West Riding – Western Rhineprovince, 1790-1840: Diverse Paths to ...

West Riding – West of the Rhineland, 1780-1840 10
Alfred Reckendrees, University of Cologne reckendrees@wiso.uni-koeln.de
they could be done (and sometimes were done) with the help of different types of machines.
Production differed, however, not only in the level of labour division and in the
level of mechanisation but it was also arranged in several different types of firms. Before
the elements of the “pre-industrial” systems of production are examined it is necessary to
provide the reader with some terms and definitions.
3. Working Definitions: the Firm, the Machine, and the Factory
3.1 The firm
The economy of industrial capitalism is marked by the transition from artisan manufacture
and merchants putting-out to factory production and to the industrial firm. This did, however,
not eliminate the traditional systems of production and economic organisation whose
share in the goods-producing sector became merely less important. Artisan manufacturers
and merchants went more and more into (other) fields of production in order to exploit
their competitive advantages. It is necessary to distinguish two basis types of industrial organisations:
(1) the firm as an organisation with an economic function, and (2) the unit of
production as an organisation with technical and organisational functions. These are, of
course, basic models in the sense of Max Weber (“Idealtypen”), whereas in the real world
units of production may be a firm, too. The functional distinction of the firm and the unit
of production is nevertheless decisive for economic historical analysis. This conception regards
the firm as an individual economic institution detached from the household of the entrepreneur
that provides goods or services on the markets. 27 The definition is based on the
economic function of the firm and it neglects, at first, specific markets or structures of the
firm.
This simple definition provides the basis for more detailed distinction, if necessary, e.g.
according to structures of ownership (partnership, limited, joint-stock company, etc.) and
control (entrepreneurial, managerial, etc.). In contrast to this, the unit of production, defined
by technical and organisational criteria, provides goods or services that are either offered
to the markets or that are processed in other units of production of the respective
firm. Units of production are, apart from exemptions, not market participants. Based on
this scaffolding difference it is possible to distinguish different units of production (e.g. artisan
workshops, factories). Units of production are producing basically marketable goods
or services while firms provide the markets with goods or services they do not necessarily
produce themselves.
Regarding the woollen cloth industry in the 18 th and 19 th century the marketable goods
were, e.g., wool, yarn, or cloth. The classic case of the entity of the firm and the unit of
production was the artisan workshop where the clothier produced yarn and cloth with the
help of apprentice and journeymen and then sold his product on the regional or local markets.
The extreme opposite was the firm without any unit of production, e.g. cloth merchants
employing only putting out work and artisans but controlling their product all the
27 Similar to European Court, decision T-319/99, 4 march 2003.