Alban William Housego "A. W." "Bill" Phillips
(18 November 1914 – 4 March 1975) was an influential New Zealand economist
who spent most of his academic career at the London School of Economics
(LSE). His best-known contribution to economics
is the Phillips curve
, which he first described in 1958. He also designed and built the MONIAC
hydraulic economics computer in 1949.
Phillips was born at Te Rehunga, near Dannevirke
, New Zealand, to Harold Housego Phillips, a dairy farmer, and his wife, Edith Webber, a schoolteacher and postmistress. He left New Zealand before finishing school to work in Australia
at a variety of jobs, including crocodile
hunter and cinema manager. In 1937 Phillips headed to China
, but had to escape to Russia
invaded China. He traveled across Russia on the Trans-Siberian Railway
and made his way to Britain
in 1938, where he studied electrical engineering
. At the outbreak of World War II
, Phillips joined the Royal Air Force
and was sent to Singapore
. When Singapore fell, he escaped on the troopship Empire State
, which came under attack before safely arriving in Java
. When Java, too, was overrun Phillips was captured by the Japanese, and spent three and a half years interned in a prisoner of war
camp in Indonesia
. During this period he learned Chinese
from other prisoners, repaired and miniaturised a secret radio, and fashioned a secret water boiler for tea which he hooked into the camp lighting system. In 1946 he was made a Member of the Order of the British Empire
(MBE) for his war service. After the war he moved to London
and began studying sociology
at the London School of Economics, because of his fascination with prisoners of war's ability to organize themselves. But he became bored with sociology and interested in Keynesian theory
, so he switched his course to economics and within nine years was a professor of economics.
While Phillips was a student at the LSE he developed an analogue computer
which used hydraulics
to model the workings of the British
economy. It was called the Monetary National Income Automatic Computer or MONIAC
, which was probably a backronym
reminiscent of the American ENIAC
computer. The flow of water through its tanks and pipes accurately simulated the flow of money through the economy. The MONIAC Computer’s ability to model the subtle interaction of economic parameters, such as tax rates and investment rates, made it a powerful tool for its time. Phillips first demonstrated MONIAC to a number of leading economists at the LSE in 1949. It was very well received and Phillips was soon offered a teaching position at the LSE. He advanced from assistant lecturer in 1951 to professor in 1958.
His work focused on British data and observed that in years when the unemployment rate was high, wages tended to be stable, or possibly fall. Conversely, when unemployment was low, wages rose rapidly. This sort of pattern had been noticed earlier by Irving Fisher, but in 1958 Phillips published his own work on the relationship between inflation and unemployment, illustrated by the Phillips curve. Soon after the publication of Phillips' paper, the idea that there was a trade-off between a strong economy and low inflation caught the imagination of academic economists and policy-makers alike. Paul Samuelson and Robert Solow wrote an influential article describing the possibilities suggested by the Phillips curve in the context of the United States. What people think of as the Phillips curve has changed substantially over time, but remains an important feature of macroeconomic analysis of economic fluctuations. Had he lived longer, Phillips' contributions may have been worthy of a Nobel Prize in economics.
Phillips made several other notable contributions to economics, particularly relating to stabilization policy. This approach to economics reflects his earlier training as an engineer, something that was evident in his construction of a physical model of an economy complete with pipes and water flowing around to represent the flow of transactions between different sectors.
He returned to Australia in 1967 for a position at Australian National University which allowed him to devote half his time to Chinese studies. In 1969 the effects of his war deprivations and smoking caught up with him. He had a stroke, prompting an early retirement and return to Auckland, New Zealand, where he taught at the University of Auckland. He died in Auckland on 4 March 1975.
- Mike Hally, Electronic Brains: Stories from the Dawn of the Computer Age, Joseph Henry Press, 2005, ISBN 0-309-09630-8
- David Laidler, " Phillips in Retrospect". (A review essay on A. W. H. Phillips: Collected Works in Contemporary Perspective, edited by Robert Leeson, Cambridge, U.K., Cambridge University Press, 2000.)