Green new debt

New economics for modern activists.

With all the chaos brought on by COVID-19, economics seems to be having a bit of a moment. Welfare payments are doubling, billion-dollar stimulus packages are the ‘new normal’, and it would be fair to ask: “how might we pay for all this spending once the crisis is over?”

The real question though is: how do we ever pay for anything? If we can print billions at the press of a button to save the economy from a pandemic, could we not do the same to save ourselves from climate catastrophe? Indeed, we could.  

The time for radical structural change has arrived, so just how do we make it happen?


The last few years have seen a shift in the popular consciousness, and some genuinely transformative ideas are now on the negotiating table. Since a team of progressive US Democrats announced their Green New Deal (GND) in February 2019, the plan has been adapted by social movements and left-wing political parties around the world, acting as a catch cry for climate action. At the same time, Modern Monetary Theory (MMT) has emerged as a prominent—if contentious—new way of understanding the peculiarities of modern capitalism. Both have gained mainstream appeal for their focus on how capitalist economies can be made to work more sustainably – by no means a revolutionary aim. But what makes these new ways of thinking powerful is that they are both exciting, flexible, and within reach, and can be used to pave a realistic path towards a genuinely radical future.

The strength of the GND idea is not so much in any one particular version of it, but in its broader symbolism as a redrafting of the social contract – a chance to democratically draw together the various strands of progressive thought under the banner of societal and economic renewal. In the strongest iterations of the GND, broad themes of climate action are interwoven with commitments to Indigenous justice and workers’ rights, all of this rooted in clear, simple plans that would make a tangible difference to people’s lives.

At the heart of the GND is a jobs guarantee. This is, arguably, the lynchpin of a just transition to a sustainable society. A jobs guarantee that provides people with secure, stable, and dignified work is not just possible, it is a moral and economic imperative. 

A national jobs guarantee would bring people left behind by the transition away from fossil fuels into the fold, while addressing many of the bread and butter concerns people have with this process. It would create and provide jobs through a vastly expanded public service – from critical community work that has been devalued and defunded for so long, to the high-skilled labour needed to rebuild public infrastructure. These jobs would be provided to anyone who asked, boosting productivity and strengthening the economy in the process.

This program, and the rest of a GND, could be paid for by the same debt that will see us out of the current coronavirus crisis – a healthy debt, that is backed by the productive capacity of the nation, and itself allows us to maintain and improve this productive capacity. This is the core idea of Modern Monetary Theory: that debt is the natural state of a modern capitalist economy, and that rather than being ‘paid back’, it only needs to be managed by controlling inflation and keeping employment high.

This moment of crisis should help us to realise that economics is no more a science than history or philosophy – rather, it is political. Just as neoliberal politics shaped the economy to work for the rich, so too can we reshape it to work for all. Guided by a strong, democratic GND and a jobs guarantee, a new understanding of the nature of modern economics should be our stepping-stone to a stronger, sustainable, eco-socialist economy.

If activists can seize on this moment, it could be an opportunity to bridge the gap between the future we need and want, and the future that has been left to us.