David McWilliam's is an Underconsumptionist Utopian

national | workers issues | opinion/analysis Wednesday October 20, 2010 16:05 by Paddy Hackett maxanger at live dot ie

Underconsumptionism is rife within the working class

"Why not freeze all mortgage payments for two years? Nobody makes any payment on their mortgage until November 2012. If we assume a conservative multiplier of only 1.4, Ireland would get € 20 bn worth of stimulus without upsetting our EU leaders rules at all."

n a piece published in The Irish Independent, 20th October 2010, David
McWilliams wrote:

"Why not freeze all mortgage payments for two years? Nobody makes any
payment on their mortgage until November 2012. If we assume a conservative
multiplier of only 1.4, Ireland would get € 20 bn worth of stimulus without
upsetting our EU leaders rules at all."

This is an absurd and utopian suggestion. There is already a de facto freeze
on mortgage payments in the form of mortgage payments failing to paid. Yet
this failure is not assisting the expansion of the Irish economy. This is
because the failure to make the payments is a symptom of the economic
crisis. Then there is the problem of many customers not willing to
participate in the freeze because they can, in a sense, afford to meet their
mortgage obligations. Then there are those borrowers who will struggle to
pay because they desire to eliminate this obligation, for a variety of
reasons, as soon as they can.

The other factor is that if a "freeze" is possible for two years then why
not have one for three or four years. Indeed why not freeze such payments
anytime the economy is facing difficulties. Then there is the question of
the bondholders. The failure to pay these bondholders would, using David's
logic, constitute a deduction from the alleged €20bn stimulus package.

David, like much of the Irish labour movement, is an underconsumptionist. He
sees a demand deficit as the cause of the economic crisis. Consequently he
mistakenly believes that if demand is increased, in one way or another, it
will lead to increased growth. But the problem is caused by the very
opposite: The overaccumulation of capital and thereby commodities, such as
houses and household goods, leads to businesses contracting or even going to
the wall and unemployment correspondingly rising. The source of the problem
is located within the process of production and not as, David and his
radical left allies mistakenly believe, in the process of circulation. David
seeks to rescue a system while the historical necessity is the overthrow of
the system.