A manufacturer, for instance, who turns out 200,000 pieces of cotton goods in a year, is able, because he procures his raw material more cheaply on a large scale and because the profit on his capital and the interest on his plant is distributed over so large a number of pieces, to market each piece, within certain limits, at a far lower price than the manufacturer who produces yearly only 5,000 such pieces.  Greater cheapness of production leads accordingly to production on a large scale.  This results, in turn, in greater cheapness; this in its own turn brings about production in still greater quantities, and this still greater cheapness, and so on.

The relations are also quite similar in the matter of division of labor, which is another necessary condition for production in large quantities and for cheapness, for without it neither cheapness of production nor large quantities would be possible.

The division of labor which splits up the production of an article into a great number of very simple and often purely mechanical operations requiring no thought on the part of the operative, and sets at each one of these single operations a single workman, would be entirely impossible without extensive production of this article.  It is therefore established and extended only through such production.  On the other hand, this division of the work into simple operations leads (1), to a constantly increasing cheapness; (2), to production in enormous and constantly increasing quantities—­a production calculated not only for this or that neighboring market, but for the entire world-market; and (3), through this and through new divisions which can for this reason be applied to single operations, to still farther advances in the division of labor itself.

By this series of actions and reactions there had accordingly appeared a complete transformation in the manufacturing institutions of the community and hence in all its relations of life.  The best way to state this briefly is to reduce it to the following contrast: 

In the early Middle Ages, since only a small number of very valuable products could stand the expense of transportation, production was calculated for the need of the immediate locality and a very limited neighboring market whose demand was, just for this reason, a well-known, steady, and unchanging one.  The need or the demand preceded production and formed a well-known criterion for it; in other words, the production of the community had been chiefly artisan production.  Now, in distinction from factory or wholesale production, the character of small or artisan production is this:  Either the need is awaited before production—­as, for example, a tailor waits for my order before he makes me a coat, a locksmith before he makes me a lock; or even if some goods are manufactured to be sold ready-made, on the whole this ready-made business is limited to a minimum of what is definitely known from experience to be the needs of the immediate locality and its nearest neighborhood—­as, for instance, a tinsmith makes up a certain number of lamps, knowing that the local demand will soon dispose of them.