Sydney Chapman (economist) - Recent Reference To Chapman's Theory

Recent Reference To Chapman's Theory

In 2001, the government of the Australian state of Queensland highlighted Chapman's theory of the hours of labour in their submission to the Australian Industrial Relations Commission on the "Reasonable Hours" test case. They presented the following summary of Chapman's argument:

The main points of this argument can be summarised as follows:

• a mass of evidence indicating that reductions in hours of work had not led to proportionate declines in output;
• modern industry fatigue was less physical in nature and more a combination of psychological and physiological as a result of specialisation and increased need for mental concentration;
• the reduction of hours allowed better-rested workers to produce as much or more in the shorter hours;
• the total value of the output would initially rise as the working day increased but eventually the total output as well as the output per hour would decline as the working day became so long that it prevented adequate recovery from fatigue for workers;
• this is the case because, beyond a certain point, each additional hour of work would be contributing to the output of the current day's total output but at the expense of the following day's output capacity; and
• the intensity of the work involved would dictate the point at which total output begins to fall and thus the length of the 'optimal' working day.

The second half of this argument explores whether the free market can arrive at the 'optimal' length of day, and can be summarised as follows:

• the maintenance of a long-term optimum by employers would require short-term restraint;
• each individual employer could never be certain of reaping the benefit of their restraint as another firm could potentially entice the employer's well-rested workers away with a wage premium;
• therefore the optimal output work time is a form of investment without equity;
• simultaneously, Chapman (1909) assumed that workers would choose a longer working day than was prudent (although not as long as the working day preferred by employers), primarily because of a general short-sightedness that would mean workers would consider their immediate earning capacity more than their longterm earning capacity; and
• the outcome in a free market situation would therefore be one where employers and employees acting in self-interest would each tend to select a working day that was longer than the 'optimal' hours.

Chapman (1909) considered three elements in gauging the optimal day for the worker;

1. the wage,
2. the marginal value of leisure and
3. the disutility of work.