Proto-industrial production and sales were, it was assumed by the original theorists, governed by ‘a relatively free play of supply and demand between petty industrial producers and merchants’. However, whereas merchants engaged in profit maximization, proto-industrial producers acted in the ways postulated by Alexander Chayanov for peasants: they sought to attain a target income, preferred leisure to consumption at very low consumption levels, and were unable to calculate costs or profits and hence were willing to work at rates below market wages, sometimes even below the rate required to pay for other inputs. When prices and demand worsened, producers responded by ‘enlarging the volume of their production as far as their own and their family's physical strength permitted’ – that is, they increased output irrespective of the returns to labour and other inputs. This worsened crises, creating over-production and unemployment. When prices and demand improved, by contrast, producers reduced production because they were satisfied with a target income and preferred leisure to consumption; this ‘stabilized’ output. However, ‘the emergence of capitalist relations of production’ meant that decisions about how much would be produced began to be made by merchants rather than producers. Consequently, over-production was no longer curtailed by ‘stabilizing’ behaviour on the part of producers. Merchants were profit-maximizers and responded to price decreases by reducing output and to price rises by increasing it.