The putting-out system, also known historically as the domestic system or workshop system, was a method of subcontracting production in which a central agent, often a merchant or manufacturer, distributed raw materials to workers who completed the work in their own homes or small workshops. This system was widely used in pre-industrial Europe and early America, particularly in the textile industry, shoemaking, lock-making, and the production of small firearm parts. It flourished from the late Middle Ages through the Industrial Revolution, gradually declining in the mid-19th century with the rise of centralized factory production.
Historical overview The putting-out system was embedded in the socio-economic structures of agrarian and early-industrial societies. For most workers, it was not a voluntary or entrepreneurial choice but a necessary means of supplementing family income. The system was particularly suited to pre-urban rural economies, where travel to centralized workplaces was impractical, and households combined production tasks with agricultural and domestic chores. The putting-out system is often regarded as a form of proto-industrialization, representing a transitional phase between artisanal production and factory-based industrial capitalism. Although mechanization and factory labor largely replaced domestic production in industrialized nations by the late 19th century, analogous forms of decentralized, home-based subcontracting still persist in parts of China, India, and South America, especially in labor-intensive industries. However, these contemporary practices differ significantly from the historical domestic system in terms of technology, labor relations, and economic context.
By industry
Firearms The historian David A. Hounshell writes: In 1854, the British obtained their military small arms through a system of contracting with private manufacturers located principally in the Birmingham and London areas ... Although significant variation occurred, almost all of the contractors manufactured parts or fitted them through a highly decentralized, putting-out process using small workshops and highly skilled labor. In small arms making as in lock production, the "workshop system" rather than the "factory system" was the rule. This system of dispersed processes was supplanted by inside contracting and, later, the factory system.
Cottage industry
A cottage industry is an industry—primarily manufacturing—which includes many producers, working from their homes, and originally was often organized through the putting-out system. The biggest participants in this system were the merchant capitalist and the rural worker. The merchant would "put out" basic materials to the cottage workers, who then prepared the materials in their own homes and returned the finished merchandise back to the merchant. The term first referred to home workers who were engaged in a task such as sewing, lace-making, wall hangings, or household manufacturing. Some industries which are nowadays usually operated from large, centralized factories were cottage industries before the Industrial Revolution. Business operators would travel around the world, buying raw materials, delivering them to people who would work on them, and then collecting the finished goods to sell locally or typically to ship to another market. One of the factors which allowed the Industrial Revolution to take place in Western Europe was the presence of these business people, who had the ability to expand the scale of their operations. In Russia, the Kustar were rural artisans engaged in cottage industries. Such industries were very common at a time when much of the population was engaged in agriculture, because the farmers and their families often had both the time and the desire to earn additional income during the part of the year (winter) when there was little work to do in farming or selling produce.
By region
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