Hydraulic Keynesianism

A friend has alerted me to this post on the famous Phillips machine, which several of us learned about in Antoin Murphy’s class years ago. The accompanying video is magnificent. Although Phillips was a New Zealander, I can’t help but be reminded of George Orwell’s comments on the English love of hobbies, in this wonderful essay.

9 replies on “Hydraulic Keynesianism”

In Leddin & Walsh (The Macroeconomy of the Eurozone – Gill & Macmillam 2003) we included a photograph showing Phillips contemplating his machine (while smoking a cigarette!) and another of James Meade lecturing at LSE using two Phillips machines to represent two different economies.

If anyone is ever killing time in London, the Science Museum has a Phillips machine on display. Though, as the article points out, it no longer works.

There’s a special issue of Nonlinear Dynamics, Psychology and Life Sciences (http://www.societyforchaostheory.org/ndpls/) coming out celebrating the Phillips machines and their history, in particular their connections with a branch of analogue, nonlinear macrodynamic modeling associated with Dr Richard Goodwin of Cambridge and Siena.

In studying an example of Leontief’s famous claim that ‘capitalism is an example of a dynamical system that is unstable everywhere’ (apparently Leontief made this claim during a discussion of Richard Goodwin’s paper, in Driebergen, in 1951, during the First Input-Output conference organised by Tinbergen – Goodwin had just discovered, with Goran Ohlin’s help, the Frobenius generalization of the Perron theorem, and was trying to impose the ‘stability dogma’ on a linear multisectoral model). Goodwin, together with Phillips, had coupled two Phillips National Income machines to investigate nonlinearly coupled national economies. Goodwin was also the custodian of the MONIAC at Cambridge.

I can happily report that as a recent graduate of Prof. Murphy’s class, the Phillips machine is still being discussed!

@ Matt, they were built as closed systems, so they weren’t supposed to run out of water! But, there were loads of problems with ‘leakages’ with these machines, they required a lot of maintenance and they broke down all the time, maybe they were more realistic descriptions of the economy than we give them credit for!

@Matt: “What happens when it runs out of water?”

The Central Tank supplies increased liquidity.


Does anybody have the equations and diagrams for one of these machines? It should be handy enough to run up a flash animation that would allow budding economists to try their hand at running a country without having to get their feet wet.

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