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00:00:00 – 00:07:43
In the video, Paul Sergeant explores the "putting out system," a precursor to the factory system that arose in 18th-century Europe, primarily in England. This system allowed entrepreneurs to bypass the rigid guild system, which had strict regulations limiting new trade and industry entrants. Entrepreneurs provided raw wool to subsistence farmers who processed it in their homes into thread and cloth, which the entrepreneurs then collected, paid for, and sold. This decentralized production improved farmers' living standards and circumvented guild restrictions. However, it also introduced inefficiencies due to the constant transportation of materials. Eventually, this led to the consolidation of production into single locations, marking the transition to the factory system and driving urban migration for factory jobs. Paul concludes by encouraging viewer engagement and inquiries about European history.
00:00:00
In this part of the video, Paul Sergeant introduces the concept of the “putting out system,” also known as the cottage industry, which emerged in Europe in the 18th century. He explains that this system facilitated entrepreneurial activity by bypassing the restrictive guild system of the Middle Ages, which had set stringent regulations on trade and industry. Under the guild system, entry into business required meeting various requirements and obtaining guild approval, which limited new entrants. The putting out system allowed entrepreneurs, especially in England, to sidestep these barriers by having products made outside the guild’s control. Specifically, in the wool cloth industry, entrepreneurs would purchase wool and distribute it to rural homes where individuals would produce goods, effectively decentralizing production and fostering economic change.
00:03:00
In this part of the video, it is explained how entrepreneurs worked with subsistence farmers to transform raw wool into finished cloth. Farmers, who had little disposable income and ample free time, would spin wool into thread during the evenings and winter months. Entrepreneurs collected this thread, provided payment and more wool, then passed the thread to other families who wove it into cloth. This cycle enabled entrepreneurs to bypass guild restrictions and facilitated a profitable business model of buying and selling. For the farmers, this system allowed them to earn extra cash and improve their standard of living by purchasing goods they otherwise couldn’t afford. However, there were downsides, including increased competition among farmers and the inefficiency and risks faced by entrepreneurs in transporting goods.
00:06:00
In this segment of the video, the speaker discusses the inefficiencies of constantly transporting materials and suggests that consolidating production into a single location, or building, might be more effective. The speaker explains the cottage industry, where entrepreneurs utilized rural labor, moved products between locations, and created finished goods, particularly in the woolen cloth industry. This system improved living standards and increased demand for luxury goods in rural areas. The ultimate result would be the development of the factory system and urban migration for factory jobs. The speaker, Paul Sargent, encourages viewers to ask questions about European history in the comments or via email and expresses a desire to help.