Podcast Summary: The Peter McCormack Show #143
Guest: Emmanuel Maggiori
Topic: The Economics of State Failure
Date: January 30, 2026
Overview
In this engaging episode, Peter McCormack sits down with economist and author Emmanuel Maggiori to discuss the roots and consequences of state failure, focusing on Argentina’s turbulent economic history as a cautionary tale for the UK. Their wide-ranging conversation critiques Modern Monetary Theory (MMT), dissects inflation’s impact on society, explores institutional decay, and debates the merits of Bitcoin as a response to currency debasement. The tone is lively, critical, and at times plainly frustrated with current trends in economic policy and political culture.
Key Discussion Points & Insights
1. Argentina as a Cautionary Tale ([01:45]–[07:08], [09:49]–[13:46])
- Business Hostility and Institutional Rot: Emmanuel recounts anti-business decisions in Argentina—such as evicting private airlines and hostile government rhetoric—which fostered stagnation and drove out investment and talent.
- ("You can sleepwalk into turning your country into a place where nobody wants to do business. And then what you get is stagnation." — Emmanuel [03:38])
- Protectionism and Isolationism: The government’s restriction on competition in travel and transportation led to poor connectivity, higher prices, and less economic opportunity.
- Peronist Political Culture: There’s a deep-rooted tendency for political factions to blame inflation on "greedy businesses" rather than state money printing or mismanagement.
- ("Inflation is because of evil businesses or it's greedflation. Another thing that was a bit familiar—the last couple of years I started hearing people talk about greedy supermarkets." — Emmanuel [08:13])
- Self-Serving Populism: Policies are often aimed at maintaining political support (e.g., make-work schemes or protection of specific industries) rather than fostering sustainable growth.
2. The Human Toll of Inflation ([13:46]–[18:33], [19:37]–[24:00])
- Lived Experience: Emmanuel describes daily life under triple-digit inflation—prices changing faster than people can keep up, rental income slipping to nothing, and a cash economy that lacks trust in official figures.
- Dollarization & Black Markets: Argentines resort to storing wealth in US dollars, frequently using the “blue dollar” black market and even taping cash to their bodies for major transactions.
- Saving is Impossible: Constant currency devaluation erodes purchasing power, leading to inefficient, desperate behaviors—like queuing at currency exchanges or running to black markets.
- ("When people have any spare cash, you need to get rid of it ASAP, right? Because it’s like having icicles." — Emmanuel [19:49])
- Government Controls Worsen the Problem: Complicated and arbitrary controls on currency exchange produce more chaos, encourage corruption, and further undermine trust.
3. Social and Psychological Impacts ([29:05]–[35:37])
- Shrinking the Pie, Spreading Misery: Stagnant or shrinking GDP causes societal pessimism, envy, and ultimately a "brain drain" as young people emigrate for better opportunities.
- ("When the pie is shrinking, which has been the case in Argentina since 2010...there’s literally less stuff. That causes a lot of misery because people feel like—you’re literally getting poorer." — Emmanuel [29:34])
- Attack on Culture and Family: The damage of inflation and emigration is not only economic, but tears at deep cultural and family bonds central to Argentine life ("asado” and family gatherings).
4. Institutional Decline & Erosion of Trust ([37:37]–[41:29], [55:14]–[61:43])
- Judicial & Constitutional Undermining: Governments that reform justice to their own advantage—e.g., restricting injunctions or politicizing judicial appointments—undermine the independence vital to healthy economies.
- Comparison to the UK: Emmanuel notes worrying echoes in the UK: complacency about institutional integrity, increasing bureaucracy, arbitrary tax grabs, and erosion of civil liberties.
- ("My fear...is that people may be complacent about the role that institutions have had in making this country rich, and they're gonna forget why that's important." — Emmanuel [55:16])
5. Modern Monetary Theory Critique ([64:36]–[83:15])
- MMT’s Core Claims: The government can print money and never go broke (in its own currency), so concerns about deficits are misplaced; taxes serve to control inflation, not fund spending.
- ("MMT basically says if we let the government print money, it can’t run out of money. Everybody knows this, and their mother." — Emmanuel [00:00/78:28])
- Naïveté & Political Incentives: MMT ignores the reality that politicians act to gain and hold power, not for the national good—meaning money printing will inevitably go to vote-buying and corruption.
- Technical vs Economic Truths: The theory makes technically correct but economically misleading statements—e.g., the government can “repay” debts by printing nominal currency, but the real value collapses.
- ("So a country can be broke if it can fulfill its promise...They will be able to do with that money what they thought they could do. If they can’t, you’re essentially, economically, defrauding these people." — Emmanuel [81:08])
- Inflation and Inequality: MMT fails to account for the Cantillon Effect—newly created money benefits those closest to the spigot (banks, government contractors), worsening inequality.
- ("MT will drive inequality, it will make inequality worse." — Peter [84:56])
6. The Failure of "Jobs Guarantees" & Public Sector Expansion ([86:26]–[96:01])
- Jobs Guarantee Pitfalls: Argues that guaranteed government jobs are not productive or wealth-generating—often devolving into disguised welfare, as seen in Argentina.
- ("It's very difficult to have this pool of job guarantee people and then actually get organized to give them productive work to do. So...they converted that into a sort of unemployment benefit sort of thing." — Emmanuel [88:44])
- Political Expansion of Public Service: Drawing parallels between British and Argentine public sectors, Emmanuel warns that parties filled by career bureaucrats, not business people, are ill-suited for wealth creation.
7. The Nature of Value Creation ([93:25]–[97:05])
- What is Value?: Both agree that true economic value arises voluntarily—goods/services freely traded—rather than politically mandated or unproductive public jobs.
- ("Creation of value means that somebody would voluntarily want to purchase something with their own wealth. It’s the private sector. It’s the free market." — Peter [89:53])
8. Inflation, Deflation, and Money Standards ([105:57]–[118:54])
- Inflation Favors Debtors and the Wealthy: Both criticize the system for enabling those with access to debt and assets to prosper, while eroding the wealth of workers.
- Gold/BTC Standard as Discipline: Debate on whether only hard money—gold or bitcoin—could enforce the prudence, responsibility, and discipline needed for long-term prosperity.
- ("You should not like money and power. There's like a magnetism between the two. Like, why would we give that to those people?" — Peter [119:29])
9. Bitcoin as Antidote ([120:48]–[147:49])
- Bitcoin’s Appeal: Peter argues that because bitcoin is fundamentally scarce and independent of government, it provides a "sovereign" alternative immune to debasement and confiscation.
- ("I am sovereign. I custody it. They can't access it. They can't steal it from me...But there is no central authority who can debase that currency." — Peter [135:27])
- Why Not Gold? Why Not Fiat?: Emmanuel presses for concrete anchors of value, questioning whether digital scarcity alone suffices; Peter emphasizes collective trust and code-based finality as critical to Bitcoin's ascent.
- Energy and Utility: Debate over the energy consumption of Bitcoin mining; Peter points to the productive use of surplus energy and grid balancing.
10. Can the UK Learn, or Must It Hit Bottom? ([47:19]–[49:24], [180:34]–[183:03])
- Signs of Early-Stage Decay: Peter insists that chaos is already present in the UK—business closures, capital flight, policy U-turns—and that only bold, painful measures (a "Milei moment") can avert deep decline.
- The Pain Barrier and Hope: Emmanuel notes how in Argentina only after conventional policies utterly failed and pain became intolerable was radical change possible. Both agree that most societies resist tough but necessary measures until the alternative becomes obviously worse.
- ("I've heard people have asked me, do we need to hit rock bottom like Argentina in order to make a change? Or can that be done before that happens?" — Emmanuel [49:02])
Notable Quotes & Memorable Moments
| Timestamp | Speaker | Quote | |---------------|-------------|-----------| | [00:00] | Emmanuel | “MMT basically says if we let the government print money, it can’t run out of money. Everybody knows this...The question has always been, is this a good idea?” | | [03:38] | Emmanuel | "You can sleepwalk into turning your country into a place where nobody wants to do business. And then what you get is stagnation." | | [19:49] | Emmanuel | “You need to get rid of [your spare cash] ASAP, right? Because it's like having icicles.” | | [29:34] | Emmanuel | "When the pie is shrinking...there’s literally less stuff. That causes a lot of misery." | | [55:16] | Emmanuel | "My fear is that people may be complacent about the role that institutions have had in making this country rich, and they're gonna forget why that's important." | | [64:36] | Peter | “We should talk about MMT and why it’s a scam.” | | [78:28] | Emmanuel | "The reason why we've moved to central bank independence...is because we don't trust politicians to do that." | | [84:56] | Peter | “MMT will drive inequality, it will make inequality worse.” | | [88:44] | Emmanuel | "So essentially, it's a failed example of a job guarantee program. But MMT recite this as an example." | | [135:27] | Peter | "I am sovereign. I custody it. They can't access it. They can't steal it from me...But there is no central authority who can debase that currency." | | [147:46] | Emmanuel | “Thank you for that [Bitcoin defense]. I did expect to finish this interview with a rant about bitcoin, I'm sure.” | | [169:31] | Peter | "I saw inflation as an attack on the culture." | | [175:27] | Emmanuel | “At least there's a chance that something could be done differently because the alternative is to continue that kind of Venezuela path that we've been following for years.” |
Timestamps for Key Segments
- Argentina's lessons for the UK: [01:45]–[07:08], [29:05]–[35:37]
- Inflation’s daily chaos: [13:46]–[18:33], [19:37]–[24:00]
- Institutional erosion & comparisons to Britain: [37:37]–[41:29], [55:14]–[61:43]
- MMT critique and political incentives: [64:36]–[83:15]
- Cantillon Effect and inequality: [84:34]–[88:58]
- Bitcoin vs. fiat money, gold and the digital future: [120:48]–[147:49]
- UK ‘rock bottom’ dilemma and closing reflections: [47:19]–[49:24], [180:34]–[183:03]
Overall Tone & Takeaways
The episode is strikingly candid, mixing scholarly analysis with plainspoken warnings. Emmanuel provides granular detail, real-life stories, and a grounded critique of populist economics; Peter strikes an urgent and at times polemical note, blaming the political class for Britain’s potential slide into Argentine-style decay.
Repeatedly, they stress that solid institutions, prudent monetary policy, and respect for the limits of government are at the heart of national prosperity—but that complacency, naive economic theories, and overreach threaten to unravel this inheritance. The show ends on a hopeful, if uncertain, note: the possibility of a renewed, more responsible politics, if voters will accept uncomfortable truths and demand real change.
Guest’s Book
- "If You Can Just Print Money, Why Do I Pay Taxes?"—Emmanuel’s upcoming book, available for pre-order and designed as an antidote to MMT and similar economic fallacies.
Find Emmanuel Maggiori:
For further reading:
- "The Price of Tomorrow" by Jeff Booth (recommended by Peter)
- "Silicone" by Emmanuel Maggiori (tech idleness & economic incentives)
End of summary.