Bill Phillips' 1949 Hydraulic Computer Uses Water to Predict the Economy

A colleague sent me a link to a blog post about this remarkable computer developed by Bill Phillips at the London School of Economics in 1949.  It uses water flow to predict the flow of money in the economy.

The guest post on Olivia Judson's blog is by Steve Strogatz and describes a recent visit to his friend Allan McRobie, an enginnering professor at the University of Cambridge. McRobie showed him the amazing machine.

Two weeks ago, while visiting Cambridge University, I arranged to have lunch with my friend Allan McRobie. He’s a professor of engineering, so it seemed a bit strange that he kept insisting we meet at the department of applied economics. “There’s something there you’ve really got to see,” he said in his Liverpudlian lilt. “It’s utterly fab. Just brilliant. The Phillips machine — it uses water to predict the economy.”

Skeptical but willing to go along with the gag, I met him at the appointed place. He led me inside and stopped at the receptionist’s window. “We’re here to see the machine,” he said. She nodded and handed him a key. We made our way through a maze of corridors to the Meade Room, where the machine is housed.

In the front right corner, in a structure that resembles a large cupboard with a transparent front, stands a Rube Goldberg collection of tubes, tanks, valves, pumps and sluices. You could think of it as a hydraulic computer. Water flows through a series of clear pipes, mimicking the way that money flows through the economy. It lets you see (literally) what would happen if you lower tax rates or increase the money supply or whatever; just open a valve here or pull a lever there and the machine sloshes away, showing in real time how the water levels rise and fall in various tanks representing the growth in personal savings, tax revenue, and so on. This device was state of the art in the 1950s, but it looks hilarious now, with all its plumbing and noisy pumps.

Here is the schematic in Strogatz's post:

 

Strogatz describes what happened on that 1949 day when Phillips demonstrated his machine before skeptical economists at the LSE:

Phillips’s machine worked perfectly that day at the L.S.E., and soon attracted worldwide interest. Copies of the “Moniac,” as it became known in the United States, were built and sold to Harvard, Cambridge, Oxford, Ford Motor Company and the Central Bank of Guatemala, among others. In all, it is thought that only 14 Phillips machines were ever built.

View a video showing the machine in action, explained by Allan McRobie.

Strogatz provides some interesting insight:

Though it’s tempting to view the Phillips machine as a relic of a bygone era, in one way it’s just the opposite; there’s something about it as fresh as the day it began gurgling. Look at its plumbing diagram. It’s a network of dynamic feedback loops. In this sense the Phillips machine foreshadowed one of the most central challenges in science today: the quest to decipher and control the complex, interconnected systems that pervade our lives.

He mentions how we've spent centuries breaking things down to learn about them. Now, the hard part begins:

Now, after three centuries of profound discoveries, the real challenge is to master the process of reassembling the pieces, in ways that faithfully reflect the inevitable interactions among them. Bill Phillips, along with many other pioneers of the 1950s, took the first steps on this difficult road. By rendering the workings of a complex economic system visible in real time, he helped us embark on one of the most momentous scientific journeys humanity will ever take.

No question - Bill Phillips was ahead of his time.

"Let us consider an alternative style of thinking, which we can call 'creative thinking.' It is playfully instructive to note that the word 'reactive' and the word 'creative' are made up of exactly the same letters. The only difference between the two is that you 'C' [see] differently."  -- John Quincy Adams

 

Comments

[MathMan]

http://www.debtdeflation.com/blogs/qed/

watch the video here to see it in action
http://www.debtdeflation.com/blogs/2010/11/15/why-credit-money-fails/

(1st video on the page)

[Mike Collins]

Does anybody know if there's a computer program that models this machine?

If not, could I get enough of the design detail to be able to write one?

[Account Deleted]

Now try to track the molecules. When you give up, you will see one (of 3, 4?) additional steps necessary to UNDERSTAND what's happening. Until then, these descriptive machines are really just good to "show" but not for trying to affect the flow :)

[PAUL F MILLER]

WOW ... what creativity the Bill Phillips device demonstrates ... I stand in awe at the man's understanding of the holistic nature of all things .. again ... WOW ... and thank you ...