William Phillips - engineer and economist extraordinaire

Very few scientists/academicians will have as interesting a background as William Phillips. He is the Phillips of the famous or infamous Phillips curve, which illustrates an inverse relation between the rate of unemployment and the rate of inflation. While the Phillips curve may be considered too simplistic, it was a popular macroeconomic tool, possibly because of the work of Samuelson and Solow. In any case, it is Phillips who is the focus of this blog post, not the curve. The best source to learn about William Phillips is a talk by Tim Harford (The Undercover Economist) at the Cato Institute. If you want further details, read on.

Alan Bollard of the Reserve Bank of New Zealand has written beautifully on the life and works of William Phillips. This is an article from the journal "Economica." I hope you have free access to this article. If not, I have a few excerpts from the article here:

Bill Phillips was born in 1914 into a pioneering, hard-working and unusually innovative farming family in Te Rehunga (Arvind: Here is where Te Rehunga is on a map) in the Hawke's Bay region of New Zealand. His father had won a block of land in a ballot at the turn of the century, which by hard labour he converted from rough bush to a productive dairy farm.

Phillips' father was particularly important to him. ...he was an unusual inventor: he built the farmhouse and outbuildings himself. He followed this with a water wheel which was used to generate electricity from a stream. The Phillips farm was the first in the district to have mechanical milking machines.

School was a long bike, train and walking trip away. Despite arriving home late each day, the young Bill Phillips was expected to help with milking and other farm work. Bill soon showed his own technical precocity: building a book rack onto his bike so he could read while cycling, and later rebuilding a neighbour's broken-down truck so that he could (illegally) drive to school

But in 1929, world depression hit the remote hamlet of Te Rehunga. Dairy prices fell by a third....any dreams of a university education were abandoned....But rural New Zealand was not enough. Phillips wanted to sample the world....Here he spent a couple of years travelling the outback, hitching rides on freight trains and working in mining camps. Money came from a range of jobs: picking bananas, working on building sites, mining gold, running a cinema, and even crocodile hunting....He enrolled in a correspondence course in electrical engineering and remembers learning his first differential equations under a harsh Australian sun at an outback mining camp. Arvind: How cool is that!

Bill Phillips then went gallivanting all across the China, Russia, and Eastern Europe and eventually ended up in England just a little before the breakout of WWII. Then, he enlisted with the RAF and was promptly transported back to the far east to protect Singapore from the Japanese. He was captured by the Japanese and, as even a POW, showed uncommon character. Dr. Bollard writes:

He helped to organize language classes teaching Mandarin and Russian. He secretly built electrical immersion heaters to help the troops make cups of tea. He was involved in a dangerous mission to steal parts, and build several clandestine radios.

After the war, he returned to London on a scholarship to pursue a degree in sociology, possibly because he wanted to rationalize WWII. However, he was disenchanted with sociology and got interested in economics because he noticed many similarities between what he had done in electrical engineering and what he was noticing in his economics lectures. Thus began his interest in economics which would lead him to develop hydraulic machines that mimic macroeconomics (sometimes called Hydraulic Keynesianism).

I will write a some more about William Phillips in a few days. In the mean time, you should listen to the first part of Tim Harford's talk at Cato to get a lively account of William Phillips' life, including his economics contributions. He (Harford) is a story-teller par excellence. He does justice to Phillips' colorful life like no written account can.

A little of digging reveals that Dr. Alan Bollard is quite actively involved in a topic I often blog about - free trade. He is the chairperson of APEC (Asia Pacific Economic Cooperation), which is quite actively involved with the TPP partnership. He was a governor of the Reserve Bank of New Zealand (Fed Chairperson's equivalent). In any case, Dr. Bollard is not just an economist. By night, he is also a novelist. In fact, the main character in his novel (The Rough Mechanical: The Man Who Could) is based on William Phillips. I wonder whether Bernanke has also written any potboilers during his tenure!

An addendum to the post: On searching, I came across another good paper giving greater insights into his life. As usual, I hope you have access to this article. I will just quote the last two paragraphs because this seems to be exactly the opinion I have of this man after reading just a little. Remarkable human being.

Until 1994 economists knew only that Phillips had been a POW in Java. Because of Robert Leeson’s alertness and persistence we now know something of Phillips’ activities in captivity.....

The more one learns about Phillips the more astonishing he seems. Barr (2000, p. 112) captured the essence of the man when he wrote that Bill Phillips was, ‘adventurous, tenacious, insatiably curious, shy, and with a lovely sense of humour. He is one of those rare people memories of whom always bring a warm smile to those who knew him’.

The Magnificently Moustached Craig Merrilees

The received wisdom is that free trade is good for all. At least, that is what most economists and policy makers believe. So, if you want to read or hear arguments against free trade as it is practiced now, you would have to scour carefully for sources. I dont watch any of the TV channels - so FOX, MSNBC, etc are useless to me. My sources are usually public talks and congressional hearings on these topics. Once in a while, you encounter the same person in multiple such talks and you realize that this person might have contributed in one way or another to  the debate on free trade. It is important to stress that these people are not necessarily critics of free trade as much as they are of trade policy.

One such person is Craig Merrilees and I got to know of him through his testimonies to the USTR and the House Agriculture Committee (chaired by Rep. De La Garza) during the NAFTA debate. Yes, from 1991. Sadly, when I tried to find if any of the newspapers had written about him or his testimonies, I found nothing, at least in the archives of New York Times. When I did a more extensive search on Factiva, which is owned by Dow Jones, I found few articles. It turns out that Craig Merrilees had been quite active in the environmental and labor movements. I'm not sure what it takes to be a spokesman for different causes, but Mr. Merrilees has been one for various organizations. In fact, before he became a spokesman for organizations interested in trade related issues, he was one for "Veterans Peace Convoy," an organization opposing the invasion of Nicaragua. You can find here an article related to a demonstration by the peace convoy at the White House. Since he was involved with opposing the invasion of Nicaragua, I wonder if Mr. Merrilees was a colleague of Mr. De Blasio, the current mayor of New York City.

A good article on the opposition to NAFTA in, what we would now call the mainstream press, is by Bob Davis ("Fighting NAFTA: Free-Trade Pact Spurs a Diverse Coalition of Grass Roots Foes." Wall Street Journal, December 23, 1992). Since this article is not available online, I post here some excerpts. 

"The anti-free-trade movement began to branch out from its labor-union roots in 1987 when a Minnesota farm activist named Mark Ritchie became fascinated with GATT. The 40-year-old organizer of food co-ops and the early-1980s Nestle infant-formula boycott (based on the Swiss company's pushing formula in the Third World) moved his family to Brussels for six months to study the workings of the intricate trade organization.
 

He hit on a little-known facet of the broad round of trade liberalization being negotiated: Under new GATT rules, foreign governments would have firmer ground for challenging U.S. environmental laws as barriers to trade. Returning home, Mr. Ritchie, a mesmerizing speaker, spread the alarm in meetings with environmentalists and foundations over the next three years. With family-farm groups, already fearful of Reagan administration efforts to slash farm subsidies, he preached that a free-trade pact would further reduce prices for farmers.
 

He hit pay dirt when Barbara Dudley, executive director of the Veatch Program, a Unitarian Church charity that bankrolls environmental causes, heard a talk at an Adirondack Mountain lodge in early 1990 and donated $50,000 to his cause. Mr. Ritchie hired Mr. Merrilees, a veteran environmental organizer, and they launched the Citizen Trade Campaign. "We weren't just talking about tariffs," Ms. Dudley says. "We were talking about threats to environmental, health and safety regulations." 

That is how Mr. Merrilees comes into the picture. In any case, Mr. Merrilees makes pretty powerful case for opposing Fast Track, or the Trade Promotion Authority. This video clip, in particular highlights all the points that opponents of Fast Track are now making. Basically, the reasons have not changed much. Just that the country has changed - its no longer Mexico. You'll see that he comes across as a passionate opponent to Fast Track.

Anyway, Mr. Merrilees is now a communications director for the International Longshore and Warehouse Union (ILWU). If you see the video clip, you'll see why the title of this post is right. He looks like a left-leaning version of John Stossel!

An update to this post: Bob Davis, whose article I referenced above still writes for WSJ. He mostly writes on business/economics in China. He is also the co-author with David Wessel of a book titled "Prosperity: The Coming Twenty-Year Boom and What It Means to You." Written in the throes of the tech boom, it would be an understatement to say that Bob and David did not foresee the future. I've not seen any interviews of Bob Davis but David Wessel, whenever he has to talk about this book, admits gracefully that he was way off target.