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Since its advent in the 1970s, the personal computer has dramatically enhanced society’s collective ability to understand the natural and man-made systems of our world. The ability to capture and share information has been a key driver for progress. With the recent development of cloud computing over the past 10 years, the ability to conduct data-heavy research of complex systems is becoming accessible to everyone. This is good timing. We currently face a confluence of complex problems that need to be understood in a very precise way and in close to real time. Society has a lot to think about including, but not limited to, an epidemic of national debts, the uncertainty of climate change, the deterioration of infrastructure systems, public health risks, and major gaps in the workforce. As if all those things weren’t enough to understand, we also need to understand how to allocate money efficiently to adequately address all of those issues. Furthermore, we need to be able to determine if we even have enough money to adequately address those issues. We need a new MONIAC.

Karl Duncker’s Candle Puzzle

There is a cognitive test commonly called the Candle Puzzle. The test was originally conducted by Gestalt psychologist Karl Duncker. The goal of the Candle Puzzle is to affix a candle to a wall without allowing the candle to drip wax on the floor using only a candle, a box of thumbtacks and a book of matches. Participants are more likely to solve the puzzle when the visual conditions of the problem allow them to get past their mental blocks against using the objects in an unfamiliar way. For example, the problem gets easier to solve simply by changing it from a mental puzzle to a physical puzzle where participants can physically interact with and see the objects. Visual conditions can also be changed to improve the likelihood of participants finding the optimal solution (pictured below) by presenting the tacks outside of rather than inside the box.

Karl Duncker’s Candle Problem

A good model can both help us find an optimal solution and can change our perspective on how we solve a problem. It can literally get us thinking outside the box. Economic visualizations are not new. There are many ways that economists have conceptualized the economy and attempted to capture it in a drawing or system map. Bill Phillips created a physical model.

A mid-century model maker: Bill Phillips

In 1949 New Zealand economist Bill Phillips took a mental model of the workings of the economy and made it into a physical representation. Phillips wins the prize for most interesting economist, mostly because of the life path that led him to become an economist. His job titles in his early life included crocodile hunter and cinema manager. In his 20s, he studied electrical engineering before joining the Royal Air Force. He was captured by the Japanese in World War II, and imprisoned for over three years. After the war, he found his way to London School of Economics, where he spent the next decade studying and teaching. It was during that decade that he developed and built the MONIAC.

Bill Phillips and the MONIAC

The MONIAC is a rough form of what this article seeks to inspire. MONIAC stands for Monetary National Income Analog Computer. The machine was used to demonstrate and predict the flow of money through an economy at a very high level. The MONIAC is a hydro-mechanical computer built out of plastic and wood. Water flows through the tanks at specified rates as set by Phillips to represent investment and tax rates. The resulting output is the national income. Phillips was able to calibrate this machine to predict national income accurately. The original intent was to use this as a teaching aid, but it also turned into a powerful economic simulator. Imagine if we could optimize our economy by mapping the flow of money and adjusting the levers accordingly.

A new MONIAC

We need a new MONIAC. Obviously, we are capable of building a more sophisticated computer today than Bill Phillips was able to build in the 1940’s and 1950’s. And, the field of design has advanced as much as the field of super computing. We need to be able to visualize our economy with a great deal of precision. If we are able to do this, then we can more thoroughly research and develop long-term funding solutions to the following:

· Infrastructure Systems: As major infrastructure systems deteriorate, we need to understand the aggregate effect on state budgets. Can state budgets endure system infrastructure failures? Developing a more thorough understanding of life-cycle costs of infrastructure is absolutely necessary. How can life-cycle costs be integrated into budgeting decisions and monetary policy, so that debt and deterioration are avoided?

· Climate Change: To mitigate or to adapt (or both)? That is the question. How much money would it take to zero our carbon footprint? How much can we afford, and how can we close the gap? Would Michael Metcalfe’s suggested money supply increase be able to pay for problem sets associated with climate change?

· School Funding: School funding in the United States is largely tied to the health of the housing market. After the 2008 recession, school systems have been trying to break the vicious cycle associated with insufficient tax revenue and underfunded schools. School funding is always in a virtuous or vicious cycle, depending on the current trajectory of the local economy. When property values go down, so do property tax revenues. When tax revenue goes down, school funding is reduced. How can we break the cycle and diversify school funding sources?

· Ebola, Zika, and Future Public Health Concerns: How much money does it take to fight the black plague? According to Bill Gates and others, we got lucky when the Ebola outbreak was able to be contained. How would we react to a more contagious virus or the like? The ability to address public health emergencies quickly doesn’t seem like a public finance problem, but it is. Not only do we need to be able to facilitate the response to outbreaks, we also need to do significant research and development to anticipate future public health risks. How much money do we need to address public health risks?

· Recession-proofing the Economy: As Yogi Berra put it, “The future ain’t what it used to be.” It is conceivable that we could design an economy that is recession proof. Even just considering how we might recession-proof the economy is a useful exercise that would be made more effective by a new MONIAC.

· Universal Basic Income: This is a form of social security where every citizen would receive a guaranteed income, regardless of employment status. Leaders in the tech industry, including Elon Musk and Sam Altman think basic income will eventually become necessary. And, there is one 2020 U.S. Presidential candidate, Andrew Yang, proposing we implement a UBI program in the United States. A new MONIAC could simulate the impact of Universal Basic Income.

· Emergency Preparedness: We can’t predict how many natural disasters we will have from year to year, but we can predict with some level of certainty the funding necessary to respond to an annual set of natural disasters. The Coast Guard’s motto is Semper Paratus, which means ‘Always Ready’. It would be prudent to adopt this mentality to our thinking on economics. Doing this will allow us to sustain healthy local economies even after devastating natural disasters.

· Demonetization and other Monetary Transitions: In November 2016, India went through a very quick and massive monetary transition when the government effectively made over 85% of the cash in circulation worthless. The purpose of this sudden shift was to reduce or eliminate black market activities. The transition has had major negative impacts on India’s economy. We need to create a portfolio of monetary transition methods that reduce negative shocks to the economy. A new MONIAC could simulate monetary transitions.

Society is currently facing a convergence of problem sets that necessitates a new set of inventions and innovations related to monetary economics and public finance. The creation of a new modern MONIAC would enable a new body of research that hasn’t yet been explored. We need to rethink the way we are visualizing the economy so that we can better understand the economy and the flow of money through it.

“When you change the way you look at things, the things you look at change.” — Max Planck, German quantum theorist and Nobel Prize winner