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#143 – Emmanuel Maggiori – The Economics of State Failure

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Feb 5, 2026

Guest

Emmanuel Maggiori

Emmanuel Maggiori, economist who lived through Argentina’s inflation and institutional decay, shares sharp observations on monetary policy, black markets and why inflation erodes trust before prices. He covers MMT’s political risks, dollarization and dollar/Bitcoin as flight options. They also dig into corruption, shrinking opportunity and how societies slowly drift into dysfunction.

03:03:21

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insights

INSIGHT

Inflation Imposes Hidden Transaction Costs

Inflation imposes large hidden transaction costs and wasted effort (shoe‑leather costs).
Maggiori reports Argentinians spent time chasing foreign currency and queuing, which harms productivity.

question_answer

ANECDOTE

2001 Bank Runs Left Scars

Emmanuel recalls the 2001 Argentine bank runs and deposit freezes that left families ruined and presidents resigning.
He describes vivid memories of protests and household losses from dollar‑denominated debts.

insights

INSIGHT

MMT’s Theory Clashes With Political Reality

MMT rests on technically true premises but ignores political economy and practical constraints.
Maggiori argues MMT underestimates slack, supply bottlenecks, and persistent incentives to keep printing.

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Argentina's anti-business drift

01:40 • 3min

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Travel, competition and Argentina's isolation

04:10 • 3min

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Peronism, ideology and corruption

07:08 • 3min

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Why Argentina keeps printing money

10:13 • 2min

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Political incentives behind monetary policy

12:06 • 2min

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Living through inflation: daily chaos

How Argentines save and dollarize

19:38 • 8min

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Shoe-leather costs and black markets

27:29 • 2min

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UK warning signs and household impact

29:15 • 2min

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Shrinking pie, stagnation, and morale

31:22 • 4min

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Family, migration and cultural loss

35:11 • 3min

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Erosion of institutions and legal risk

38:00 • 3min

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Corruption normalized and public cynicism

40:34 • 7min

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MMT basics and seductive claims

48:01 • 6min

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Why MMT risks politicizing money

53:40 • 13min

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MMT's inflation defense examined

01:06:41 • 12min

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Taxes, legitimacy and the Massachusetts example

01:18:26 • 7min

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MMT's distribution problem and Cantillon effects

01:24:56 • 5min

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Job guarantee critique and Argentina example

01:29:40 • 5min

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Value creation, productivity and public jobs

01:34:46 • 8min

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Inflation as theft of time

01:42:34 • 4min

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Deflation fears and the 2% target

01:46:41 • 8min

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Saving vs hoarding and full-reserve idea

01:54:34 • 6min

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Bitcoin as protection against debasement

02:00:20 • 7min

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Bitcoin adoption, utility and scepticism

02:07:00 • 3min

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Layering, Lightning and Bitcoin payments

02:10:10 • 7min

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Bitcoin's real-world benefits for Argentines

02:17:28 • 7min

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Energy use, mining and grid benefits

02:24:42 • 8min

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Personal finance choices and real assets

02:32:36 • 5min

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Malign effects of cheap credit and malinvestment

02:37:26 • 10min

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Argentina's reform experiment under Milei

02:47:00 • 6min

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Dollarization and long-term credibility

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Emmanuel Maggiori joins me to explain how inflation, incentives, and broken monetary rules quietly reshape behaviour inside an economy.

From Argentina's black markets and capital controls to money printing, MMT, saving vs spending, and institutional credibility, we explore why inflation destroys trust long before it destroys prices — and why countries don't collapse overnight, but drift into dysfunction as rational people adapt.

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TIMESTAMPS: 00:00 – Introduction 02:34 – Argentina As Warning 05:00 – Anti-Business Drift 23:49 – Black Markets Emerge 44:40 – Credibility Ends Inflation 57:36 – Corruption Normalised 1:17:14 – MMT Political Reality 1:48:21 – Why Saving Dies 2:00:40 – Discipline Over Time 2:54:44 – Pain Enables Reform

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CONTACT PETE › Website – http://petermccormack.com › Feedback – https://www.petermccormack.com/contact › Email – me@petermccormack.com › Instagram – /mccormack555 › X/Twitter – https://x.com/petermccormack/

CONNECT WITH EMMANUEL MAGGIORI › Website – https://emaggiori.com/ › LinkedIn – https://uk.linkedin.com/in/emaggiori

SPONSORS › IREN - https://www.iren.com/ › Ledger - https://www.ledger.com/ › Gemini - https://gemini.com/

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FILMED BY CURTIS TAYLOR › https://www.curttaylor.co.uk/ › https://x.com/curttayloruk/

EDITED BY CONOR MCCORMACK › https://x.com/ConorM04

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