The Coevolution of Technology and Organization in the Transition to the Factory System

This essay is a reinterpretation of the debate over the origins of the factory system. In the end, it argues, the explanation for the rise of the factory system lies in the realm of organization, but not in the qualities of organization envisaged by either the "radical" view or the transaction-cost view. Drawing on the recent explanations of Clark and Lazonick, the paper suggests that the explanation lies in the volume effect rather than the division-of- labor effect of increasing extent of the market. The essay closes with some musings on the logic of both efficiency and exploitation in historical explanation.