ABSTRACT
Large-scale Production.—The use of power-driven machinery confers obvious advantages on an enlarged output. When the machines are ‘running full’, the standing or overhead expenses are spread over a larger number of units and the cost of producing each is correspondingly reduced. Industry, in contrast to agriculture, is subject to a law of increasing returns or diminishing costs. Everything combines to encourage large-scale production. Closely allied with this tendency, though not inseparably connected with it, goes a movement to increase the size of the technical unit of production. The factory or its equivalent supplants the workshop. For this development, steam has been primarily responsible. Steam naturally makes for industrial concentration. Unlike electricity, it cannot be transmitted over long distances. It must be used on or near the spot where it is created. To fit up expensive steam-driven machines in domestic workshops is quite impracticable, nor can the power be distributed to them from a common centre. As the power cannot be brought to the workers, the workers must come to the power. The machines must be concentrated in a large building or factory, to which the workers resort in order to tend them. It is interesting to speculate on what would have happened if electricity had arrived before steam. Possibly the old system of workshop production might have survived. Indeed, there are some who think or hope that the increasing use of electrical power will bring about a gradual decentralization of industry. 1 But in point of fact, steam came first, and the result was industrial concentration with the substitution of large productive plants for small.
