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.

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.

Given this situation, 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. 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, 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. 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. 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. Gradually, all cotton spinning was concentrated in large-scale water-powered factories.

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. Such child 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.

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.