Translated from the German by Belinda Cooper

"Manufactory" (in German, Manufaktur) refers to a large-scale cen-
tralized industrial enterprise with some division of labor, with a
labor force largely on a contractual basis, but with no machinery. Enter-
prises of this type were frequent in the eighteenth century and the early
nineteenth in textiles, metal work, and many other branches of industry.
Factory (Fabrik) refers to a large-scale centralized industrial enterprise
with an increasingly developed division of labor, a labor force largely on
a contractual basis, and at least some kind of machinery in the form of
either power machines (mainly steam engines) or machine tools. In the
course of the Industrial Revolution, factories became the main type of
industrial enterprise.

In some cases, factories were new enterprises founded on a mecha-
nized and centralized basis. Frequently, however, factories emerged from
other sorts of industrial enterprises. Many emerged from small craft
shops. Numerous others developed from decentralized industrial enter-
prises of the cottage industry type (putting-out system), in which mer-
chant-entrepreneurs coordinated numerous workers (for example,
spinners and weavers) who worked primarily in their own homes accord-
ing to the orders of the merchant-entrepreneur and delivered products at

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