I thought it would be appropriate to open up the semester with a gem from my summer reading: the MONIAC Computer. I discovered it in Tim Hartford’s The Undercover Economist. It’s an analog macro-economic simulator developed in the late 1940’s by Bill Phillips, who at the time studied at the London School of Economics. Digital computers, which readily “crunch” numerical simulations for us today, were in their infancy at the time. So, Bill Phillips used a carefully arranged series of tanks and tubes through which moved an actual, physical fluid to simulate the flow of money in the UK economy. The Wikipedia article on the MONIAC provides this example:
At the top of the board was a large tank called the treasury. Water (representing money) flowed from the treasury to other tanks representing the various ways in which a country could spend its money. For example, there were tanks for health and education. To increase spending on health care a tap could be opened to drain water from the treasury to the tank which represented health spending. Water then ran further down the model to other tanks, representing other interactions in the economy. Water could be pumped back to the treasury from some of the tanks to represent taxation.
Bill Phillips was able to calibrate his device to an accuracy of ±2%, which is pretty impressive for an analog simulation. It allowed for observation of interesting phenomena, such as regular cycles and irregular turbulence that occurred during transitions between steady states. According to Tim Hartford, these phenomena were well ahead of economic theory at the time and of genuine scholarly interest (xxii). Go check it out more on Wikipedia! It’s really cool, I promise.
So glad the blog is up and running again. Looking forward to the posts this semester.
If you are interested in a humorous fantasy take on MONIAC (and the gold standard) by the late and great Terry Pratchett I recommend “Making Money”. You might want to start though by reading his first treatise on Economics “Going Postal”.