National income is one of the first concepts that the students of the department of economics encounter about their departments in the faculty. National income calculation methods are among the most likely basic questions to be asked in many introductory economics exams. It is not known that it was once a hydraulic machine that calculates national income. Moreover, the existence of this machine, which is the size of a large cabinet, surprises people today with its strange appearance.
The famous economist A.W. With this hydro-mechanical machine, invented by Phillips in 1949, the cash flow in an economy was explained by the colored liquid and various parts that the machine contained. The "Monetary National Income Analog Computer", which stands for MONIAC, is named after ENIAC, a predecessor digital computer.
About 2 meters high, 1.2 meters wide and 1 meter deep, this machine was fixed to a wooden frame and consisted of a series of clear plastic tanks and pipes. Keynesian income-expenditure model was basically the working principle of MONIAC.
Each tank represented an organ of the national economy and the flow of money in the economy was visible through these tanks with colored water. The large tank representing the treasury at the top was transferring the liquid it had to other tanks, representing the various ways in which the country could transfer its resources. For example, there were different tanks for health and education. To increase health expenditures, a tap can be opened to drain the liquid from the treasury into the tank, which represents health expenditures, so that it flows down the model, filling other tanks and representing other interactions in the economy. Water can be pumped back into the treasury from some tanks to represent taxation. With changes in tax rates, pumping rates can be increased or decreased. The saving function was realized by withdrawing some of the liquid from the expenditure stream and injecting additional liquid into this stream as investment income. When the investment flow exceeded the savings flow for any period of time, the balance of payments surplus was running. Imports and exports, on the other hand, were carried out by draining the liquid from the model and adding liquid to the model. As a result of all this, the Keynesian model could be used dynamically in the machine.
An example of this interesting machine, which was produced in small quantities, was brought to the Faculty of Economics of Istanbul University in 1951, with the efforts of Prof. Dr. Besim Üstünel, a very short time after its invention.
Bibliography
Nazan SUSAM , Nurtaç YILDIRIM , Hakan BEKTAŞ, Introducing the Moniac: Its Historical Process in the Istanbul University Faculty of Economics, İstanbul İktisat Dergisi - Istanbul Journal of Economics 71, 2021/1, s. 1-19.
https://en.wikipedia.org/wiki/MONIAC
