Mysterious moves

R. PARTHASARATHY

Bill Phillips visualised that with a nifty bit of plumbing, he could build a machine to analyse the workings of the nation's economy. This computer model (1950) - created out of tubes, valves and sluices that ran on water - is now at display at the Science Museum, London. As electronic computers arrived on the scene, punch tape giving way to visual displays, his marvellous machine was retired.

Bill saw ingenuity at work in his home, having grown up in a diary farm. His mother installed running water in the house some of which his father diverted to generate electricity for lighting the milking shed. So at the age of 15 he was an apprentice electrician.

Soon he travelled to Australia where he took up odd jobs - picking bananas, mining gold and hunting crocodiles. The travel bug took him to England, via Japan and Siberia. He landed in London in 1937. All the time he was studying by correspondence course to become an engineer.

When World War II broke out, Phillips joined the RAF and saw active service for the next few years. He was captured by the Japanese and spent three and a half years in Java as prisoner of war (POW). In the camps, he displayed his engineering skills. He made a secret radio and an electric heater, by which the prisoners could have a warm cup of tea before lights were switched off. When 2000 cups of tea were warmed, the lights of the camp dimmed exactly at 10 p.m. which puzzled the Japanese.

Back in London in 1946, he enrolled at the LSE to study sociology. He worked hard to follow the latest theories which his teachers tried to explain. "...money moves in mysterious ways, through a tangled web of taxes and investments, imports, and exports, all inextricably tied together".

He found economics harder than plumbing. But he felt it would be easier to demonstrate the covoluted workings of the nation's economy through a machine.

Phillips had spent too much time in evolving his hydraulic model of the economy to the neglect of his sociological studies. He just scraped through the course with a pass.

Out of sheer despair, he wrote candidly to one of his economics teachers. "I have great difficulty in trying to understand your lectures. I know something about plumbing and have tried to sketch a hydraulic model."

Phillips was not packed off but was sent to meet James Meade, professor of Economics who was interested in technical applications. The latter asked him to show practically how his idea would work.

Accordingly Phillips worked hard in a garage in south London; he produced a huge machine, consisting Perspex tubes, levers and pulleys, caliberated charts, etc., which he demonstrated before a sceptical audience.

Though it looked like a bizarre piece of plumbing, it was indeed the computer that could model the flow of money, including the effects of a whole range of factors on the national income. The ingenious machine is described in the New Scientist (December 1, 2000) as follows:

"The movement of money was represented by the water flowing round the Perspex pipes and the accumulation of money by water collecting in tanks. As water flowed through the machine, the stream split, with savings round one loop, taxes sloshing along a separate pipe and imports trickling through another". To everyone's surprise, the machine, taller than the man in the street, worked. If inflation rose too high, water squirted out through a hole, leaving a pink puddle on the floor.

The popular magazine Punch called it the "finance phalograph" and even recommended installing it in every town hall.

Phillips built improved models, 14 in all, which were supplied to British Universities, Harvard University, Ford Motor Company and the Bank of Gautemala.

This invention was followed by his next idea, the Phillips Curve which demonstrates how wage hikes lead lengthening dole queues, for which he is remembered today. This brought him accolade, Professorship at LSE and international reputation as a brilliant economist.

(Source: "Liquid Assets" NS Dec. 2000 by Stephanie Pain, New Scientist December 1, 2000).

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