Catastrophic Money
In The Economy of Cities, Jacobs coined the phrase catastrophic money to describe the capital flows that produced dual economies in developing regions: a modern sector serving external markets, surrounded by a neglected local economy starved of the attention, talent, and investment it needed to develop on its own terms. The money itself was not malicious. Its scale and velocity were incompatible with organic development, which proceeds through the gradual accumulation of small innovations, each building on the previous. Catastrophic money short-circuits this process. It arrives too fast, in quantities too large, directed by interests too remote from the local conditions, to produce the locally responsive development that sustains long-term vitality.
In The You On AI Field Guide
The result is a characteristic pattern. The modern sector — built by catastrophic money — looks impressive. It has advanced technology, high productivity, dramatic metrics. The local economy looks backward by comparison: small, slow, inefficient