THE FINANCEPHALOGRAPHICAL CROCODILE HUNTER

See Also: ECONOMICS; UNIVERSITIES The London School of Economics; WATER SUPPLY

Bill Phillips was born in New Zealand. He was the son of a small farmer who was an inveterate tinkerer. Phillips fils grew up with a taste for making contraptions. At the age of fifteen he secured a job working for the operator of a hydro-electric dam. In order to understand the flows of water through the structure's pipes and parts, he taught himself how to understand differential equations. In 1935 he left New Zealand in order to travel. The jobs that he took during the rest of the decade included spells as a crocodile hunter and as an electrician in a goldmine.

During the Second World War he was honoured for his bravery. However, he spent much of the conflict as a prisoner of war. Subsequently, he washed up in London. He concluded that a better appreciation of sociology might help him to understand some of the experiences that he had had. He studied for a degree in the subject at the London School of Economics. The course did not furnish him with what he had been hoping that it might. Therefore, to dilute it, he took some economics modules that were available to him. He was not impressed by these either. The class of degree that he graduated with was an undistinguished one.

A single insight set him upon becoming an important figure in academic economics. He had noticed how some of the School's economists were using the same differential equations that he had taught himself in his teens. He appreciated that it might be the case that a hydraulic structure could simulate the Keynesian model of the national economy. In 1949 he went to see his former tutor James Meade and told him that he wanted to ascertain whether or not plumbing could be used to simulate the system.¹ The academic was broadminded enough to be open to the idea and encouraged the Kiwi to try to realise it.

During his degree course Phillips had become friendly with Walter Newlyn, who had been a student in the year ahead of him. Both men were autodidacts who had entered higher education as mature students. Newlyn had been appointed to be an economics lecturer at the University of Leeds. He persuaded his new home institution to furnish a 100 grant for Phillips s project. The money was spent on buying the materials from which the device was to be made.

During the summer of 1949 the pair built their Monetary National Income Analogue Computer (M.O.N.I.A.C.). They did so in South Croydon in the garage of Phillips's landlady. The machine was made up of a series of connected tanks, tubes, and valves through which a liquid was to pass. Different individual parts of the device were held to represent distinct sections of the economy. Tanks stood for balances, tubes for exports, savings, and taxation, and valves for domestic expenditure, tax rates, and interest rates. If one part of the economy was affected by the opening and/or closing of particular valves then it would be reflected by the level of fluid in the relevant tanks.

The machine was powered by an engine that had driven the windscreen wiper on a Lancaster bomber. The duo tested a variety of liquids. These included treacle and methylated spirits. The experiments with the latter may have been interesting since Phillips was a dedicated chain-smoker of cigarettes. Ultimately, the two men opted to use dyed water.

In the era before electronic computers, M.O.N.I.A.C. proved to be able to model economic theories with a very small margin of error. About a dozen copies of it were to be built. Alternative names for the device were the Phillips Machine and the Financephalograph.

The following year Phillips was appointed to an economics lectureship at the L.S.E.. It proved to be the case that his mind was suited to the discipline. His career was to flourish. In the subject's literature he established his place in 1958 when he published a paper on the Phillips Curve. This theory established that there was a relationship between wage inflation and unemployment rates.

Location: The London School of Economics, Houghton Street, WC2A 2AE (blue, brown)

The Science Museum, Exhibition Road, SW7 2DD (red, turquoise)

Website: www.sciencemuseum.org.uk/objects-and-stories/how-does-economy-work

¹. Professor Meade was awarded the Nobel Memorial Prize for Economic Sciences in 1977 for his work on international economic policy.

David Backhouse 2024