Biology of Business

Caracas

TL;DR

Caracas built a petrodollar metabolism in the 1970s, then consumed its own infrastructure when oil collapsed—autophagy made visible in a mountain valley.

By Alex Denne

Caracas sits in a narrow valley at 900 metres elevation, hemmed between the Avila mountain to the north and sprawling barrios climbing steep hillsides to the south. That topography creates a metabolic bottleneck: a city of roughly three million people (metro area perhaps five million, though reliable census data has become scarce) squeezed into a valley floor with limited horizontal expansion, forcing vertical growth and informal settlement on unstable slopes.

The city's modern history is a textbook phase transition driven by oil. When petroleum revenues exploded in the 1950s and 1970s, Caracas built the Parque Central towers (once Latin America's tallest), the Caracas Metro, a university campus designed by Carlos Raúl Villanueva that earned UNESCO status, and a highway system modelled on Los Angeles. Venezuela had the highest per-capita income in Latin America. The founder effect of oil wealth created an urban organism adapted to abundance—import-dependent, consumption-oriented, and structurally incapable of self-sufficiency.

When oil prices collapsed and political mismanagement compounded the damage, Caracas experienced autophagy: the organism began consuming its own infrastructure. The Caracas Metro, once a point of national pride, deteriorated as maintenance budgets vanished. Electricity blackouts became routine. Supermarket shelves emptied. An estimated seven million Venezuelans emigrated between 2015 and 2023—a demographic haemorrhage that stripped the city of human capital in a source-sink reversal where the sink became the source of outflow.

The biological lesson is stark. Caracas demonstrates what happens when an organism builds its entire metabolism around a single energy source, loses access to that source, and lacks the phenotypic plasticity to adapt. The city's remaining residents endure in a system where the bolivar has lost virtually all value through hyperinflation, dollar transactions fill the gap informally, and the gap between the still-luxurious eastern districts and the western barrios has widened into what amounts to two separate organisms sharing one valley.

Key Facts

3.0M
Population

Related Mechanisms for Caracas

Related Organisms for Caracas