The rather eccentric New Zealand economist William Phillips made a hydraulic computer in 1949 out of, among other things, old bits of WW2 Lancaster bombers. The contraption—more formerly called the Monetary National Income Analogue Computer (MONIAC)—was built to mimic the British economy. If you ever find yourself in London’s Science Museum (or to be exact the museum’s history of computing gallery), you can see one of these machines (here):
Coloured water represents money and this flows around the hydraulic computer, just as money does within an economy. Moreover, by adjusting various valves, levers, taps and pumps, you can see what happens when various changes are made to tax, government spending, investment, savings and so on. At a time when electronic computers were still at an embryonic stage of development, the MONIAC was at the cutting edge for conducting “what if” experiments with the economy. A 1950s student could ask his or her teacher: “what happens to the economy if we turn this dial all the way to the left?”
But, of course, nowadays we don’t need simulations. Take Cyprus. In this country’s case, we are performing a real time, live experiment. We are taking the Cypriot economy and saying “Let’s see what happens when we turn this dial all the way to the left and cut off credit completely?” Continue reading
Risk and Well-Being 