A system of manufacturing where individuals produce goods within their homes, utilizing their own tools and resources, defines a prominent pre-industrial economic model. This production method contrasts sharply with factory-based manufacturing, as it relies on decentralized labor and household-level operations. A common example includes families spinning yarn or weaving cloth at home for a merchant who provides the raw materials and markets the finished product.
This method of production offered several advantages in its historical context. It provided supplemental income for farming families, especially during off-seasons. It also allowed for greater flexibility and autonomy for workers, as they could often set their own hours and work at their own pace. Furthermore, it played a significant role in the development of early capitalist systems by connecting rural producers to wider markets and facilitating the accumulation of capital by merchants.