In November 1958, Economica carried an article by AWH (Bill) Phillips: "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1862-1957". Phillips, then LSE Economics Professor, had already made path-breaking contributions in the fields of stabilisation policy and economic modelling. He regarded his 1958 article (a "wet weekend's bit of work") as of only passing interest. Nevertheless, the 1958 article led to a re-shaping of macroeconomic policy for decades to come.
Bill Phillips was born in 1914 on a farm in Dannevirke, New Zealand, 200 kilometres from Wellington. His father experimented with technology, and built a small hydro-electric plant on a stream running through his property. Phillips had an adventurous youth, travelling through Australia (where he ran an outback movie theatre). Unusually for the time, he also travelled through South East Asia.
He trained as an electrician. However, his civilian life was interrupted by the Second World War. He was captured and held as a Japanese prisoner of war. Unlike many of his cohort, he survived; his character appears in the book Night of the New Moon (on which the film Merry Christmas Mr Lawrence, starring David Bowie, was based).
Arriving in London after the war, Phillips decided to study economics, and attended classes at the London School of Economics (LSE). Despite a rather undistinguished under-graduate career, he was invited to study for a post-graduate degree. Phillips was fascinated with the interactions of sectors across the economy. Using his engineering knowledge, he built a hydraulic model of the economy. His machine, the MONIAC, consisted of flows of water from one container to another, representing monetary flows - e.g. from consumption to income and thence, via an accelerator mechanism, to investment. "Leakages" to imports were included, and multiple models were built to represent multiple countries - interlinked by pipes. In practice, the models also suffered real leakages and demonstrations could be a damp affair!
James Meade, LSE Nobel prize-winner, was a keen collaborator with Phillips in this enterprise. Punch magazine even ran a special cartoon on the ingenious inventions. Today, only a few of the hydraulic models survive. LSE Model #1 is housed at the New Zealand Institute of Economic Research in Wellington; Model #2 is housed at the South Kensington Science Museum.
Phillips left London after the 1968 student riots and returned to Australasia, holding posts first at Australian National University and then at University of Auckland. He became one of the first western economists to turn his attention to Chinese developments; he presciently anticipated the rise of the Chinese economy despite its then parlous state.
Phillips' health, always weak following his prison camp days, was not helped by his heavy smoking. He died in 1975, aged just 61. However his legacy in many fields lives on.