to retain a larger workforce than was typically necessary for insurance against labour shortages in boom times.

Moreover, the organisation of manufacture by merchant capitalists in the textile industry was inherently unstable. While the financiers' capital was still largely invested in raw materials, it was easy to increase commitment when trade was good and almost as easy to cut back when times were bad. Merchant capitalists lacked the incentive of later factory owners, whose capital was invested in buildings and plants, to maintain