Opposition to Modern Monetary Theory (MMT) tends to come from two different directions. From the one side, there are those who deny that monetarily sovereign governments have the fiscal capacity to maintain full employment and price stability. From the other side, there are some who accuse MMT of failing to account for the environmental consequences of full-employment policies. Addressing criticisms of the first type has been a major focus of earlier posts. But it is actually criticisms of the second type that would, if valid, give far greater cause for concern.
At the university I attended, a few of the academics were strongly influenced by classical political economy, especially that of Smith and Ricardo. Prior to my student days, one of them had published a paper in the Cambridge Journal of Economics entitled “On the origins of the term ‘neoclassical'” (no free link available), which is quite well known among scholars interested in the history of economic thought. In the paper, he argued that the ‘classical’ in the term ‘neoclassical’ is a misnomer and that neoclassical and classical economics actually have little in common, despite attempts by neoclassicals to claim Smith, in particular, as their forefather.