Thanks to the formidable advocacy of Alexandria Ocasio-Cortez, the idea of a Green New Deal has attracted widespread attention on both sides of the Atlantic. Billed as a “new national, social, industrial, and economic mobilization on a scale not seen since World War II”, it is perhaps unsurprising that critics have focused on the price tag.
In response, many Green New Deal proponents cite the ideas of Modern Monetary Theory (‘MMT’). Although MMT has been quietly growing in prominence for many years, the school of thought’s association with the Green New Deal has propelled it into the limelight.
MMT holds that ‘money is a creature of the state’, and that a sovereign government with its own currency and central bank faces no financial constraints on spending. Other limits do exist – most notably inflation, but also political and administrative constraints – but money itself is no object.
