Dr Bill Phillips is not a household name, even if he was the pre-eminent New Zealand economist of the twentieth century. A self-effacing, if not enigmatic man, he obviously left an impression on Alan Bollard, a young post-graduate student at Auckland University in the 1970s, that led to a biography some 40 years later. What should we now think of the almost forgotten economist, remembered only in name for a contentious macroeconomic conundrum, who spent most of his life overseas?
Alan Bollard’s book is a game of two halves, with the first part describing the young Bill Phillips’ ‘search for adventure’, and the latter part being his post-war experience as an academic economist. Not surprisingly, the first half is more interesting to read. Bollard writes of his Phillips’ family background in the remote Te Rehunga district, in the Tararua area, which is no longer on the map (in fact a historical map of the area would have been useful). Although the farm was in the southern part of the Ninety-Mile bush region, and the nearby Scandanavian settlement, Bollard sticks to the familial rather than regional history.
Bill Phillips grows up in troubling economic times, gets an electrical apprenticeship, and heads to the remote Taui camp near Waikaremoana. A restless young man, he is soon off on a great O.E., first across the Tasman, and then into combat zones in Asia that would leave a lasting impression. There are obvious comparisons with another New Zealander travelling across the Soviet Union, – Bill Sutch, – but Bollard is either unaware of that contemporary tale or chooses not to tell.make that link.
Phillips ended up in London in the late 1930s, and with the outbreak of war he is back to Asia with the RAF, and eventual imprisonment for three years. Despite surviving this ordeal, his health is never the same, and he picks up a heavy tobacco addiction on the way. He uses his rehabilitation money to enrol for a sociology degree in the London School of Economics, which he struggles with until he finds his true calling, and somehow manages to get a PhD in economics in four years, inventing the famous MONIAC machine along the way (right) which provided an archetypal model of the macro-economy. This is all quite a compelling story, and is written sympathetically by Bollard, though rather too briefly. Dr Bollard has to provide a lot of contextual information about the economic and cultural events of the time. He then tends to speculate about whether Phillips would have attended certain events. The tentative links made between Phillips and other New Zealanders in London can also be misleading. On page 202 he suggests that Phillips worked on a modelling problem with the help of a Peter Whittle, but by the end of the paragraph it seems uncertain that they ever met. It is actually Phillips’ association with his contemporary academic economists that really counts, and the big names in the pantheon of the profession.
Even for those of us who have read a bit of economic theory the latter part of the book is a difficult one. Once Bollard starts to write about the ‘Phillips Curve’ it begins to read like an academic article and this isn’t helped by the use of the APA referencing system, when there are endnotes as well. Bollard suggests that Phillips’s work on a statistical relationship between unemployment and inflation is of fundamental importance, even though it was quite amateurish at the time. Phillips certainly preferred an inductive method, as opposed to the deductive approach favoured by other theoreticians, which can also be seen as ideological. Bollard has extrapolated the influence of Phillips’ work for the kind of inflation targeting that he was involved in as governor of the Reserve Bank (page 138). This seems a bit of a stretch, and for someone who studied stabilisation in the economy it seems odd to foreground a technical aspect, when the essentially ‘Keynesian’ policy approach became passé. Of course, Bill Phillips missed the destabilising effects of the new monetary policy, when the workers’ expectations workers had of inflation had replaced expectations of keeping a job.
As a whole the Phillips biography still seems to lack a sense of the man, and would have benefitted from a comparison to other New Zealand-based economists who are better known here. It’s as if the respect of the fellow Dons is more important, and there is but a glimpse in some of the long quotations. The key one is on page 105, when Professor Robbins is interrupted by a “wild man from New Zealand waving blueprints in one hand and queer shaped pieces of Perspex in the other.” This certainly describes Phillips as an enthusiastic amateur with original ideas, and it is in fact the MONIAC machine that is his legacy. Phillips and his machine can be seen on the cover of the book, in a rather dark and unappealing reproduction. The obvious late decision to change the cover (the alternative appears in the review page of North & South) and the sub-title reflects an almost too retiring subject for a book project. The magnificent machine, however, is held in the Reserve Bank museum for all to see.
Reviewed by Simon Boyce. Boyce is currently completing a PhD thesis on the topic of tax havens. He has previously worked within central government in the area of Finance and Economics.
A Few Hares to Chase: The Life and Economics of Bill Phillips
by Alan Bollard
Published by Auckland University Press