A Few Hares to Chase: The Life and Economics of Bill Phillips
Auckland University Press, $40.00
The sages have long counselled that you should never meet your heroes. Should that be extended to writing about them? Alan Bollard has indulged his hero worship in this hagiography of the largely unknown, outside of economic circles, Bill Phillips. “You don’t meet geniuses many times in your life,” Bollard said in a recent RNZ National interview.
Born in the backblocks near Dannevirke to inventive and dedicated parents, he went from being an electrician at a power station near the Ureweras in 1935 to being a professor of economics at the London School of Economics (LSE) a little over 20 years later. In between, he travelled through outback Australia, a China torn by civil strife and Japanese invasion, a Soviet Union suspicious of Westerners, and a Europe witnessing and feeling the rise of Nazism, before landing in London. And there the story might have ended as that of another adventurous, slightly eccentric Kiwi, who went on to have war adventures and privations, in which he displayed courage and ingenuity, and earned a footnote in the memoirs of an international celebrity – Laurens van der Post.
It’s the post-war journey that earns Phillips a still largely overlooked spot in history. Because that’s when Phillips moves from electrical engineering to sociology at no less an institution than the LSE, and scrapes through with an indifferent performance before jumping to a completely alien subject, economics. Even then it comes down to applying an engineering solution to economic riddles – a water-driven machine of pipes, pumps and tanks to simulate economic relationships.
The unorthodox Monetary National Income Automatic Computer (Moniac) replicated the British economy, and demonstrated the Keynesian economic model with various tanks made of perspex, representing savings and investments, surplus-balances, pipes to shift investment flows, and to show the effect of imports, taxes, investment and the like. It leaked, was probably an electrical death trap, but the chain-smoking Phillips astounded the British economic establishment when he nervously demonstrated it in late 1949. The resulting paper and further refined machines cemented Phillips’s future as an economist. Within a decade he was a professor.
The story of the building of the Moniac (an early model of which is in the Reserve Bank of New Zealand’s museum in Wellington) from surplus WWII warplanes in a garage in a London suburb is engaging, as is the unorthodox manner of selling the idea to the LSE’s economics department leaders and getting funds to build it. The myth of an eccentric can-do Kiwi surmounting the odds with a piece of number 8 wire gets another polishing.
Bollard said he wrote the book for the intelligent, well-informed man and woman in the street. It’s at this point that they make the judgement as a reader either to plough on into the intricacies of economic plumbing, the celebrated eponymous “Curve”, and into the nether world of econometrics and the search for economic stabilisation, or to skim through to the denouement.
To take the former course sets a reader off on hare spotting and chasing. The latter course is less complicated and perhaps only slightly less illuminating and satisfying. For those who forego the chase, the highlights include a foray into the relationship between inflation and unemployment from which the renowned Phillips Curve emerges.
It proposed an inverse relationship between inflation and employment, and it’s what Phillips is enduringly remembered for, even if he called it a “wet weekend’s work” which he never regarded as his best work, nor all his own. It was largely superseded even in Phillips’s own academic lifetime, although it was also copping some of the blame for the economic turmoil that hit western economies in the 1970s. And it lives in a form in the United States Federal Reserve’s monetary policy, which includes a specific employment condition.
Phillips’s legacy, according to Bollard, is the work on economic stabilisation of the late 1950s, much of which still permeates the policy approach of economists and central banks to this day. This is also some of the more challenging content for those with less than a passing interest in economics. Almost as an anti-climax, Phillips quietly disappeared to Australia to work in Canberra and pursue the study of the Chinese economy.
The Economist magazine’s Tim Harford has dubbed Phillips the Indiana Jones of economics, and has enthusiastically and colourfully spoken about him. And shorter articles have sung Phillips’s praises.
Phillips was shy, retiring, self-effacing, a poor record keeper, whose main personality trait was an ability to fly under the radar. You could never imagine him saying – Hillary-like – “we knocked the bastard off” for any of his accomplishments. Which is all the more reason I’d have hoped this book would have burrowed deeper into who he was. The personal anecdotes are thin and often vague, and sometimes read like hand-me-down family folklore. The professional observations and comments, while revealing in the context of economics and academia, offer only some insight into the person.
One grating stylistic device is that of supposing, presuming, imagining what Phillips felt, saw, thought, might have done. Biographers invariably resort to guesswork to get readers to jump to the conclusions needed for the narrative, but it would have been preferable if it had been used less. The illustrations are scant, and a battle between the Russians and Japanese in 1939 is shown in all sources I checked as Nomonhan/Khalkhin Gol and not Nominatan as stated. Bollard has done as much justice to his hero as might be possible, even if a little dourly. I fear he’s the only one likely to make the effort.
Gyles Beckford is RNZ business editor.