Modeling Economics Using Water


Engineer/economist Bill Phillips, a New Zealand native, built a machine to model the British economy in 1949. Although it was high-tech for its time, today the Phillips Machine seems a little...nutty. What's odd about the machine is that it used water power -- hydraulics -- to model the flow of money through the British economy. Here are some snippets from yesterday's Guardian article about the machine (emphasis added):

The prototype was an odd assortment of tanks, pipes, sluices and valves, with water pumped around the machine by a motor cannibalised from the windscreen wiper of a Lancaster bomber. Bits of filed-down Perspex and fishing line were used to channel the coloured dyes that mimicked the flow of income round the economy into consumer spending, taxes, investment and exports. Phillips and Walter Newlyn, who helped piece the machine together at the end of the 1940s, experimented with treacle and methylated spirits before deciding that coloured water was the best way of displaying the way money circulates around the economy.

Read the rest for some great tidbits about Phillips, including his engineering exploits as a P.O.W. The article also includes an anecdote explaining how, if monetary and fiscal policy were out of whack, water literally overflowed from the machine onto the floor. Way to make a (literal) mess of economic policy, guys.

The Phillips Machine is also known as the MONIAC. You can read more about it at Wikipedia. (See also: Bill Phillips.)