The pressure to produce more goods for a growing market and to reduce the labor costs of manufacturing was directly related to the first decisive breakthrough of the Industrial Revolution: the creation of the world’s first machine-powered factories in the British cotton textile industry. Technological innovations in the manufacture of cotton cloth led to a new system of production and social relationships. This was not the first time in European history that large numbers of people were systematically put to work in a single locale; the military arsenals of late medieval Venice are one example of a much older form of “factory.” The crucial innovation in Britain was the introduction of machine power into the factory and the organization of labor around the functioning of highly productive machines.

The putting-out system that developed in the seventeenth-century textile industry involved a merchant who loaned, or “put out,” raw materials to cottage workers who processed the raw materials in their own homes and returned the finished products to the merchant. There was always a serious imbalance in textile production based on cottage industry: the work of four or five spinners was needed to keep one weaver steadily employed. Cloth weavers constantly had to find more thread and more spinners. During the eighteenth century the putting-out system grew across Europe, but most extensively in Britain. There, pressured by growing demand, the system’s limitations began to outweigh its advantages around 1760.

Many a tinkering worker knew that a better spinning wheel promised rich rewards. It proved hard to spin the traditional raw materials — wool and flax — with improved machines, but cotton was different. Cotton textiles had first been imported into Britain from India by the East India Company as a rare and delicate luxury for the upper classes. In the eighteenth century a lively market for cotton cloth emerged in West Africa, where the English and other Europeans traded it in exchange for slaves. By 1760 a tiny domestic cotton industry had emerged in northern England, but it could not compete with cloth produced by low-paid workers in India and other parts of Asia. International competition thus drove English entrepreneurs to invent new technologies to bring down labor costs.

After many experiments over a generation, a gifted carpenter and jack-of-all-trades, James Hargreaves, invented his cotton-spinning jenny about 1765. At almost the same moment, a barber-turned-manufacturer named Richard Arkwright invented (or possibly pirated) another kind of spinning machine, the water frame. These breakthroughs produced an explosion in the infant cotton textile industry in the 1780s, when it was increasing the value of its output at an unprecedented rate of about 13 percent each year. By 1790 the new machines were producing ten times as much cotton yarn as had been made in 1770.

Hargreaves’s spinning jenny was simple, inexpensive, and powered by hand. In early models from six to twenty-four spindles were mounted on a sliding carriage, and each spindle spun a fine, slender thread. The machines were usually worked by women, who moved the carriage back and forth with one hand and turned a wheel to supply power with the other. Now it was the male weaver who could not keep up with the vastly more efficient female spinner.

Arkwright’s water frame employed a different principle. It quickly acquired a capacity of several hundred spindles and demanded much more power than a single operator could provide. A solution was found in waterpower. The water frame required large specialized mills to take advantage of the rushing currents of streams and rivers. The factories they powered employed as many as one thousand workers from the very beginning. The water frame did not completely replace cottage industry, however, for it could spin only a coarse, strong thread, which was then put out for respinning on hand-operated cottage jennies. Around 1790 a hybrid machine invented by Samuel Crompton proved capable of spinning very fine and strong thread in large quantities. Gradually, all cotton spinning was concentrated in large-scale water-powered factories.

These revolutionary developments in the textile industry allowed British manufacturers to compete successfully in international markets in both fine and coarse cotton thread. At first, the machines were too expensive to build and did not provide enough savings in labor to be adopted in continental Europe or elsewhere. Where wages were low and investment capital was more scarce, there was little point in adopting mechanized production until significant increases in the machines’ productivity, and a drop in the cost of manufacturing them, occurred in the first decades of the nineteenth century.

Families using cotton in cottage industry were freed from their constant search for adequate yarn from scattered part-time spinners, since all the thread needed could be spun in the cottage on the jenny or obtained from a nearby factory. The income of weavers, now hard-pressed to keep up with the spinners, rose markedly until about 1792. They were among the highest-earning workers in England. As a result, large numbers of agricultural laborers became handloom weavers, while mechanics and capitalists sought to invent a power loom to save on labor costs. This Edmund Cartwright achieved in 1785. But the power looms of the factories worked poorly at first, and did not replace handlooms until the 1820s.

Despite the significant increases in productivity, the working conditions in the early cotton factories were atrocious. Adult weavers and spinners were reluctant to leave the safety and freedom of work in their own homes to labor in noisy and dangerous factories where the air was filled with cotton fibers. Therefore, factory owners often turned to young orphans and children who had been abandoned by their parents and put in the care of local parishes. Parish officers often “apprenticed” such unfortunate foundlings to factory owners. The parish thus saved money, and the factory owners gained workers over whom they exercised almost the authority of slave owners.

Apprenticed as young as five or six years of age, boy and girl workers were forced by law to labor for their “masters” for as many as fourteen years. Housed, fed, and locked up nightly in factory dormitories, the young workers labored thirteen or fourteen hours a day for little or no pay. Harsh physical punishment maintained brutal discipline. Hours were appalling — commonly thirteen or fourteen hours a day, six days a week. To be sure, poor children typically worked long hours in many types of demanding jobs, but this wholesale coercion of orphans as factory apprentices constituted exploitation on a truly unprecedented scale.

The creation of the world’s first machine-powered factories in the British cotton textile industry in the 1770s and 1780s, which grew out of the putting-out system of cottage production, was a major historical development. Both symbolically and substantially, the big new cotton mills marked the beginning of the Industrial Revolution in Britain. By 1831 the largely mechanized cotton textile industry accounted for fully 22 percent of the country’s entire industrial production.