Large-scale production effects economies in every direction: in buildings, machinery, raw materials, lighting and heating, cost of labour, utilisation of waste products, etc. In fact, let us suppose that there are one thousand small workshops, and that there is one large factory which produces the same quantity of commodities as all the little workshops put together. It is much easier to build one large factory than a thousand small workshops; the raw materials for the workshops will be used far more wastefully; lighting and heating will be much easier in the case of the large factory; the factory will have the advantage in the matter of general supervision, cleaning up, repairs, etc. In a word, there will unquestionably be in all respects an economy, a saving, in running the large factory.
In the purchase of raw materials and of all that is necessary for production, large-scale capital is likewise at an advantage. The wholesale buyer buys more cheaply, and the goods are of better quality; furthermore, the great factory owner is better acquainted with the market, knows better where to buy cheaply. In like manner, the small enterprise is always at a disadvantage when entering the market as seller. Not only does the large-scale producer know better where to buy cheaply (for this purpose, he has travellers; he conducts his business in the exchange, where news concerning various commodities is always coming in; he has commercial ties extending almost all over the world): in addition, he can afford to wait. If, for instance, the price of his product is too low, he can retain it in his warehouses, pending a rise in prices. The small producer cannot do this. He lives from hand to mouth. As soon as he has sold his product, he begins to use for immediate expenses the money he has received; he has no margin. For this reason he is forced to sell willy-nilly, for otherwise he will starve to death. It is obvious that this is a great disadvantage to him.