Tuesday, January 8, 2013

Origin of the Design for a Machine to Influence the Working of the Economic System

The patient is Miss Natalija A., thirty-one years old, formerly a student of philosophy. She has been completely deaf for a great number of years, due to an ulcer of the ear, and can make herself understood only by means of writing. She declares that for six and a half years she has been under the influence of an electrical machine made in Berlin, though this machine’s use is prohibited by the police. The odd-looking machine, seven feet high and five feet wide, is an ingenious hydraulic device that teaches economic principles in a few easy and graphic operations.

It was invented by a New Zealand electrical engineer named W. A. Phillips and dubbed the “Moniac” by its initial U.S. enthusiast, economist A. P. Lerner of Chicago’s Roosevelt College (“to suggest money, the ENIAC, and something maniacal”). It has the form of a human body, indeed, the patient’s own form, though not in all details. Once started, the Moniac draws dollars (colored water, see diagram) from the bottom tank marked “active balances,” which represents the total stock of currency and bank credit in the economy at any given period of time. As income, these dollars are pumped to the top, where they are distributed in different quantities (by valves controlled by the “functions”) among taxes, consumer expenditure, and savings. How many of these course through the economy (the main channel in the center) depends upon the volume of government expenditure, the translation of savings into investment, and the propensity of consumers to spend.

She is certain that for men there is a masculine machine representing the masculine form and for women a female one. The trunk (torso) has the shape of a lid, resembling the lid of a coffin and is lined with silk or velvet. In essence a simple analogue, the Moniac traces the circular flow of dollars through the economy. These flows are controlled by nine adjustable sluices or “functions”, each of which regulates a set of effects—of national income on tax revenues, government spending on consumption, domestic spending on imports or exports, the rate of interest on savings or investment, the rate of exchange on exports and imports. Regarding the limbs two significant explanations are given. At the first interview she described them as entirely natural parts of the body. A few weeks later these limbs were not placed on the coffin lid in their natural form, but were merely drawn on it in two dimensions, in the position they would occupy in the natural state of the body.

Some of the dollars drain off to pay for imports; others return in payment for exports. The total flow returns to the working balances at the bottom tank where a feed-back apparatus pumps the circulating dollars up again. She cannot see the head-she says that she is not sure about it and she does not know whether the machine bears her own head. She has practically nothing to report about the head. The patient does not know definitely how this machine is to be handled, neither does she know how it is connected with her; but she vaguely thinks that it is by means of telepathy.

The outstanding fact about the machine is that it is being manipulated by someone in a certain manner, and everything that occurs to it happens also to her. When someone strikes this machine, she feels the blow in the corresponding part of her own body. The ulcer now present on her nose was first produced on the nose of the machine, and some time later the patient herself became afflicted with it.

The inner parts of the machine consist of electric batteries, which are supposed to represent the internal organs of the human body. As the levels change in the various tanks, floats activate the controls through attached strings, opening and closing sluices, moving the “functions,” guiding the scribes on the charts. The left scribe records at the rate of two minutes a year the resulting gross national product; moving scribes at the top right can show the effects on the rate of interest and on imports and exports. Those who handle the machine produce a slimy substance in her nose, disgusting smells, dreams, thoughts, feelings, and disturb her while she is thinking, reading or writing.

These “functions” are arbitrary in that they represent government, business, or consumer behavior and must be fed into the machine as assumptions. Once these “functions” are set, the Moniac can quickly demonstrate —and chart on calibrated scales—how changes in any number of economic relationships simultaneously affect all others. At an earlier stage, sexual sensations were produced in her through manipulation of the genitalia of the machine; but now the machine no longer possesses any genitalia, though why or how they disappeared she cannot tell. Ever since the machine lost its genitalia, the patient has ceased to experience sexual sensations.

(The above "essay" is a montage composed entirely of passages from Victor Tausk's 1919 essay, "Origin of the 'Influencing Machine' in Schizophrenia" and a March 1952 feature in Fortune magazine on The Moniac, William Phillips's hydraulic analog computer model of a national economy.) See also Christopher Turner on The Influencing Machine and the website about James Tilly Matthews's Air Loom.)

Sunday, January 6, 2013

The Decline and Fall of Technological Unemployment

The concept of "technological unemployment" appears to have peaked in 1936, after which it has been on a steady decline. Meanwhile "Luddites" -- which I take to indicate mainly disparaging mentions of Luddites has been on the rise, slowly and unsteadily throughout the 20th century and into the first decade of the 21st.

I'm working on a long post but in the meanwhile here's a thought: maybe technology "creates more jobs than it destroys" because it isn't really "labor-saving" in the first place. That is to say, machines aren't intrinsically productive but simply mask the uneven exchanges that occur between the industrialized global North and the extractive South.

It would admittedly be difficult to prove such a hypothesis but my question is: what evidence is there for the commonly-assumed believe that machines are "intrinsically productive"? I know, I know, there doesn't need to be any evidence for the assumption because it is "self evident" to the extent that anyone who questions that self-evidence reveals themselves to be a fool, a crank, a crackpot, a Luddite and an enemy of progress.