Robert McNamara, Development, and Money

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.

Organized Complexity - "Unaverage" Clues

[Unaverage clues] are often the only announcers of the way various large quantities are behaving, or failing to behave, in combination with each other. “The kind of problem a city is,” The Death and Life of Great American Cities (p443)

A few years ago, I was helping collect data for a citywide traffic count. Unlike many traffic counts, automating the count as cars travel over pneumatic tubes, this was a pedestrian and bike traffic count, requiring the coordination of manual counters at various points across the city. I was one of those counters at what turned out to be one of the most trafficked points.

The resources required for such a comprehensive statistical study aren’t insignificant. So what do you do if you don’t have these resources and no one’s collected data for your area?

This awareness of “unaverage” clues—or awareness of their lack—is, again, something any citizen can practice. “The kind of problem a city is,” The Death and Life of Great American Cities (p443)

I had four clickers: two for pedestrians and two for bicyclists. I reset one pair every 15 minutes while continuing to take the count on the other. I did that for two hours. Over that time, two unaverage clues sat down on either side of the bench I’d found with a great view of the count. They were panhandlers.

Statistically, these two men were inconsequential - two clicks out of hundreds. However, their presence is a clue to the behavior of many more people. They indicate that a large number of people walk by this location. A fraction give them money. They have every economic incentive to find a valuable location. As long as they’re quiet, not hassling anyone, and in the public right-of-way, no one can tell them to move.

These unaverage clues, in professional-speak, are proxies - variables with close correlation to another variable.