bill phillips

Every economist knows the Phillips Curve.

It’s this fundamental relationship in the economy. This surprisingly strong connection between inflation and employment. Prices go up, there are more jobs. Rein back inflation, and more people are out work. It’s hotly debated what this all means.

The author of the Phillips Curve, Bill Phillips, is almost unknown in his home country. But he has a crazy story.

Bill Phillips was a crocodile hunter in Australia. He was an Air Ministry engineer in Singapore in World War II. For three-and-a-half years he was a prisoner of war, calmly building secret radios. And that was before he even saw a supply and demand graph.

Bill Phillips brought new insights that helped change the direction of the whole discipline of economics in the 1950s. He was one of a few pioneering academics who brought in engineering equations to answer questions like: can governments control unemployment? Why do the price of groceries keep going up?

To understand Bill and how he changed economics, you can look through his history, right to his childhood in rural New Zealand.

Childhood in Te Rehunga

A waterwheel lights up the farm house. Unlike most New Zealand farmers in the 1910s, the Phillips family is electrified.

Bill, Reg, and his sisters Carol and Olive grow up playing cartoons on a device called a Zoetrope. They make a crystal radio set. They watch a magic lantern playing moving images from America and Britain. Their kitchen doubles as a dark room. They read books late into the night, until they hear the squeak of their father pulling a winch. The waterwheel stops. Everything goes black.

Bill Phillips helps milk the cows. Then violin practice. Deer hunting. Homework. BB guns.

In hindsight, this is practice for what’s to come.

As he cycles over dirt roads for hours to get to Dannevirke High School he knows that’s time wasted. So he fits a bookstand to his bicycle handlebars.

That’s not entirely satisfactory. So, with the persistent ingenuity that will come to define him, he fixes up an old truck, which he drives to school without a drivers license.

Bill graduates high school early, in the top of the class. But the price of butter suddenly halves. What does this mean for Bill? Well it’s 1929. The waves of the Great Depression are breaking all over the world. His parents tell him the news. They can’t afford to pay for him to go to university.

So Bill moves out of home to work at Tuai Powerstation, a new hydro dam.

After that, Australia. He shoots crocodiles, fixes motors, and studies engineering.

He learns his first differential equation while lying under the shade of a transformer in a gold mine.

He decides to catch a Japanese ship to Shanghai. But after a day on board, Japan declares war on China. So he’s diverted to Yokohama.

When Bill’s in Japan he takes photos of some troops. The police take him in for questioning. He’s lucky. They just confiscate the photos and let him go. But all through Korea and Manchuria he’s now stopped at every checkpoint, and taken in to a special supervised hotel for night.

He takes takes the train from China to Russia to London. And along the way he’s asking for jobs in the Soviet mines. (He thought it would be interesting to work in a planned economy.)

This starts to sound made up. But it gets crazier.

World War II

World War II starts. Bill signs up for the Air Ministry. He’s taken to Singapore where his job is to add machine guns to these clunky old fighter planes called Buffalos. He times the machine guns to shoot perfectly in between the airplane rotors.

In 1942 the Japanese take over Singapore. And as Bill is making an escape on a boat, the ship is bombed. He finds a huge machine gun, but it only shoots sideways, not up to the sky. So with explosions and gunfire around him, he calmly builds a new mounting, and fires back up at the bombers for three-and-a-half hours.

It’s a thin escape.

Bill is in Java now as the Japanese are descending down South East Asia. He sets up a small camp on a hill overlooking the south coast, facing Australia. He and two others try to find a boat to sail across the Indian ocean. They even try to repurpose an old bus into a makeshift raft.

One day Bill and his colleague are walking back up the green scrubby hillside. They see their colleague keeping watch. There are two Japanese soldiers either side of him. Bill turns and runs, and jumps off a sea cliff. He described this like a Walt Disney character running over thin air before falling.

Bill’s sister Carol said, “Later we would realise it was not really funny, but an absolutely petrifying experience.”

We can only imagine how many times Bill would replay this scene in his head. Walking through the palm trees and banana plants. Vines and saplings crunching beneath. Slogging up the slope. The Japanese soldiers. The cliffside.

The Prisoner of War camp in Bandoeng is brutal. Here, morale is almost as important as food rations. They have no idea what’s ahead. Will the allies win the war? If they do win, when? And they do, are the Japanese going to simply massacre the prisoners and burn down the camp?

So over three years of captivity in worse and worse conditions, Bill puts his childhood love of crystal radios to use. He makes secret receivers to keep up with progress on the war outside. He knows he could get killed if the radio sets are discovered by the Japanese guards. He makes one under the kitchen floor, one in a chair, one in a pair of wooden clogs.

Eventually over the years the radios fail as the valves blow. He needs a new acorn valve. So in the night he watches guard while another prisoner breaks into a Japanese lieutenant’s office to steal some parts for their radio.

Under a mosquito net over three nights he repairs the radio in the clog. He presses it to his ear, and — that night — he is the first in the camp to hear of the atomic bomb exploding in Hiroshima.

“It worked, Colonel, it worked!” Bill whispers in the dark.

As the war ends, Bill Phillips returns to the family farm in New Zealand. His sister Carol says he is “woefully thin.”

He makes a joke about the camp.

“She wasn’t so bad once you got used to her. And I got to work on my Chinese.”