MMT has little to do with whether it is a capitalist or a socialist economy, it is simply a description of how fiat money works.

MMT: the ability of a government with currency sovereignty (not pegged to gold or other currency) to deficit spend is not bound by the taxes it collects

After WWI, many countries re-pegged to the gold standard and eventually walked into the Great Depression in 1929-33 as their fiscal space was limited by the amount of gold reserves they possessed.

In the USSR, there was a brief period of toying with returning to the gold standard during the NEP (golden chernovets), but as Solonikov (People’s Commissar of Finance) was expelled in 1926 after joining Kamenev and Zinoviev’s “new opposition”, the issuance of chernovets stopped, and ruble was decoupled from the gold standard.

Fig. 1. Average monthly volume of ruble in circulation in the USSR (in trillion). Source: Central Bank of Russia

Look at how the money supply shot up exponentially as the USSR entered the first Five-Year Plan in 1929 to finance public infrastructure projects at a scale never seen before. There is no way that they could have created so much money if they were to adhere to the gold standard.

Meanwhile, Soviet citizens paid very little taxes while getting free housing, education, healthcare and public services. The USSR recovered to its pre-war economy in just 5 years, while keeping pension and social services intact, after half of the country was laid in ruins and 27 million Soviet people perished during Nazi Germany’s invasion. There is no way they could have done that while keeping to the neoclassical (monetarist) theory, after experiencing such economic devastation.

According to MMT, a government with monetary sovereignty can spend as much as it wants and is only limited by labor, resources and technology.

Stalin at the Plenum of the Central Committee of the All-Union Communist Party of Bolsheviks, 1933:

What ensures the stability of the Soviet currency?.. Of course, not only with gold reserves. The stability of the Soviet currency is ensured, first of all, by the huge amount of commodity masses in the hands of the state, put into circulation at stable prices. Which economist can deny that such security, which occurs only in the USSR, is a more realistic guarantee of currency stability than any gold reserve? Will economists in capitalist countries ever understand that they are completely confused with the theory of the gold reserve as the “only” guarantee of currency stability?

(Note: the US eventually also went off gold in 1933 during the New Deal, re-pegged to gold during the Bretton Woods from 1944 until Nixon’s decoupling in 1971)