For the stats econ guy: Like Water for Money

Subject: For the stats econ guy: Like Water for Money Wed Jun 03, 2009 1:38 am

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.

For the stats econ guy: Like Water for Money Strogatzdetailed950cw74

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.

When it debuted back in November 1949, the leading thinkers at the London School of Economics crammed into the seminar room, some having come just to laugh, others gaping in amazement at the thing in the middle of the room, which had been cobbled together in a garage, with a pump cannibalized from an old Lancaster bomber.

And what were they to make of its inventor, an unknown named Bill Phillips, with his thick New Zealand drawl, pacing back and forth, chain smoking in front of the luminaries? (Phillips had acquired a severe nicotine addiction as a prisoner of war in a Japanese camp, where he had displayed both heroism and a genius for practical engineering — he risked his life by fashioning a tiny makeshift radio from bits he had pilfered from the camp commander’s office, and built an immersion heater capable of providing 2000 starving fellow P.O.W.s with a cup of tea each night before bed.)

More: http://judson.blogs.nytimes.com/2009/06/02/guest-column-like-water-for-money/?src=sch

:l-a-u-g-h:

We're all doomed!

For the stats econ guy: Like Water for Money

For the stats econ guy: Like Water for Money

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