So again, in the cotton industry of Lancashire, the hold which the merchants had got over the weavers by supplying them with warp and weft led in some cases, before the middle of the century, to the establishment of small factories containing a score or two of looms, in which hired men were employed to weave. A little later, though long before steam power, Arthur Young finds a factory at Darlington with over fifty looms, a factory at Boynton with 150 workers, and a silk mill at Sheffield with 152 workers. Even where the final step of substituting the factory for the home had not been taken the subordination of the handicraftsman to the master who provided the materials and paid the wages was tolerably complete. By the middle of the century the free artisan was gradually passing into the condition of a hired "hand." Improved means of communication were beginning to expand the area of the market, enlarged businesses enabled labour to be profitably divided, and required a more effective control over the workers than could be obtained over a scattered population of agricultural manufacturers.
§ 13. Regarding the Business as a combination of Labour and Capital, we perceive that one strongly distinctive characteristic of the pre-machinery age is the small proportion which capital bears to labour in the industrial unit. It is this fact that enabled the "domestic" worker to hold his own so long in so many industries as the owner of a separate business. So long as the mechanical arts are slightly developed and tools are simple, the proportion of "fixed capital" to the business is small and falls within the means of the artisan who plies his craft in his home. So long as tools are simple, the processes of manufacture are slow, therefore the quantity of raw material and other "circulating capital" is small and can also be owned by the worker. The growing divorcement in the ownership of capital and labour in the industrial unit will be found to be a direct and most important result of those improvements in mechanical arts which, by continually increasing the proportion of capital to labour in a business, placed capital more and more beyond the possession of those who supplied the labour power required to co-operate in production.