitate economic exchange. Similarly, landowners were able to take advantage of the banking industry ’ s low interest rates to facilitate and finance the development of transit systems, created to move goods produced under this new system. At the same time, a rise in the British population not only increased demand for goods, but also created a large pool of laborers who would eventually work for a wage after the development of the factory system. Finally, social changes in Britain at the time both facilitated the training of upper-middle-class men who would administrate the factory system and also the development of British persons as free workers, as opposed to serfs, who could sell their labor power in exchange for a wage. As such, the development of the factory system was central to the eventual entrenchment of capitalism on a world scale. It was this very shift in production and landownership, combined with the legal backing of free individuals who may enter into a state-sanctioned contractual relationship, that created what Karl Marx (1818 – 1883) would identify as the two classes in capitalist society: those who own the means of productions and those who own labor power, which they exchange for a wage in the marketplace. Although both workers and owners share the distinction of equality under the law, it was the old aristocrats who were able to develop the infrastructure and purchase the land to develop factories, and the old serfs who had nothing to sell and exchange but their capacity for labor.