Final answer:
The cottage industry and putting-out system had problems such as low wages for unskilled workers, inconsistent product quality, and market saturation in late 1800s which limited growth and profitability.
Step-by-step explanation:
Problems with Cottage Industry and the Putting-Out System
The cottage industry and putting-out system were crucial in the early stages of industrialization but had several problems. One of the main issues was the low wages paid to workers. Because the workers involved in the cottage industry were not skilled artisans and mostly consisted of farm families seeking additional income, they lacked the bargaining power to command higher wages. This meant that the laborers received meager compensations for their work while entrepreneurs gained significant profits from selling the finished products.
Furthermore, this system also limited the quality and efficiency of production. Without standardized methods and the absence of dedicated manufacturing facilities, the quality of the goods produced in these homes was inconsistent and often inferior to those made by skilled craftsmen. This inconsistency could affect the reputation of the products and limit the potential for larger-scale market integration.
Another problem was the saturation of domestic markets in the late 1800s, which led to difficulties in maintaining profitability. As production efficiency increased, the markets became oversaturated with products, challenging producers to find new customers or further expand their markets. This contributed to a shift away from the putting-out system and towards more centralized forms of industrial production.