01:510:102 Lecture Notes - Lecture 21: Field System, Putting-Out System, Individual Capital
12 May 2018
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Chapter 21 - Industrial Europe
Traditional Economy:
• Mid 18th Century 89% of Europeans still farmed for a living
• Human Capital (Labor) drove the economy dominated by agriculture
Changes:
• Overseas trade created a greater demand for goods and manufacturing labor
• Agricultural revolution freed labor from traditional agriculture and increased food production
(permissive cause to the Industrial revolution)
NOTE: Both the Agricultural and Industrial Revolutions were "revolutionary in consequence,
rather than development"
Farming Families:
• Open-field System: farming through a communal enterprise to protect and ensure the long-term
viability of the village
1. The village implemented all agricultural decisions in a cooperative manner, while each
individual held strips of land and rights pertaining to the land
2. Effective system to support communal subsistence farming (safer)
3. Limited the number of people who could be survive from output
4. Conservative system:
• No desire for change
• Products were perishable, encouraged subsistence farming
• Feudal Taxes / serfdom discouraged the entrepreneurial spirit
• Failed Risk could spell doom to the entire village
• Growth in Open Field System was through the intensification rather than innovation
1. ie. Clear more land, sow more seed
2. Impact of intensification and the Open Field System was violent economic cycles in which
over population / famine in one generation would lead to surplus in the next (see Malthus)
• Discouraged any attempt to innovate and individual capital investment
Cottage Industry:
• Initially o supplement income families engaged in spinning and weaving through the Putting-Out
System
• As the economic cycles worsened spinning and weaving became a necessary component of life
Putting-Out System:
• Entrepreneur purchased raw material
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• Raw material was "put out" into the homes
• People worked in their homes
• Finished goods were returned, workers paid (piecemeal) and products sold at a profit
Evaluation of the Putting-Out System:
Advantages (Efficiencies)
Disadvantages (Inefficiencies)
- Required only a small amount of capital to
begin
- Low skill and common tools required in
homes
- Fit traditional gender roles (men wove,
women spun)
- Low wages (non-guild members)
- Supported the Open Field System
- Could enter the profession at a younger age
- Reduced marriage age and encouraged more
children (workers)
- Low and inconsistent quality of goods
- Poor workmanship easily ruined raw materials
- Work force was unsupervised, thus
unreliable
- Output was limited to available labor
- Embezzlement of raw materials by workers
- Arbitrary wage cuts by Entrepreneur
- No standardization of products
- Totally dependent upon intensification of labor
for increased output
- No innovation
- Difficult for the production to be
responsive to the overall economy and
shifts in the market place
• Despite the inefficiencies the Putting-out System (cottage industry) dominated production in
Europe by the 1750's.
Change: The Agricultural Revolution
• The continual growth of population and intensification of the traditional economy could work only
so long (eventually you would run out of resources)
1. England and Holland were the first to experience a need to change their economy
• The Agricultural Revolution was one of technique combined with investment of capital and
a commercial attitude
Enclosures: the end of the Open-Field System
Problems with the Open Field System:
• Discouraged private investment
• Prevented innovation
• Prevented agriculture from being responsive to market conditions (focus was on subsistence)
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Consolidation: Enclosing land in the hands of individuals was a precondition for the Agricultural
Revolution
• Poor families were fast to sell out and gain wage employment on the consolidated farms
• Middling sorts (those who did well in the traditional econ.) refused to sell out and were crushed in
direct competition
• The process of enclosure often elicited a violent response (esp. from the middling sorts)
• 19th Century govts. supported enclosure (19th Cent. English Parliament passed legislation)
Impacts:
• The process of enclosing required massive labor
• Made investment profitable
• Encouraged large farm owners to innovate
• Encouraged large farm owners to be responsive to market conditions
• Led to the development of regional agriculture based upon comparative advantage
Innovation:
• Fodder Crops: crops which were primarily used to restore nutrients to the soil
1. Clover and turnip restored nutrients, fed livestock and produced better manure
2. Viscount Charles "Turnip" Townsend popularized the turnip in England
• Four Crop Rotation: replaced the three field system due to use of fodder crops
1. wheat - turnip - barley - clover
• Meadow Floating: flooding of pastures to produce an early spring grass for livestock
1. more livestock meant more manure (fertilizer)
Impact on agriculture:
• More food produced with less human labor
• Greater convertibility b/w grains and livestock depending on market conditions
• Began the process of regional agriculture based on soil and climate conditions
example:
1. in 1700 farmers produced enough food for 1.7 people
2. in 1800 farmers produced enough food for 2.5 people
Impact on society:
• More people
• More demand for all goods (including manufactured)
• More discretionary spending
• More landless rural poor (potential to become urban landless poor)
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