Manufactory, a capitalist enterprise based on the division of labour and handicraft technology; a stage of the development of capitalist industry, which followed simple capitalist cooperation in the mid-16th century, and which in the last third of the 18th century was replaced by machine production. Manufactory took two forms: 1) the association in one workshop of workers of different specialities, linked by the consecutive performance of all operations in making a relatively complex product (heterogeneous manufactory); 2) the association in one workshop of artisans of the same speciality and the subsequent breakdown of identical jobs into more detailed operations to be done by individual workers (serial manufactory). Here the manufactory personnel consisted of partial workers who performed operations using specialised handicraft tools. This deeper division of labour resulted in greater labour productivity and in the increasing production of relative surplus value. On the other hand, it had chained every worker for life to performing a certain operation, thus impoverishing him mentally, crippling him physically and increasing his dependence on capital. The development of manufactory was accompanied by an increase in the concentration of production and the growing ruin of the artisans. But manufactory based on manual labour could not embrace and restructure all artisan production which prevailed at that time. It helped to expand considerably domestic and international markets, but failed to rppidly satisfy the increasing demand for goods.. Therefore, the necessity arose for a change to a new, machine stage in the industrial development of capitalism (see Machine Production under Capitalism). Manufactory created conditions for this transition because it helped simplify work operations, updated tools, and trained workers in various specialities.