Money has its limitations. It cannot buy inherent success for cities where the conditions for inherent success are lacking and where the use of the money fails to supply them. Furthermore, money can only do harm where it destroys the conditions needed for inherent success. On the other hand, by helping to supply the requirements needed, money can help build inherent success in cities. Indeed, it is indispensable. “Gradual money and cataclysmic money,” The Death and Life of Great American Cities (p292)

You might try substituting the word “cities” with “developing countries.” It’s a stretch, but having my head in Death and Life while at the same time reading about the death of Robert McNamara, I couldn’t help but think about Jane Jacobs’ chapter on gradual and cataclysmic money as applied to his tenure at the World Bank.

Cataclysmic money pours into an area in concentrated form, producing drastic changes. As an obverse of this behavior, cataclysmic money sends relatively few trickles into localities not treated to cataclysm. “Gradual money and cataclysmic money,” The Death and Life of Great American Cities (p293)

Google leads me to find little overlap between McNamara and Jacobs. They were contemporaries, both born in 1916. Still, I have no idea what one thought of the other, if there’s anything written at all. However, I know what Jacobs wrote about cataclysmic money in decrying the policies of urban renewal and slum clearance - decrying the destructive and diversionary power of mass money. It doesn’t take much work to see how this chapter might apply to the thousands of projects and billions of dollars loaned from the World Bank under McNamara.

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Yesterday, Forbes rolled out some archive articles on McNamara’s legacy, including an article published near the end of his tenure at the World Bank. The article told me about McNamara’s insatiable appetite for data, but also how difficult it became to benchmark non-traditional projects, such as population projects, that began during his tenure. I was rewarded at the end of this article with a quotation from one of McNamara’s World Bank associates:

The word ‘development’ affords almost unlimited scope for the broadening of activities. It can be defined to involve every facet of life, and that’s marvelous for empire-building. But we do need to set some pretty clear limits.

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Whether it’s the banking involved in mortgage lending that Jacobs writes about directly, or the World Bank, it is not the profit motive alone that directs the path of this money. There’s an expansive ideological framework, seen in the scope of the word “development” or the judgments made in the word “slum.” These abstract ideas behind how cities and developing nations work, with little understanding of operations on the ground, can lead these sums of money on a cataclysmic and destructive path.

Gradual money enjoys no such ideological vacuum - the subject of thousands of individual and independent decisions by actors often intimately involved in the consequences of their decisions. That is, development predates banking. Bartering and hoarding was necessary in the absence of credit.

Perhaps we’re near that point again: to be wise with potentially cataclysmic stimulus while finding opportunities for gradual money and the diverse and complex systems that can develop.