CAPITALISTS	5583
economic forces were too strong. Therefore control of industry
by the gild was in places non-existent, in others obsolete or
imperfect. The handicraft stage was replaced by the putting-
out system. The characteristic feature of this was that the work
was done for an employer or putter-out who had the wool
distributed to the spinners or the thread to the weavers; and
spinners and weavers were employees as much then when they
were working in their homes as later under the factory system.
So soon as the capitalist employer began to produce on a large
scale for a wide market, the division of labour was inevitable.
The craftsman had, as it were, taken five parts—workman,
foreman (superintending his journeymen and apprentices, if
any), employer, merchant, and shopkeeper. Gradually these
five functions were performed by different individuals. First of
all, the artisan became separated from the master, and this
marks the beginning of a permanent classification of industrial
society into employers and employed. At the bottom of the
scale was the journeyman, the lifelong wage-earner. Next to
him came the small merchant, or shopkeeper, who often made
with his own hands what he sold. Finally there were the
capitalist manufacturer, the employer who was also a merchant,
the shopkeeper who bought what he sold, and the shipping
merchant.1
Not novel in the seventeenth century, but powerfully de-
veloped then, was the company. There had been plenty of
companies before, such as the regulated companies for foreign
trade, but the rapid growth of the joint-stock company was
a new phenomenon. Its evolution can be illustrated by the
history of the East India Company, founded in 1600. At first
its capital, or stock, was raised for each voyage separately.
This was found inconvenient in practice, so the governor and
directors began to raise a joint stock for a number of years—
four, at first. Finally, terminable stock was abandoned and
permanent capital was raised. Even before the last stage was
reached, shares in the common stock were bought and sold,
and both the word 'stockjobber' and the speculator himself
were in existence.
Apart from the professional classes, the industrial system just
outlined absorbed the bulk of the middle classes. There was,
1 This paragraph is mainly based on the Introduction to George Unwin,
Industrial Organization in the i6th and ijth Centuries (1904).