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The madness of the Madman Theory

April 8, 2026
in Finance
Reading Time: 4 mins read
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The madness of the Madman Theory
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The following conversation was tape-recorded in the Oval Office some 55 Aprils ago. Richard Nixon is authorising his envoy Henry Kissinger to take a message to the North Vietnamese, with whom the US is at war. The message is that Kissinger’s boss is unhinged.

Nixon: You can say, ‘I cannot control him’. Put it that way.

Kissinger: Yeah. And imply that you might use nuclear weapons.

Nixon: Yes, sir.

The president’s aide HR Haldeman in his memoirs recalled another chat to the same effect. And so the Madman Theory — that making extreme threats can bring opponents to the bargaining table — took root. Donald Trump was practising it almost by name even in his first term. As the Iran war veers in and out of apocalyptic brinkmanship, there are reasons to think the ploy will be even less successful now than it was then.

For one thing, Nixon made his threats through private channels. If he decided to back down from them, he would not lose face in front of the entire world. In contrast, Trump’s threats to erase a civilisation could scarcely be more public. The pressure to make good on them at some point is correspondingly higher. It might intensify after his agreement to a conditional ceasefire with Iran on Taco Tuesday — sorry, April 7. This is why games of bluff are better played behind closed doors.

Another difference is that mid-20th century Vietnam was not central to the world economy. Early-21st century Iran unmistakably is. If a few weeks of bombing can trigger the worst energy crisis for half a century, a “mad” escalation might turn oil-price inflation into outright oil shortages. There is already infrastructure damage that European Central Bank chief Christine Lagarde fears will take years to mend. And none of this touches on the likely refugee exodus in the event that Iran becomes a failed state.

This tends to be the problem with Madman-ism. The threat is too extreme to be entirely credible. On the other hand, if it is carried out, then by definition the strategy has failed.

There is something else that Trump should have learnt from the Nixon experience. Public opinion matters. To even threaten let alone perform a mad action would alienate domestic and international audiences. Had Nixon used nuclear weapons in a war of choice, the already vehement anti-war protests at home might have tipped into total civil breakdown. Allies would have recoiled. The communist bloc would have been given a leg-up to the moral high ground.

Similarly, Trump cannot allow a war that now commands the support of 34 per cent of Americans to become much more violent. Autocracies can read the domestic politics of democracies. Just as North Vietnam spotted and harnessed America’s divisions over the war, so could Iran. (Democracies have a much foggier window into public opinion in closed societies.) Nor can Trump ignore allied countries, as he tacitly concedes whenever he scolds them for not helping to secure the Strait of Hormuz.

We have to reach back into the previous century for the last unambiguously successful US-led war. The failures since then happened in part because there wasn’t enough domestic or foreign buy-in to sustain the scale of force required in, say, Iraq. In other words, there is an operational case for behaving attractively, not just a moral one. You cannot — whatever the Maga refrain — “just do things”.

How might a Madman Theorist respond? What is the strongest case to be made that erratic leadership does work?

Well, Trump is the one US president elected this century under whose watch Russia has not launched a foreign invasion. Vladimir Putin attacked Georgia under George W Bush, Crimea under Barack Obama and Ukraine entire under Joe Biden. The sample size is small enough to suggest that nothing more than coincidence is at work here. But a Trump apologist could string together a circumstantial case that his “worst” traits — the aggression, the amorality — act as deterrents. No state wants to test a man who might respond with sadistic force.

Likewise, Ronald Reagan’s forward nuclear posture in the 1980s seemed unconscionable at the time. Before the decade was out, the Soviets had folded with hardly a shot being fired.

“Circumstantial” is the word, however. Good luck establishing cause and effect here with much confidence. What a thin evidential basis on which to rest such high-stakes statecraft.

The wonder is that Madman Theory is still discussed with a straight face. Nixon practised it about as well as possible — working in secret, threatening a country of little global significance — and still achieved next to nothing. To the extent that he did go feral, bombing Cambodia and Laos, it sullied the US more than it forced concessions from the other side.

There is a desperation out there to see cunning and forethought in Trump’s wildest behaviour. This has skewed financial markets, which were too optimistic at the start of the war, and in Lagarde’s view still are. If something good is to come of the present chaos, it might be a new realism about the US leader. Even if Trump does have a strategy that can be called Madman Theory, that doesn’t mean it is a good one. It just means that he has a weird reading of the past. Four years after the Oval Office conversation between Nixon and Kissinger, the North Vietnamese took Saigon. Of the 58,220 US deaths in the war, over 20,000 occurred under the genius pair.

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