The Difference Between a Madman and a Genius Is Success

Lex Fridman opens with a riddle Javier Milei will later claim as his own: what is the difference between a madman and a genius? Success. The guest is the president of Argentina, a libertarian, anarcho-capitalist, and economist who campaigned with a chainsaw as the symbol of cutting a corrupt state bureaucracy. He had taken office a year earlier with the country on the brink of hyperinflation, deep in debt, and marked by mass unemployment and poverty. Fridman presents the presidency as one of the most ambitious attempts at economic transformation in modern history, an economist's rigor joined to a revolutionary's passion.

In the first months, Fridman says, Milei had already claimed Argentina's first fiscal surplus in 16 years and brought inflation to a three-year low. The critics are not only the establishment he is trying to dismantle. Many are ordinary Argentines afraid of the short-term pain of radical policy. Whether one disagrees with the methods, Fridman argues, no one can deny the scale of the bet. The interview itself is an experiment: Milei speaking Spanish, Fridman speaking English, an interpreter working live, then the whole conversation overdubbed and subtitled in both languages with help from ElevenLabs.

Fridman puts an even larger frame around the numbers. Bigger than the economic program, he says, is a fight against government corruption and a fight for freedom, economic, political, and of speech. He hopes to keep sitting with world leaders this way for two or three hours at a time. Then he asks the question that actually starts the conversation: when did Milei first understand the value of freedom, especially economic freedom?

Milei says he came to the ideas of freedom as a specialist in economic growth, in 2013 and 2014. He was looking at per capita GDP across two thousand years of the Christian era. The series sat almost flat until around 1800, then rose like a hockey stick. In the same two centuries of that productivity boom, world population multiplied sevenfold.

In the textbooks he had taught, that pattern meant increasing returns, and increasing returns meant monopolies and concentrated structures, which neoclassical theory treats as a problem. Yet living standards had exploded. Middle-income people, he says, ended up living far better than emperors in the Roman era, and the share of humanity in extreme poverty had fallen from 95 percent to less than 10 percent. How could something that had lifted so many people out of poverty be bad for economic theory? Something, he decided, was not right.

A colleague suggested Murray Newton Rothbard's essay "Monopoly and Competition." Milei remembers the reading as if it were today. After going through it carefully, he said that everything he had taught about market structure for twenty years in microeconomics was wrong. The shock sent him to a bookstore that stocked the Austrian school. He bought twenty or thirty books on a Saturday, went back on Sunday, set aside money for his dog's food, the taxi, and meals, and spent the rest on more books. The next weekend he opened Ludwig von Mises's *Human Action* at page one and did not stop until he finished it. That, he says, was a true revolution in his head.

Rothbard, Mises, Friedrich Hayek, Hans-Hermann Hoppe, Jesús Huerta de Soto, Juan Ramón Rallo, Philipp Bagus, and Walter Block followed. So did Carl Menger and Eugen von Böhm-Bawerk. Alberto Benegas Lynch Jr. became a friend, and Milei still uses his definition of liberalism: unrestricted respect for the life project of others, based on the principle of non-aggression, in defense of the right to life, liberty, and property. Until then, the only Austrian book he had read was Roger Garrison's *Time and Money*, which he now considers a thin map of the school. The reading list is the conversion story. The definition is the philosophy he still carries into the presidency.

Strictly speaking, Milei says, he is an anarcho-capitalist. He despises the state, government, and violence. Once you accept Benegas Lynch's definition, which he lines up with John Locke, you become an anarcho-capitalist de facto. That is the ideal world. Real life is a pile of restraints, some of which can be lifted and some of which cannot. In real life he is a minarchist: shrink the state, strip as many regulations as possible. That is what he promised in the campaign, and that is what he says he is now carrying out.

He claims the largest structural reform in Argentine history, eight times larger than Carlos Menem's, passed with 15 percent of the deputies and 10 percent of the senators. A ministry of deregulation, he says, eliminates between one and five regulations every day, with 3,200 further structural reforms still pending. Finish that list and Argentina will be the freest country on the planet. He offers Ireland as the exhibit: a little over forty years ago it was the poorest country in Europe; today, he says, its GDP per capita is 50 percent higher than that of the United States.

He borrows a Milton Friedman interview to sort liberals into three groups: classical liberals such as Adam Smith and Friedman himself, minarchists such as Mises, Hayek, Robert Nozick, and Ayn Rand, and anarchists. Hayek, in Milei's sorting, belongs with the minarchists. The greatest inspiration in his own life is Rothbard. The daily task is to move toward that anarcho-capitalist ideal without committing what he calls the Nirvana fallacy: if you compare the present to paradise, everything looks horrible, but you do not live in paradise.

Suppose you prefer a round table and the room has a rectangle, with a flight in a few hours. You adapt, or there is no interview; next time you can look for a round table. He is harsher on anarcho-capitalists who aim their fiercest criticism at fellow liberals. Power, he says, is a zero-sum game. If they do not take it, the left will, and the harshest fire at one's own ranks becomes a service to socialism. Soccer stands painted sky blue and white do not move the ball, no matter how loud they sing; Lionel Messi does. He recalls agorists who attacked Rothbard for entering politics, then one of them who, when the police arrived, froze, wet his pants, and accepted every restriction rather than go to jail. Ignoring the constraints of the situation, Milei says, only helps socialism, because it strikes against one's own.

Fridman asks for the first steps: half the ministries gone, layoffs, price controls removed. Milei starts with the inheritance. In the first week of December, inflation was rising at 1 percent a day, 3,700 percent annualized. In the first half of the month it had accelerated to 7,500 percent. December wholesale inflation was 54 percent, which he annualizes at 17,000 percent. Argentina had not grown for ten years. GDP per capita was down about 15 percent, and nearly 50 percent of people were living in poverty.

The fiscal deficit was 15 percent of GDP: five points in the treasury and ten in the central bank, as endogenous money printing. Interest-bearing liabilities at the central bank equaled four monetary bases and matured in a single day, which meant the quantity of money could quintuple overnight. Peso-denominated maturities were worth about $90 billion. Net foreign reserves were minus $12 billion. Commercial debts at the central bank ran to $50 billion, and company dividends held back amounted to $10 billion.

Some anarchist liberals wanted every control lifted on the first day. Milei draws a line: they are liberal libertarians, not liberal fools. Instant opening, in that balance sheet, would have been hyperinflation, poverty around 95 percent, supermarket lootings he believes the Peronist party would have organized, and an ouster that would have put Peronists back in office by early in the year. The first job, therefore, was to end the fiscal deficit.

They cut ministries to nine, then eight, and dismissed about 50,000 civil employees, refusing to renew contracts unless the post was strictly necessary. Public works stopped. Discretionary transfers to the provinces ended. Public-sector wages were diluted, and utility subsidies were stripped back so rates could return toward cost. Treasury fiscal balance, he says, arrived in January, the first month in office. In the last 123 years Argentina had a deficit in 113 of them; the other ten, in his telling, were years it simply was not paying the debt. Critics had said an adjustment of more than one point of GDP was impossible. They had planned on a year. They did it in a month. They also cut what he calls poverty managers: piqueteros who verified a required "counter service" and, at the signing, took half the money. Removing that cut doubled what recipients got from the same budget.

Once the treasury stopped printing, interest and some capital were paid and a debt market began to reappear. That let them move debt off the central bank and onto the treasury, where he says it had always belonged, an adjustment of about 10 percent of GDP. Add the treasury's five points and he calls the total the largest fiscal adjustment in the history of humanity: 15 points of GDP. Most of it, he argues, went back to the public as less seigniorage and lower inflation. A country tax was raised for a time, cut in September, and scheduled for elimination in December, along with import taxes. He puts the amount returned at 13.5 points of GDP, because the real tax burden is the size of the state. In December they were discussing hyperinflation; now, he says, they are discussing 30-year loans.

Wholesale inflation fell from 54 percent to 2 percent, divided by 27. The 17,000 percent annualized rate is now close to 28 percent a year. The latest consumer figure he cites is 2.7 percent. Controls remain, because of the central-bank balance sheet and the stock of debt, and they are coming off day by day. A 2 percent monthly crawl plus international inflation means, in his arithmetic, you subtract about two and a half points from what consumers observe. True monetary inflation, he claims, is 0.2 percent a month, 2.4 percent a year. The argument, as he tells it, has moved from whether inflation might hit 17,000 percent to bringing it toward 2.5 percent annually.

They did not get a prior hyperinflation to wipe out monetary assets and restore money demand, and they did not expropriate. Before the Convertibility plan, which he calls Argentina's most successful program, Raúl Alfonsín had seen inflation of 5,000 percent and Menem 1,200 percent, plus the compulsory Bonex debt swap. Milei's team, he says, cleaned $45 billion off the central-bank balance sheet voluntarily in six months, without price controls or a fixed exchange rate. Earlier programs adjusted utility rates before the announcement; his government had to do it on the fly. Coverage went from about 10 percent of costs to 80 percent.

A paper titled "Passing the Buck," by Gerardo della Paolera, Bozzoli, and Irigoin, had called Menem's first government the best in Argentine history. Accounting for the crawl and the missing expropriations, Milei says his disinflation is more genuine and deeper, done with a structural reform eight times larger, 15 percent of the lower house, 10 percent of the Senate, and in the first six months. Decree 70/23 and the Basis Law, he says, jumped Argentina 90 places in economic freedom, to institutions comparable to Germany, France, and Italy. He wants to pass Ireland at its peak, then Australia, New Zealand, and Switzerland. Analysts had next year's growth at 5 to 6 percent; JPMorgan has revised up. Juan Pablo Nicolini, presenting at the central bank's monetary meetings, argued that the fiscal work alone can double GDP per capita in ten years, about 7 percent a year. They also sent a single paper ballot law, moved to end mandatory open primaries, and cut the financing of political parties, mechanisms he says politics had used to steal.

Fridman asks for the most painful costs of the radical reforms. Milei rejects the framing. They did not create poverty; they inherited it and revealed it. Argentina had been an economy of total price controls, with the deficit financed by printing. In the last year alone, he says, 13 points of GDP were covered that way. Controls sat on the prices that enter the consumer index, so inflation was distorted, not necessarily lied about. Because Argentina measures poverty and indigence by an income line, distorted prices distorted those rates too. The previous government showed 41 percent, on a six-month lag, while the trend was getting worse.

He offers a desert-island thought: you are alone with a million dollars and nothing to buy. Then a joke from the Argentine professor Juan Carlos de Pablo. A man asks the price of a vase and hears $5,000. Across the street it is $1,000. Across the street there is no vase. When this stall has stock, the punch line goes, it will also cost $1,000. Supermarket shelves were empty. The statistics said you were better off; you could not actually buy the goods. Leave that in place, Milei says, and people starve with money that only looks like purchasing power.

The only way to save people, in his account, is to make prices transparent so products reappear. That also makes transparent the cost of the basic food basket and the total basic basket, the indigence line and the poverty line. Poverty jumped to 57 percent. Activity found a floor in April and a cyclical recovery began. Real wages have beaten inflation every month; nominal wages and pensions, he says, are already back near November levels. The strongest wage gains are in the informal sector. Poverty and extreme poverty are falling faster than they imagined, from 57 percent in January to 46 percent, 11 points, and he says not a single job was lost in the process.

Deseasonalized data, he says, show August activity back at December levels. Country risk fell from 3,000 basis points to 770, and Fitch raised Argentina to CCC. The dollar is below the level at inauguration. Removing inflation also removes the inflation tax and the distortion of relative prices, so resources allocate better. His popularity and the government's approval are, he claims, above the moment they took office, which is supposed to be the peak. If the image held in the worst months and they did not abandon the ideas, he asks, why change now that the numbers are improving?

Fridman turns to "the caste," the corrupt political establishment, and to the powerful people arrayed against the program. Milei says they have fought corruption as never before in Argentina. When they took office there were about 900 roadblocks a year: people who made a habit of blocking streets, on social plans and with a lot of money. Cutting the poverty middlemen hit that machine. Two days later one of the best-known piqueteros called a demonstration, claimed 50,000, and was expecting 100,000 as a show of force. The Ministry of Human Capital cut the funding. An anti-blockade protocol said those who blocked streets would lose welfare and those who broke the law would go to jail, and the message was repeated on transport channels. About 3,000 people came. From that point, he says, they did not block the streets anymore.

Public works were another engine of graft. So were discretionary transfers to the provinces, booked as obscurely as possible, with the national government and governors in collusion and the money used for other things. Human Capital, he says, files criminal complaints in court, not in the media. Two days before the interview, Cristina Fernández de Kirchner was sentenced for corruption; the next day the government stripped privileged pensions. Kirchnerism, he adds, used disability pensions for corruption. There is a city, in his telling, with more disability pensions than people.

They restored freedom to the judiciary, he says, and do not pressure it. Under his government not only was Cristina convicted; the two terrorist attacks carried out by Iran were also condemned. Each deregulation is, in his formula, a privilege taken from a politician, a privileged company, or a power group. That is why the resistance is so fierce. No one in Argentina, he claims, has fought corruption this way.

He then names what he calls one of his great battles: the corruption of the media. He removed official advertising, which is why, he says, the press still speaks terribly in weeks full of good news. They demand a monopoly on the microphone, the right to insult, hurt, and offend without anyone answering. That is why a large part of Argentine journalism hates X, and why liberal libertarians love it. Journalists who claim to defend freedom of expression, in his account, want to censor ideas they dislike because they would lose on a level field. When you tell a socialist the truth, they cry that it is hate speech. He says the people he calls socialist murderers killed 150 million human beings, and that they cannot stand equal terms.

He describes a shakedown he says he knows in fact: a journalist twice dropped a folder on a businessman and demanded money to stay silent. The businessman refused; the journalist published; both cases went to court; the journalist lost both times. The process is slow, and in the meantime a life is dirtied. X, he argues, took away the monopoly on the microphone and with it the economic return to extortion. Read an Argentine newspaper, he says, and 85 percent is a lie. With honorable exceptions, most journalists are liars, slanderers, and defamers, and if the monopoly returned they would sell silence, because that is what they are.

The fight, for him, is not only economic. The Berlin Wall fell officially in 1989; socialism, he says, fell in 1961, when the wall went up because people were fleeing west. After 1989, socialists moved class struggle into other parts of life: gender ideology, the environmental agenda, Black Lives Matter, indigenous politics, LGBT causes. Liberals, he notes, were first for equality before the law; he credits Jeremy Bentham in 1750 with demanding it for women. The left, in his telling, radicalizes that into female chauvinism and assigned rights someone else must pay for. Environmental policy he calls a tax-collection excuse built on a Malthusian idea that there is no room for everyone. Argentina's Ministry of Women, he says, did not reduce a single femicide, and Alberto Fernández, "the most feminist president in Argentine history," beat his wife.

He counts three fronts: economic, free-enterprise capitalism; political, a liberal republican democracy with checks and balances; and cultural. Socialism, he says, won culture and therefore elections, then produced misery. Fukuyama's end of history was a gift to the other side; in 1990 socialists met at the São Paulo Forum and used Gramsci to take media, culture, and education. Chile had economic success and lost it because it skipped the cultural battle. Asked if he fears assassination, he says there is no point in living in slavery. Nino Bravo's song "Libre" tells of Peter Fechter, an 18-year-old killed fleeing east to west as the wall went up. A 1998 Alcatraz audio tour stuck with him: the recreation yard facing San Francisco Bay was the inmates' hardest place, because they could see a free city growing and could not take part. His greatest hero is Moses, who with Aaron confronted the equivalent of the United States, China, and Russia and told Ramses to let his people go. He says he will die with his boots on.

Fridman asks what Milei admires in Elon Musk. Milei calls him an unconventional fighter for the ideas of freedom. What Musk did with Twitter, now X, to wake the world to "the socialist virus, the woke virus," already makes him, in this telling, a hero in the history of humanity. Their first meeting was booked for no more than 15 minutes and ran a little over 45 because Musk had a flight. Instead of a standard successful-businessman conversation, Musk raised demography and growth, then asked when Milei would have children. Milei said he has five. Musk said the four-legged ones do not count.

The second meeting came amid campus antisemitic demonstrations, Palestinian flags, and the harassment of Jews; Musk wanted to talk about the cultural battle. The third lasted about two and a half hours, on freedom and what was at stake in the American election. Musk is closely interested in Argentina's ministry of deregulation and, with another person, is trying to replicate the chainsaw model; Donald Trump, Milei says, is enthusiastic too. Fridman notes that Musk and Vivek Ramaswamy are heading the Department of Government Efficiency. Milei's advice is to cut to the chase, go all the way, and not let the guard down. Federico Sturzenegger's ministry keeps a public counter of the days remaining on powers delegated from Congress, with teams for deregulation, spending cuts, and shrinking the structure, plus an elite group cleaning laws. Every day they remove between one and five restrictions. The people who complain, he says, are losing privileges and will have to explain them.

He admires Trump for understanding the cultural battle and the woke virus, and for courage: a near-miss assassination, a matter of moving at the right moment, did not stop him. The media campaigns feel familiar. Milei says no one in Argentine history took a negative campaign like his. About to give a speech, he saw Sylvester Stallone, who knew who he was, and had to pinch himself. Stallone's gospel, as he hears it, is to keep going no matter how hard they hit you. After nearly a year of what he calls media torture, the American trip felt like a break. The same press, he says, sent three drones to spy on the presidential residence, spread lies about his father, a man of two heart surgeries who nearly died of an attack in hospital, and even targeted his dogs, "the most wonderful beings in the universe." He calls Trump a Viking.

Argentina, he says, chose the United States and Israel as allies during the campaign, as stand-ins for the West and for liberal democracy against autocrats. He wants deeper trade and investment and would like to join NATO. On the dollar he is careful. Review his statements, he says, and he talks about currency competition and eliminating the central bank, not strict dollarization; if people later choose the dollar, that is their choice. Argentines can already transact in any currency. Endogenous dollarization still requires cleaning $50 billion of commercial debt and $10 billion of trapped dividends, after a $45 billion write-off, because you cannot close a bankrupt bank until you redeem the issue and the interest-bearing liabilities. The monetary base is now frozen. As the economy grows, dollars gain share until closing the bank is easy. If someone handed him the money today, he would dollarize. He did not sell the central bank's treasury bonds at 20 cents, a price now 60 to 70, because with the opposition he says he would already be in jail.

Fridman, a lifelong fan of Diego Maradona and Lionel Messi, asks for the greatest footballer of all time. Milei saw Maradona at Argentinos Juniors in 1980, at Boca in 1981, and at the 1979 youth tournament in Japan, and he loved the talent. The best of all time, not just of Argentina, better than Pelé, is Messi. An old article titled "Messi is Impossible" looked at every position from midfield forward and found him the best in each. Cristiano Ronaldo, in this comparison, was almost at that level in two areas and absent from the rest. Adjusted for the scoring rates of Pelé's era, Milei says Messi's equivalent goals are far higher.

It is not only the numbers or a World Cup. Messi does things that look technically and physically impossible, moves that do not respect human logic, like watching Usain Bolt run. The 1986 quarterfinal against England, watched at his godfather's house, is "absolutely indescribable," as if he had been asked to describe love for a partner. Some humans, he says, have the privilege of vibrating closer to God. Certain Puccini arias, from *La Rondine* and *Gianni Schicchi*, sound as if they were dictated by God. That is why, in Judaism, one does not use the Creator's name: there are no words. You can only enjoy it and be grateful you were there to witness it.

He was a goalkeeper in his youth, and he is not sure he was any good. The keeper is the only player who may use his hands, the only one in a different shirt, and he trains alone. When his team scores, everyone celebrates at the other end; he stays put. When he makes a mistake, it is an own goal, a two-goal swing against a teammate's single marvel. That imbalance, he says, forges a temperament used to solitude, which is what power is: you decide alone. A president's own goal hits millions of people. Goalkeeping, training in economics and liberalism, and a very tough childhood are the university that gave him the tools for the office.

The personal toll is being defamed, insulted, and attacked every day. He repeats the Stallone line: keep going despite the blows, including the ones from behind. Faith has been a fundamental element, especially recent study of Judaism and the Torah, which gave him background for the adversities of the last few years. God is the creator, the maker; he calls him "the One." Asked whether the invisible hand of the market or the hand of God is the better guide for humanity, he laughs: they are perfectly in sync. The nickname El Loco does not bother him; he has had it since he was ten and even enjoys it. People called José de San Martín crazy for crossing the Andes to liberate Argentina, Chile, and Peru, and would have said the same of Michelangelo and Einstein. What is the difference between a madman and a genius? Success.

Why does the market work so well as a guide for humanity? First, Milei says, define it. The market is a process of voluntary exchange in which individuals cooperate through the transfer of property rights, and private property is upheld. That is the system that allocates resources. Mises's *Socialism* showed that without private property, prices cease to exist and resources are diverted. Why not pave a road in gold? Because you already have economic calculation, prices, in your head. Without property there are no prices, and free-market capitalism is the best mechanism humankind has developed for allocating resources. Markets must be free of state interference and open to entry and exit. He prefers competition as Israel Kirzner of the Austrian school described it, or, in a neoclassical frame, as William Baumol's contestable markets.

The most wonderful thing about capitalism, he says, is that you can only be successful by serving others with better-quality goods at a better price. If you succeed, you are a hero, a social benefactor, a prosperity machine. The better you do, the better it is for society. At their first meeting, Musk said he wakes every morning thinking about what problem he could fix for humanity. That sentence, which Milei's sister also remarked on, is a large part of why the admiration runs so deep.

In his view of how the system works, market failures do not exist. They are a problem for neoclassical economics because of the mathematical tools it used to build the analysis, not a real issue in everyday life: a problem in the minds of economists. His latest book, *Capitalism, Socialism, and the Neoclassical Trap*, is about that claim. Mises said there are only two systems, free-enterprise capitalism and socialism. Hayek's *The Road to Serfdom*, in Milei's reading, showed that any middle ground is unstable and drifts toward socialism. An intervention causes government failure, which triggers further intervention, a trap of more and more interference. Neoclassicals, armed with market-failure theory, have been instrumental in raising the level of intervention rather than making the world better.

Demian Reidel, chair of the president's advisory council, took his Harvard doctorate under Kenneth Rogoff, who called him his best student. Reidel recently surveyed search algorithms and policy recommendations and mapped them from red, linked to socialism, through yellow, to blue, free-market ideas. The largest share of the recommendations, "scandalously," leaned left. That chart, Milei says, is the empirical evidence for the argument in the book.

From his four-legged children, Milei says, he has learned unconditional love. His name in Hebrew means loyal friend, faithful friend, and on the Chinese horoscope he is a dog. Loyalty and decency are what define him, and those virtues live in dogs, who love without conditions. Spiritually they are superior beings, in his case, because he does not forget or forgive those who have harmed him. All those who have insulted, defamed, and criticized him: he remembers each one, and he does not have the greatness needed to forgive them.

Betrayal in politics, he says, depends on what you expected. If you thought someone would be loyal, it hurts. If you expected nothing, it does not, because you are dealing with a person who never shared your values. Politics is full of people who will not share them. It is a cost-benefit problem: let the ship sail, or let it sink. That is not his case. He fights until the end. Traitors exist; that is part of politics, and it is not his line.

Asked for advice to young people who admire the revolutionary spirit and want a life with impact, he says he did not do this thinking about moving the world. He defined what makes him happy and lived consistently with it. Never give up, and never be half-hearted. He would rather cry because he failed than be unable to cry because he never tried. He is a perfectionist who has a bad time when he errs, but he would rather get things done. If it goes wrong, that is part of life; he will not have to regret failing to do what he thought needed doing at that moment. Hope, for Argentina and for humanity, comes from social media and the tech revolution: more people each day see how important freedom is to peace and prosperity. Bureaucrats and elites fight untiringly to enslave; a wave of freedom has been unleashed, and if we wage the fight, the world will be better.

"Viva la libertad, carajo" started at the end of his book presentations and stuck. His speeches now close with three lines: may God bless the Argentinians, may the forces of heaven be with us, and viva la libertad, carajo. The first is faith and thanks to the Creator for daily gifts. The second is a line from Maccabees 3:19, that victory in battle does not depend on the size of the army but on the forces of heaven, the Maccabees against the Greeks and the recovery of the temple. The last is his war cry. He thanks Fridman for an education unusual among interviewers, for having windows to play foul and not taking them.