It was
inevitable that both prices and wages should suffer in the process. The
master, of course, could recoup himself by lowering the quality of the
product, but when he did that he lost a telling argument in bargaining
with the consumer or the retail merchant. Another result of this new way
of conducting the business was that an increased amount of capital was
now required for continuous operation, both in raw material and in
credits extended to distant buyers.
The next phase in the evolution of the market rendered the separation of
the journeymen into a class by themselves even sharper as well as more
permanent. The market had grown to such dimensions that only a
specialist in marketing and credit could succeed in business, namely,
the "merchant-capitalist." The latter now interposed himself permanently
between "producer" and consumer and by his control of the market assumed
a commanding position. The merchant-capitalist ran his business upon the
principle of a large turn-over and a small profit per unit of product,
which, of course, made his income highly speculative. He was accordingly
interested primarily in low production and labor costs.
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