The publication of the Green New Deal resolution in the US Congress, authored by Alexandria Ocasio-Cortez and backed by a broad alliance of Democratic lawmakers, is an event around which the outcome of the 21st century will turn.

If it were to become law, it would not only represent the biggest single victory for pro-planet politics since the Kyoto treaty. It would represent a systemic loss of power by the fossil fuel industry, the decisive revival of the state as an economic entity in Western capitalism and a fusion of environmental justice with redistributive justice on a scale not currently envisaged by any left party in Europe.

While you’re cheering, you should also realise that it would – as currently designed – commit progressives in the US to a left-wing version of economic nationalism. It would seek consent from a nation of petrol heads for the biggest green transformation in history by promising them jobs and prosperity at home. We’re not going to sell this as a way for other countries to develop and get richer, is the message of Ocasio-Cortez’s backers: this is a way for America to save itself and prosper.

Let’s begin by understanding what’s revolutionary about Ocasio-Cortez’s bill. First, while it’s sold as a replay of Roosevelt’s New Deal, it is in fact designed around what came later: the massive mobilisation of US industry and science to win the Second World War after 1941. Against this, the levels of state intervention carried out under the New Deal (1933-39) were puny. As Arthur Herman documents in Freedom’s Forge – a book avidly promoted by some of Ocasio-Cortez’s advisers – Roosevelt achieved the massive output of war material, and generational step-changes in technology, by mobilising the private sector under state planning, and by nationalising intellectual property.

With a 21st-century economy that is heavily financialised and segmented, it would probably take even greater regimentation, command planning and the suppression of intellectual property rights to achieve what the Green New Deal proposes: namely, the reduction of the US’s net carbon emissions to zero within ten years. It would mean scrapping all fossil-fuel burning transport systems except commercial airliners; it would mean rebuilding the automobile industry and the energy industry more or less from scratch. And it would entail behavioural changes unprecedented in peacetime.

As for the financing, the Ocasio-Cortez bill is indistinct. It calls on the federal government to “provide and leverage” adequate capital in a way that ensures the public retains “appropriate ownership stakes and returns on investment”. But it places no overall figure on the amount of extra tax raised, and – wisely in view of the political challenge – proposes no punitive taxes on the use of carbon itself.

As a result, the bill has come under fire from two sets of people. Neoliberals who are too shocked at the radicalism of its proposals on the state to do anything but pull random numbers from their heads about its costs. And on the other side, the climate NGOs, who had carefully crafted their transition plans on the assumption that free-market capitalism would have to be incentivised into the transition, and that the energy consumer would have to bear the cost.

I support the proposed Green New Deal legislation, above all else for its shock effect. It is the first realistic attempt to quantify what a developed world state would need to do in order to a) actually reverse climate change and b) sell the necessary transition to carbon-addicted voters. It would have to deliver jobs, growth and prosperity at home and – though the bill skirts around this – it would have to abolish the market in large parts of the economy.

In my work on the transition beyond capitalism, I’ve argued that the state, in general, needs to be the enabler and rule-setter for a diverse ecosystem of corporations, non-profits, co-ops, mutuals and commons-based production systems. For a post-capitalist economy to take off, it has to work as spontaneously as the market does, not like the Soviet economy, which had to be rebooted by bureaucrats each morning.

However, when it comes to the transition to a post-carbon economy, we are probably going to need something close to “capitalist Stalinism” – which is effectively what the US War Production Board practised after the attack on Pearl Harbor in December 1941.

But “capitalist Stalinism” still operates in a world of money: raising it involves incurring debts – which are traditionally held by others in the multilateral global system. Meanwhile, the state suppressing the market in energy production and taking ownership stakes in major industries would, in a world economy dominated by global finance, upset the apple cart still more.

Much of the right-wing criticism of the Green New Deal has been focused on its allegedly unmeetable cost. A charitable estimate provided by Bloomberg opinion writer Noah Smith was $6.6trn – or 34 per cent of US GDP. Much of this cost relates not to the green transmission measures themselves, but to the social programmes needed to redistribute wealth alongside it.

Ocasio-Cortez’s advisers say all this is like “trying to cost the Second World War in advance” – but that is what Roosevelt did, hiking the defence budget by $45bn in 1941, and making subsequent requests that took the entire outlay to $83bn in the final year of the war. If we want to emulate FDR, I think it is worth accepting a ballpark figure in order to start the argument, which will soon rage here in the UK, over the mix of tax raising, pump-priming and monetary stimulus needed to make a green transition work.

The backers of Ocasio-Cortez’s bill released and then withdrew an FAQ which seemed to suggest the investment would be paid for using the methods advocated by Modern Monetary Theory (MMT). MMT rightly argues, as against free-market economics, that a state with a sovereign currency cannot go bust. The state can create growth, and thus the means to pay back money borrowed; and it can create money, via the central bank, which can be used to lend to government.

For many people on the radical left, MMT has become a new panacea - a get-out-of-jail free card for Keynesian economics in a world of highly indebted and stagnant capitalism. Unfortunately, it is not.

While it’s true there is a lot more tax and spend capacity in a modern economy than the free-marketeers admit, it is not infinite. Nor is it possible to infinitely expand the money supply without collapsing the value of money towards zero. MMT gives no account of where economic growth or profit comes from other than within the monetary system itself. Unlike Marxists, who believe value is created in the production process, the MMT crowd believe it can be created by the interplay of fiscal and monetary policy. (For a longer takedown, see this from the left economist Michael Roberts.)

If MMT is wrong, there are two negative outcomes for the Green New Deal project. First, it’s not going to get to first base within the very state apparatus and corporate world it needs to mobilise. In the US, just as in the UK, the Treasury, the Federal Reserve and numerous other spending departments employ armies of economists who will, on day one of a Democratic administration coming to power, tell lawmakers that their calculations are hogwash. Even economic advisers close to John McDonnell’s shadow Treasury team have been heard to use similar language about MMT.

By contrast, in the Second World War, Roosevelt’s war economy directives were accepted, acted upon and creatively improved because, both at the level of the firm and the macro-economy, the essence of Keynesian economics was understood. So building an intellectual framework for the fiscal and monetary policies needed to deliver the Green New Deal is not an optional extra.

The second impact of MMT being wrong concerns internationalism. If the US wants to borrow a further $6trn on top of the $16trn it is currently liable for (excluding intragovernmental holdings), the world economy has to be prepared to assume that debt. If it wants to absorb some of its own debt by printing dollars and allowing the Fed to buy it, then the global monetary system has to accept that. Nice though MMT looks on the campus at Bard College, its academic home, to the Treasuries of China and Japan it might just look like the rationale for American monetary warfare against the rest of the world.

So the best thing for the US left to do would be to issue a new FAQ explaining, in detail, how to pay for the GND. The British Labour Party, which issued its own, paler imitation of the Ocasio-Cortez plan today, operates by necessity in a world where the Office for Budget Responsibility and the Institute for Fiscal Studies subject every proposal to the meat-grinder of neoliberal economics. Reforming these institutions and changing the methodologies of both the Treasury, the Bank of England and the OBR are issues McDonnell and his co-thinkers have been engaged with for years. They long ago moved out of the world of hit and hope.

Despite all this, the Green New Deal proposal – which links massive redistribution and social infrastructure building with the decarbonisation of the economy – is a landmark in the politics of this century. It is a bold plan for the re-humanisation of the economy; it contains a coherent narrative about what to do (if not yet how to pay for it) and it has already changed the game of Democratic Party politics.

Whether it lives or dies now depends not on how many presidential candidates sign up, nor even on the scale of popular support for it. It depends on convincing a significant chunk of corporate America, just as Roosevelt did in wartime, that the survival of their domestic market depends on it, that the benefits outweigh the costs, and that – in the process of implementing it – they and their workers can make money.