Bill Phillips (economist)

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.[1] A mechanical aptitude began to emerge at an early age: at fifteen, Bill learned how a fix a motor vehicle engine, how to wire a shed for electrical lighting, create a crude form of cinematography, and build a transistor radio.[2]

He left New Zealand before finishing school to work in Australia at a variety of jobs, including crocodile hunter and cinema manager.[3] In 1937 Phillips headed to China, but had to escape to Russia when Japan invaded China. He travelled across Russia on the Trans-Siberian Railway and made his way to United Kingdom 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.[4] During the attack, Phillips improvised a machine gun mounting which allowed him to fire at the enemy.[5][6]

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 the then Dutch East Indies (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.[4] Sir Edward 'Weary' Dunlop explained that Phillips’ radio maintained camp morale, and that if discovered, Phillips would have faced torture or even death.[7] Laurens van der Post, who was in captivity with Phillips, described him as "one of the most singularly contained people I knew, quiet, true and without any trace of exhibitionism".[3]

In 1946, he was made a Member of the Order of the British Empire (MBE) for his war service, in particular for his development of a system that allowed Brewster Buffalo fighter planes to fire through through the propeller.[6]

Phillips with his MONIAC computer

After the war Phillips 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 developed an interest in Keynesian theory, so he switched his course to economics and within eleven years was a professor of economics.

While a student at the LSE Phillips used his training as an engineer to develop MONIAC, an analogue computer which used hydraulics to model the workings of the British economy, inspiring the term hydraulic macroeconomics. 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, titled “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861 – 1957”, illustrated by the Phillips curve.[2] 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, with his paper on wage inflation and unemployment becoming the most cited macroeconomics title of the 20th Century.[2] Had he lived longer, Phillips' contributions might have been worthy of a Nobel Prize in economics. He made other contributions to economics related to stabilization policy.

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.)

• Catalogue of the Phillips papers at the Archives Division of the London School of Economics
• BBC Radio 4 programme about Bill Phillips, first broadcast February 2013