New ways of profit: The Cottage Industry and the Factory System

Scarves by Mr. Morelli: Cottage Industry What do I need? – A physical space to make the scarf – A loom to weave on and/or needles to make the scarf – Wool or cotton – Dye – CAPITAL to buy this stuff THE COTTAGE INDUSTRY – A middleman buys the wool, cotton, dye – The middleman hires ME to make the scarf in my house because I have the SKILL of weaving, knitting, or crocheting – When the middleman sells the scarf, I get a cut of the profit

SCARFAPALOOZA: The Factory System THE FACTORY SYSTEM – Giant warehouse to have mechanical looms – Workers who may or may NOT have the skill to weave or knit or crochet, but can be taught how to operate the mechanical looms – THE AMERICAN SYSTEM: Assembly line + interchangeable parts + unskilled labor = mass production What do I need? – A physical space to make the scarf – A loom to weave on and/or needles to make the scarf – Wool or cotton – Dye – CAPITAL to buy this stuff

Which one is which?

Pros and Cons? Cottage IndustryFactory System