Were labour markets highly segmented or well integrated in the past?
Do they become better integrated over time as modem economic growth unfolds?
These are important questions.
(Hatton and Williamson 1993, 89)
Profits depend on successful responses to prices in commodity and factor markets, which did not exist before capitalism. Entrepreneurs are most likely to succeed if they operate in perfect markets. In the labour market this requires flexibility: the capacity to treat labour like a commodity, hiring and firing atomized individuals in numbers and at wages appropriate to prices in other markets. Flexible labour supplies characterized periods of rapid economic growth in history. However, labour proletarianization was historically and geographically varied. Even in principle, because labour is not a true commodity, the market on which it is supplied must be imperfect. In practice, imperfections were massive in the coal industry in the industrial revolution because pre-existing workers' cultural traits survived and evolved. A range of examples shows that this ensured wide regional variations in the responses of heavily segmented labour markets as coal output grew, which ramified into other segments of regional labour markets. A more detailed case study shows that south-west Lancashire colliers controlled recruitment through family labour groups and kinship networks; labour was not available in atomized units. Women miners made the region's labour market distinctive, with marked cultural and political effects beyond the coal industry and that region. Because it brought rapid demographic growth, family labour recruitment aided the expansion of production. It ensured a large reserve army if growth slowed, even if demand for labour was rising outside mining. Although it did not promote technological innovation and therefore increased wages and profits in the long run, this imperfect labour market initially benefited development by providing a particular kind of labour-market flexibility in the coal industry.