cottage industry

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cottage industry:

see sweating systemsweating system,
method of exploiting labor by supplying materials to workers and paying by the piece (see piecework) for work done on those materials in the workers' homes or in small workshops (sweatshops).
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The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Cottage Industry


an initial and early stage in the development of industrial capitalism and a lower form of it. Cottage industry is primarily small-scale domestic commodity production for the market or for the decentralized (distributive) manufactory and is based on the exploitation of the immediate commodity producer, the craftsman, by commercial and industrial capital.

Cottage industry is based on private property in the means of production and the personal labor of the worker. Cottage production (kustarnoe proizvodstvo) is not the same as artisan production (remeslennoe proizvodstvo). In artisan production, the simplest and most primitive form of industry, articles are made on the order of the consumer, and the product of the craftsman’s labor has not yet become a commodity. Cottage production, on the other hand, involves the manufacture of various articles for a broad market. V. I. Lenin was the first to reveal from the viewpoint of Marxist analysis the socioeconomic nature of cottage industry and demonstrated that it was not a special form of “popular production,” as the populists were asserting, but rather was an elementary stage of the development of capitalism in industry.

In prerevolutionary Russia, cottage industry began to develop rapidly after the downfall of serfdom in 1861, with the intensification of the social decomposition of the peasant class. “The formation of a peasant bourgeoisie and of a rural proletariat,” wrote Lenin, “increased the demand for the products of the small peasant industries, while at the same time supplying free hands for these industries and free money” (Poln. sobr. sock, 5th ed., vol. 3, p. 341). In its development in postreform Russia, cottage industry passed through three basic stages: the production of goods for the closest market, to which they were delivered by the commodity producers themselves; production for the more distant market, ties to which were maintained through trade intermediaries, the “buyers-up” (skupshchiki); and capitalist labor at home, the craftsmen and artisans producing goods from the raw materials and supplies of the buyer-up, who became a kind of industrial capitalist, with the small commodity producers becoming virtually hired workers. At this stage, cottage production assumed the form of domestic industry.

Cottage industry developed primarily in regions of agrarian overpopulation and cheap labor power and in those areas where the delivery of machine-made goods was extremely limited by the lack of a convenient, cheap means of communication. For instance, in the former Nizhny Novgorod Province (present-day Gorky Oblast) the production of metal articles developed, including knives, nails, and locks. Shoe production developed in the former Tver’ Province (present-day Kalinin Oblast), the production of articles made of wood (such as sleighs, carts, furniture, and toys) in the northern regions of European Russia, all types of textile and lace trades in the former Moscow and Vladimir provinces, and carpet-making and ceramics in Middle Asia and the Caucasus. The rapid growth of cottage industry signified “a growing social division of labor, the general basis of commodity economy and of capitalism” (ibid., vol. 2, p. 344). The growth of cottage production and the appearance of new trades and the expansion of old ones after the Peasant Reform of 1861 constituted the initial process of capitalist development, “while the swallowing-up of small by large establishments implies a further step forward by capitalism, leading to the triumph of its higher forms” (ibid.).

Cottage industry in Russia shrank in the era of imperialism. In 1913 cottage industry employed 3,706,000 people (within the pre-1939 boundaries of the USSR) and produced 33 percent of total industrial output. The rural population accounted for more than 3 million people, or 75.7 percent, of all those employed in cottage industry. The situation of the workers in cottage industry was extremely difficult in tsarist Russia: a very long workday under unsanitary labor conditions and with very low wages. Cottage industry, Lenin pointed out, is the “worst form of capitalist exploitation” (ibid., vol. 3, p. 9).

The Great October Socialist Revolution freed millions of craftsmen and artisans from harsh exploitation. In the USSR, craftsmen and artisans were united in a producers’ cooperative system during the transitional period from capitalism to socialism, in accord with Lenin’s cooperative plan.

In other socialist countries, the Communist and workers’ parties in the course of the socialist transformation of the economy directed the development of cottage industry along the socialist path by drawing petty commodity producers into producers’ cooperatives. Nearly all of the craftsmen and artisans of foreign socialist countries have been organized into cooperatives.

Cottage industry exists in all the capitalist countries. As the concentration and centralization of production and capital increases, so cottage industry is supplanted to the same degree by large-scale production resulting in the ruination of the small-scale commodity producer. “Such is generally the situation in all capitalist countries. The number of small establishments is decreasing; the petite bourgeoisie, the small proprietors are ruined and go under” (ibid., vol. 22, p. 42). Thus the number of small enterprises (those employing one to five people) in France declined between 1906 and 1926 from 2.2 million to 1.4 million; the number of individual craftsmen declined by 44 percent. After World War II, cottage industry in France continued to shrink.

The number of petty commodity producers passing into the category of wage laborers increased by 35 percent between 1947 and 1955, and the quantity of work put out by craftsmen decreased by one-third in the first postwar decade. In the mid-1950’s, 737,000 independent craftsmen remained in France.

In the USA, where the concentration of production has reached a high level, the number of petty enterprises (one to five persons) has declined sharply. In 1939, petty enterprises (with annual gross product of between $5,000 and $20,000) in manufacturing made up one-third of all industrial enterprises. They employed 2.4 percent of all workers and accounted for a total of 1.2 percent of the industrial output. Hand production of shoes has disappeared altogether, and wood carving, cooperage, coach making, blacksmithing, and many other crafts have all but disappeared.


Lenin, V. I. “Chto takoe ‘druz’ia naroda’ i kak oni voiuiut protiv sotsial-demokratov?” Poln. sobr. soch., 5th ed., vol. 1.
Lenin, V. I. “Ekonomicheskoe soderzhanie narodnichestva i kritika ego v knige g. Strove.” Ibid.
Lenin, V. I. “Kustarnaia perepis’ 1894/95 goda v Permskoi gubernii i obshchie voprosy’kustarnoi’ promyshlennosti.” Ibid., vol. 2.
Lenin, V. I. “Razvitie kapitalizma v Rossii.” Ibid., vol. 3.
Melkaia i kustarno-remeslennaia promyshlennost’ SSSR v 1925 g. Moscow, 1928.
Melkaia promyshlennost’ SSSR po dannym Vsesoiuznoi perepisi 1929 g., issues 1–3. Moscow-Leningrad, 1932–33.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.

cottage industry

an industry in which employees work in their own homes, often using their own equipment
Collins Discovery Encyclopedia, 1st edition © HarperCollins Publishers 2005
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