Before the day of large, expensive steam-driven machinery, manufacture was done in scattered houses by workers who were the owners of their simple tools, and often of the material on which they worked; or in small workshops, where a master worked with a few journeymen and apprentices.

Machinery changed all this.

It drove the workers into large factories, and obliged them to live in concentrated masses near their work.

They no longer owned the material in which their labour was stored, or the tools with which they worked; they had to use the material belonging to their employer; the machinery which made their tools valueless was also the property of the capitalist employer.

Instead of selling the products of their capital and labour to merchants or consumers, they were compelled to sell their labour-power to the employer as the only means of earning a livelihood.
Again, the social relations between the wealthy employer and his "hands" were quite different from those intimate personal relations which had subsisted between the small master and his assistants.