The factory system was a method of manufacturing first adopted in England at the beginning of the Industrial Revolution in the 1750s and later spread abroad. Fundamentally, each worker created a separate part of the total assembly of a product, thus increasing the efficiency of factories. Workers, paid by wage, and machines were brought together in a central factory. All the processes of production would be carried out under one roof, and would continue as long as it was practical. Arguably the first was John Lombe's water-powered silk mill at Derby, operational by 1721. However, the rise of the factory came somewhat later when cotton spinning was mechanised. Much manufacturing in the 18th century was carried out in homes, especially the weaving of cloth and spinning of thread and yarn, often with just a single loom or spinning wheel. As these devices were mechanised, they replaced the cottagers, who were forced to work in a central factory. Other products such as nails had long been produced in factory workshops, increasingly diversified using the division of labour to increase the efficiency of the system.
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The factory system was largely responsible for the rise of the modern city, as large numbers of workers migrated into the cities in search of employment in the factories. Nowhere was this better illustrated than the mills and associated industries of Manchester, nicknamed "Cottonopolis", and arguably the world's first industrial city. For much of the 19th century, production was done in small mills, which were typically water-powered and built to serve local needs. Later each factory would have its own steam engine and a chimney to give an efficient draft through its boiler.
The transition to industrialisation was not without difficulty. For example, a group of English workers known as Luddites formed to protest against industrialisation and sometimes sabotaged factories. They continued a tradition already established where new machines threatened existing jobs. Numerous inventors in the textile industry such as John Kay and Samuel Crompton for example, suffered harassment when developing their machines or devices.
In other industries the transition to factory production was not so divisive. Some industrialists themselves tried to improve factory and living conditions for their workers. One of the earliest such reformers was Robert Owen, known for his pioneering efforts in improving conditions for workers at the New Lanark mills, and often regarded as one of the key thinkers of the early socialist movement.
By 1746, an integrated brass mill was working at Warmley near Bristol. Raw material went in at one end, was smelted into brass and was turned into pans, pins, wire, and other goods. Housing was provided for workers on site. Josiah Wedgwood in Staffordshire and Matthew Boulton at his Soho Manufactory were other prominent early industrialists, who employed the factory system.
Richard Arkwright is the person credited with being the brains behind the growth of factories. After he patented his water frame in 1769, he established Cromford Mill, in Derbyshire, England. The factory system was a new way of organizing labour made necessary by the development of machines which were too large to house in a worker's cottage. Working hours were as long as they had been for the farmer, that is, from dawn to dusk, six days per week. It reduced the worker to an unskilled commodity who could be easily replaced.
Debate arose concerning the morality of the system, as workers complained about unfair working conditions prior to the passage of labour laws. One of the problems concerned women's labour, which in many cases women were paid almost a quarter of what men made. Child labour was also a major part of the system, and was vehemently argued by those who deemed it immoral. Robert Owen created his utopian socialist factories at New Lanark which provided better working conditions. It was common to work 12 hours a day, six days a week in most factories.