By Maurice Dobb
A research of capitalism and the way it got here into being.
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Additional info for Capitalism Yesterday and Today
Some- thing like this happens in the market situation that has come to be known as the 'price leadership' case, where 44 a large firm (or a group of large firms) co-exists in an industry with a considerable number of smaller firms. There is no explicit agreement between them and the latter remain independent competitors; yet the former is able to fix the price at what is most profitable to it- self, and the latter do not undercut this price, but are content to take whatever share of the market is left to them rather than risk a price-war with their stronger rival.
Hence the terms 'domestic or cottage industry', sometimes the 'putting-out system', have been variously used to describe what was the most characteristic form of production in this early, pre-in- dustrial-revolution stage of capitalism, which Marx called the stage of 'manufacture' to contrast it with the later 'machinofactme' ushered in by the industrial rev- olution. But why speak of this as a stage of capitalism at all? The workers were generally not proletarianised: that is, they were not yet separated from their instruments of production, nor even in many cases from occupation of a plot of land.
While it is true that at this date the situation was transitional, and capital-to-wage-labour relations were still immaturely developed, the latter were already be- ginning to assume their characteristic features. In this putting-out system the employer-employed relation was clearly discernible, and the price the domestic craftsman received for his product came increasingly to resemble a piece-wage for the work done. The artisan-craftsman's independence and hold upon his instruments of produc- tion were rapidly losing anything but a nominal char- acter.