Putting-Out System

Definition

The putting-out system, also known as the cottage industry, was an early form of industrial organization where goods were produced in private homes rather than in centralized factories. This system allowed entrepreneurs to distribute raw materials to individual workers or families, who would then create finished products in their own homes. This method enabled greater flexibility and labor specialization, playing a significant role in the economic changes during late medieval Europe.

5 Must Know Facts For Your Next Test

1. The putting-out system emerged as a response to the limitations of guilds and the demand for more goods at lower prices during late medieval Europe.
2. This system contributed to the rise of a more market-oriented economy, as it allowed producers to operate outside of traditional guild regulations.
3. Workers were often paid per piece produced, incentivizing higher output and efficiency compared to earlier production methods.
4. The putting-out system played a key role in the textile industry, especially in the production of cloth and garments, which became highly demanded commodities.
5. As the demand for goods increased, the putting-out system laid the groundwork for the eventual rise of factory-based production during the Industrial Revolution.

Review Questions

• How did the putting-out system impact labor organization during late medieval Europe?
  • The putting-out system transformed labor organization by allowing individuals to work from home rather than in centralized workshops. This shift meant that people could manage their own schedules and work alongside family members, leading to increased productivity. Additionally, it facilitated specialization as different families could focus on different stages of production, thereby enhancing efficiency and output within the economy.
• Discuss how the putting-out system influenced economic practices compared to traditional guild systems.
  • The putting-out system allowed for greater flexibility and competition compared to traditional guild systems, which were often restrictive and regulated. As it operated outside of guild control, it enabled workers to produce goods independently and respond more swiftly to market demands. This shift led to a more dynamic economy where prices could fluctuate based on supply and demand rather than being fixed by guild standards, paving the way for capitalism.
• Evaluate the long-term effects of the putting-out system on the transition to industrialization in Europe.
  • The putting-out system played a crucial role in transitioning Europe toward industrialization by establishing early patterns of production and labor organization. It laid the groundwork for factory systems by demonstrating how goods could be produced efficiently outside of traditional settings. As demand for products grew, this decentralized model highlighted the need for larger-scale production, which eventually led to the development of factories. This transition not only changed production methods but also had significant implications for urbanization, labor relations, and economic structures in Europe.

Related terms

Cottage Industry: A production system where goods are made at home by families or small groups, often working on a piece-by-piece basis.

Mercantilism: An economic theory that emphasizes the role of government intervention in the economy to promote national wealth through trade and accumulation of resources.

Guild System: An association of artisans or merchants who controlled the practice of their craft in a particular town, regulating quality and trade practices.