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Understandings of Consumerism in Chile

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ARTICLE

Understandings of Consumerism inChileRENÉ VAN BAVELUniversity of Cambridge

LUCÍA SELL-TRUJILLOLondon School of Economics

Abstract. This article explores different understandings of consumerism amongupper/upper-middle and lower income sectors in Chile. Theoretically, it relies on acultural approach to rationality and on a Habermasian system vs lifeworldinterpretation of society. Empirically, it resorts to a corpus of semi-structuredinterviews and focus groups conducted in Chile in 1998. The data suggest that thewell off rely on a neoliberal interpretation of economic behaviour and scorn the poorfor their tendency to engage in consumerism, while the poor interpret consumerismwithin their lifeworld as the only way of rising above their impoverished condition.Moreover, means of payment emerges as a relevant criterion for establishing socialdifferences in a class-conscious society where neoliberalism has become the dominantideology.

Key wordsclass consciousness ● colonization ● common sense ● conspicuous consumption ●

credit ● Latin America ● lifeworld ● neoliberalism ● poverty ● rationality

INTRODUCTIONThis article discusses two different understandings of consumerism inChile; one anchored in neoliberal ideology and the other in the reality of

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being poor in a class-conscious society. Consumerism is defined here as alevel of consumption extending beyond an individual’s immediate meansand leading to a compulsive reliance on credit (Moulian, 1997). In Chile,sustained levels of economic growth over the past 20 years have gone hand-in-hand with a rise in consumerism. Not only has it become easier toobtain credit in Chile, but, more significantly, it has become available tolower income sectors that previously had no access to it (UNDP, 1998).For these sectors of society, a real possibility exists of accessing credit andpurchasing goods that were previously unattainable.

The phenomenon of consumerism, especially among lower incomegroups, is a salient issue of economic debate in Chile. Often consumershave been able to circumvent the restrictions of the financial system andhave become heavily indebted to a number of different institutions at thesame time. Often these debtors cannot repay their loans, leading them tolose their credit rating, their possessions and sometimes their freedom. Isthis an inevitable consequence of economic growth, critics ask, or is theresomething inherently wrong with Chilean society?

Among upper and upper-middle income sectors, consumerism isviewed as the result of the ignorance and irresponsibility of people fromlower income sectors. If they knew better, it is argued, they would realizethe foolishness of their behaviour. However, the poor see it differently; forthem, consumerism is a way out of poverty. At the core of this alternativeunderstanding of consumerism lies a deeply-rooted class consciousness, asalient characteristic of Chilean society. Consumption in Chile, as else-where, is a vehicle for gaining higher social status. However, for the welloff, issues such as means of payment or reasons for purchase becomerelevant markers of difference. Social status does not result merely frombeing able to consume, but rather from knowing how to consume.

THEORETICAL ASSUMPTIONSIn seeking to describe the different understandings of consumerism inChile, this article builds on two theoretical assumptions. The first of theseis a cultural approach to economic behaviour. Specifically, it rejects thenotion that humans act rationally – a rather intuitive assumption which isnevertheless supported by a series of empirical studies (for a good overview,see Lea et al., 1987). Moreover, it does not approach actual, observedeconomic behaviour as some sort of deviation from rational ideals, as inthe tradition of Simon’s (1986) bounded rationality or Tversky andKahneman’s (1974) biases and heuristics.

On the contrary, it understands ‘rationality’ as a creation, a fiction

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trickled down from economic theory. The point of departure for this asser-tion is provided by Etzioni (1986), who, borrowing terminology from thehard sciences, argues that rationality is not entropic (i.e. natural); rather,what is entropic is non-rational behaviour. For this behaviour to becomerational, forces need to pull it in that direction. This implies a detachmentfrom the normative behavioural model whereby rationality is seen as theOlympian ideal. Instead, rational behaviour is seen as an option, an alterna-tive for action, which people can – to varying degrees – adhere to. Itfollows, therefore, that there are other, often competing and not necessarilyinferior,ways of thinking about the economy and economic matters besidesthe rational alternative.

To understand the assumption of rationality as fiction is not to implythat economic actors do not make efforts to behave rationally. However,their efforts are rational in a procedural sense, the outcome of which will notnecessarily correspond to utility-maximizing ideals (for discussions onrationality as a process and a product of thought, see Lea, 1994; Simon,1978). Economic behaviour that does not conform to the expectations ofrational choice theory may be conforming to another system of logic,another ‘rationality’, informed by alternative cultural beliefs. It is not merelythe case that behaviour is being guided by a different set of cultural values,for this holds the door open for an economistic framework where valuesare transformed into variables; rather, it is a case of resorting to an entirelydifferent toolkit for establishing what constitutes appropriate economicaction (Swindler, 1986).

In this vein, it can be argued that, while people do not act rationally,they do act sensibly. Acting sensibly means acting according to commonsense, to what people generally agree is the best way forward. Commonsense is necessarily common (i.e. agreed upon) to members of a social groupor milieu. The thinking process involved in acting sensibly with regard toeconomic matters may not resemble an economistic logic, but it is the waythat other members of a group think. Sensible action is not measured interms of its logical properties, but rather in terms of its pragmatism fordealing with the challenges faced within a particular lifeworld (Habermas,1984). Consequently, the outcome of sensible action might not be in agree-ment with the utility-maximizing ideal of homo economicus, although itmight constitute the best possible alternative as agreed by peers and associ-ates within a particular social group.What constitutes sensible action, there-fore, is action that is in agreement with the laws imposed upon all sensiblebeings in a social group (Durkheim, 1925). People are therefore sensible byvirtue of being social (Mead, 1962).

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The second theoretical assumption on which this article builds is aHabermasian interpretation of society, in particular the notions of systemand lifeworld and the colonization of the latter by the former. Habermas(1987) introduces these notions as two ways of conceiving society, borrow-ing the concept of the lifeworld from the phenomenology of Husserl. Forhim, the lifeworld is the site where, in terms of communicative action,speaker and hearer meet and are able to reach an understanding. It is thehorizon within which communicative actions are ‘always already’ movingand consists of a stock of interpretative patterns that is culturally transmittedand linguistically organized.

However, in modern societies, economic and bureaucratic spheresemerge from the lifeworld and are characterized by the regulation of socialrelations through money and power, respectively. According to such aninterpretation, the market economy constitutes a subsystem, detached fromthe lifeworld, where social integration takes place. This subsystem growsand emerges, reaching a point of detachment where it can turn back andhave a destructive impact on the lifeworld. At this stage, social relationsbecome dependent on money as a medium, rather than communicativeaction. This process may continue and reach a stage where all forms ofsocial integration are suppressed, including those where communicationand understanding are vital for coordinating action. The lifeworld cannotcontinue to exist under such circumstances and ends up being ‘colonized’by the economic subsystem (Habermas, 1987).

In the case of Chile, a country that has been subject to the drastic impo-sition of the neoliberal paradigm, a Habermasian interpretation is especiallypoignant. Pinochet’s military regime initiated a series of free marketeconomic reforms soon after overthrowing Allende in 1973.The economistsin charge of these reforms were the so-called ‘Chicago Boys’, who studiedin the same department at the University of Chicago from which MiltonFriedman launched his neoliberal revolution. Against a Keynesian tradition,Friedman advocated a diminished role of the state in the economy andgreater overall freedom in order for the laws of supply and demand to estab-lish equilibrium in all markets. He also played a key role in Chile’s economicreforms, which provided him with a pristine setting for his neoliberal ideasto be implemented. Indeed, the neoliberal experience in Chile is often seenas Friedman’s own experiment (Rayack, 1987). With the military govern-ment firmly in power, there was no room for political opposition, and freemarket reforms were swiftly executed. Today, neoliberalism pervades everycorner of social life, effectively colonizing it. What are the implications, interms of consumerism and its corresponding rationale, of this colonization?


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THE RESEARCH METHODOLOGYThe empirical work on which this article is based is part of a larger pieceof qualitative research on economic knowledge and rationality undertakenin Chile in 1998 (van Bavel, 2000). It triangulated between differentmethods of data collection and analysis: semi-structured interviews, focusgroup discussions and content analysis of the media (see Flick, 1992).However, given its aim of exploring different understandings ofconsumerism among different social sectors in Chile, this article only usesthe material from the interviews and focus groups. The media, as a sourceof formalized communication (Bauer and Gaskell, 1999), is not represen-tative of the opinions and representations of marginal groups in Chile, and,as such, its analysis can only make a limited contribution to this article.

The research sought to tap into the beliefs of a wide range of Chileans,male and female, from different social backgrounds and with varyingdegrees of formal education in economic matters. Interview respondentswere recruited from three broad taxonomic groups: experts in economics,upper/upper-middle income sectors and lower income sectors. The focusgroups, on the other hand, were representative of a number of significantmilieus in Chilean society: extreme poverty, rural workers, industrialworkers, old age pensioners, salesmen, professionals and economists.

In total, 22 interviews and seven focus groups were conducted. Theytook place in a relaxed informal setting and were tape recorded. They lastedfrom 45 to 120 minutes. A topic guide for the interviews was developedfrom six initial unstructured pilot interviews. In the focus groups, whichwere conducted after the interviews, the number of topics was significantlyreduced in order to allow for greater discussion and interaction betweenthe participants. As with the interviews, the focus groups followed a semi-structured format, allowing for differences in terminology and in thesequence of topics depending on the backgrounds and interests of partici-pants and the flow of the conversation.

All interviews and focus groups were transcribed verbatim and codifiedusing Atlas/ti software. The resulting corpus of text was then systematicallyapproached in order to uncover pieces of conversation that illustratedpeople’s understanding of consumerism (among other economic issues). Allpassages of text that were considered relevant to the investigation wereassigned a particular code, capturing a certain idea or notion.

The quotations in the empirical section of this article, althoughpertaining to an individual or focus group, are presented as illustrative of aparticular code. Thus, they are not isolated utterances; rather, they repre-sent more widely-held ideas and opinions shared by other participants. A


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list of all codes, and of their prevalence in the corpus of data collected, isincluded in the original investigation (van Bavel, 2000). However, estab-lishing the degree to which these ideas are shared in society at large liesbeyond the scope of a qualitative investigation such as this one.

A NEOLIBERAL UNDERSTANDING OF CONSUMERISMFrom the perspective of the relatively well off in Chile (i.e. the upper andupper-middle income sectors), poor people’s excessive reliance on creditconstitutes a departure from normatively-held notions of rationality.Rationality dictates that, if people had access to perfect information, if theyhad the ability to undertake all relevant computations and if their willpowerwas not bounded, then surely they would do better to save before purchas-ing an item rather than taking out a loan at exorbitant rates of interest,which they will often be unable to repay. Essentially, the reason why peopleengage in debt is because they are only too human, subject to a host ofimperfections that do not apply to the learned homo economicus. Such aninterpretation takes on a particularly discriminatory tone by focusing on aspecific group of people (the poor) and becoming another marker of socialdifference.

‘It’s because of lack of knowledge’The well off attribute poor people’s shortcomings in rational behaviour totheir ignorance, not to biases and heuristics that are potentially applicableto everyone. The underlying assumption is that the poor purchase on creditbecause they don’t know any better. This condition is particular to the poor,as a sector of society, and makes them particularly prone to consumerism.It also makes them prey to lending institutions (so-called financieras), whoare seen to capitalize on the poor’s lack of education: ‘Given the ignoranceof not knowing how to work out the interest rate and worrying only aboutmonthly instalments, [the financieras] have managed to grow’ (U).1 Theunderlying assumption among well off respondents is that, if people knewbetter, then the dichotomy between emotional and rational behaviourwould be resolved in favour of the latter. It is lack of knowledge, there-fore, that makes them surrender to their impulses and get into debt: ‘[Thepoor] don’t know what happens. It’s because of lack of knowledge. If theyhad knowledge, I assure you many of them would act differently’ (U).

Some respondents from the upper/upper-middle income sectorpointed out that people with the highest level of education were the oneswho got least into debt. Regardless of whether access to education mayplay a part, a relation of causality is assumed: education is the key. If lower


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income groups were more educated, they would be aware of the conse-quences of credit and would act responsibly towards it: ‘If you went toschool for 12 years and learned mathematics, how can’t you work out thatasking for a loan is absurd?’ (U). ‘And what’s happening here, what’s goingon is that the difference is not so much between rich and poor, but betweeneducated and not educated’ (U).

What emerges from the above quotes is the apparent equivalence ofeducation and rationality; that is, there appears to be ‘one best way’ ofbehaving towards credit, and that way is dictated by economic theory. Theexistence of other rationalities, informed by extraeconomic discourses, isnot taken into consideration. Not behaving according to those parameters,therefore, is equated with ignorance and is therefore attributed to lack ofeducation. If people knew better, if they were properly educated, then theywould be able to approximate the rational ideal, the behaviour of homoeconomicus.

‘That stuff is superfluous’But, aside from scorning the poor for their inability to calculate purchaseson credit correctly, the well off scorn them for wanting to own consumerdurables. There seems to be a set of values that dictates that certain goodsshould not be accessed by the poor. Thus, the poor’s possessions are ill-gotten gains. The canons for acceptable consumptive behaviour indicatethat material goods have an inherent ranking according to the level ofnecessity of the consumer. Ironically, it is the well off (who have less needs)who establish this ranking. Moreover, the fact that some people have beenunable to keep up their payments – suffering dire consequences as a result– is further motive for concern. Again, lower income groups are seen asirresponsible (irrational, essentially) for indulging in consumerism:

It’s so sad . . . people who get kicked out of their houses becausethey don’t pay their instalments, and they take out the 25-inchTV set, the video equipment, the stereo equipment, the jacuzzi,all that stuff, that stuff is superfluous, and those guys have beenduped there. (U)

The fact that lower income groups are purchasing superfluous goods is akey issue. Since lower income sectors often lack the most basic necessities,the well off consider them irrational for getting into debt in order topurchase consumer durables. They feel that the poor should be spendingtheir money in other, presumably more important, things: ‘When I was astudent I worked in the shanty towns, in Cerro Navia, and I would go into


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houses that were falling apart and they had a 21-inch TV there . . . andtheir houses falling apart’ (U).

I tell you, because I once lived with people who were of lowerextremes, people of . . .

Extreme poverty.Yeah, of extreme poverty . . .Poor people.And they weren’t without their stereo equipment, nor without

their colour TV.Nor the remote control.And I’m talking about floors with just boards, or without a floor

at all, but with a colour TV and a stereo. (U)2

‘There would need to be a reason’Since buying on credit is more expensive than paying cash, the well offneed a reason, a particular logic, resonating with the dictates of ‘rational’behaviour, that justifies such behaviour; that is, the logic underlyingconsumption on credit should resemble the rationality of homo econom-icus. Through some economic construct or another, the end result of anypurchase on credit must appear to be maximizing some utility function:

If I bought a pickup now, I would do it either because my dad islosing VAT on his side, and then I’d buy it off him, but I’d haveto buy it on credit because he needs to demonstrate to thedealer that . . . I mean, there would need to be a reason forbuying on credit. (U)

In the face of Chile’s unforgiving neoliberal economic system, to followthe dictates of economic rationality is to cope well with the imperatives ofthe market.What emerges is the rationality of the businessman,who under-stands the workings of the economic system and who knows how best toact within it:

That’s the only reason why I would get into debt, to buy realestate . . . because I’m increasing my capital resources. I’d havesomething stable, solid, tangible. I’m not interested in gettinginto debt for a car or a TV set or a stereo equipment. I thinkthat’s stupid. (U)

In sum, for the well off and educated sector of Chilean society,consumerism is frowned upon. Acquiring material possessions needs to be


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consistent with a sound rational assessment. Along these lines, there needsto be a good reason, in accordance with the logic of homo economicus,in order to get into debt. As lower income sectors often flout this pre-requisite, they are deemed ignorant and further looked down upon. Notonly do material possessions (or lack thereof) mark social differences, sodoes the means of payment.

CONSUMERISM IN THE LIFEWORLD OF THE POOREconomic behaviour is the result of a particular common sense that corre-sponds to a given culture and that is functional in a given context. Attemptsat understanding the content and structure of this common sense thereforerequire, in the first instance, an understanding of the lifeworld where it isaccepted as common (see Schutz and Luckmann, 1973). In Chile, whilebeing poor is not synonymous with being in debt, it is the case that themotivation and rationale behind engaging in consumerism stem from thefeelings of discrimination and social pressure associated with being poor.Therefore, a description of the lifeworld of the poor helps set the scene foran alternative understanding of consumerism.

Despite its significant recent economic progress, as witnessed byimpressive macroeconomic indicators, Chile remains a country with highlevels of poverty (Martínez and Díaz, 1996; Toloza and Lahera, 1998;UNDP, 1998). As proof of this assertion, respondents in the study oftenstated that ‘there are still people living by the side of the river’. The riverin question is the Mapocho, on whose banks lie a number of shanty towns(campamentos). By definition, people in these shanty towns are consideredto be living in extreme poverty:

Shanty towns are the people who don’t have housing . . .Exactly.. . . and that is extreme poverty.Yes.The person who has a house, that’s no longer extreme poverty. (L)

People in these shanty towns are in a difficult geographical location. Notonly are they subject to the dangers of the Mapocho overflowing its banks(which happens every five years or so), but they are living on land that ishighly valued. The city of Santiago has grown towards the east, and LoBarnechea, the borough where many of these shanty towns are located, hasbecome quite fashionable and expensive. Shanty towns are thus beingsurrounded by expensive housing, and pressure is mounting for people tomove out. Social exclusion takes on a physical dimension here, as people


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in the shanty towns feel the rich are eating away at a space that is theirs (asthey were there first), effectively kicking them out:

They started taking our . . . our space like that, they startedsurrounding us and they started . . . and we stayed in the middle,and they want to get us out of here too. They don’t want us tostay here in this space. (L)

One of the many problems that people in shanty towns have to faceis the abundance of drug and alcohol misuse, often mentioned byexternal observers as a cause of poverty. The argument is that the poorindulge in alcohol and drugs to a great extent and are thus lazy and lacka certain work ethic to overcome their impoverished condition. Peoplein the shanty towns are aware of this stigma and allude to it when talkingabout their situation. Here, however, the order of causality is inverted,and drugs and alcohol are seen as a consequence rather than a cause ofpoverty:

But that is because of your life, because, imagine: there arehusbands who . . . not because they are lazy, they go out lookingfor jobs, they can’t find a job, and the same desperation of nothaving for their children, for their wives, leads them toalcoholism and drugs. (L)

People in extreme poverty feel that there is no way for them to overcometheir situation. Either because of discrimination or lack of resources, thefact remains that access to the economy and to Chilean social life is denied.This aspect is particularly salient in the face of Chile’s recent economicprogress, since it appears that certain sectors of the population are enjoyingunprecedented progress. However, the poor do not share this feeling ofprosperity; they do not feel a part of a successful country, but rather remainat the margins of the economy and society:

You are never going to rise.3 Why? Because you don’t have themeans to . . .

That’s it.There is no money, our children will never have the education

like the others who have money. (L)

In terms of their everyday lives, there is a pervading sense of circularity.People share the feeling that everything goes around in circles, alwaysreturning to the same point. Nothing leads to anything in a progressivelinear fashion, nor does the situation ever change:


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So you receive the money, you have to finish paying [yourdebts], and with what you have left over, the small change youhave left over, you come around again, and it’s back to get intodebt again for the next month doing the same routine. (L)

The image of poverty as a swamp is very salient in poor people’sdiscourse. There is a literal aspect to this, as the roads in the shanty townare not paved and turn to mud in the winter. Metaphorical allusion to theswamp, however, highlights the feeling of being ‘stuck’ in poverty, unableto get ahead in life (to ‘rise’):

We continue living here and I think since we are stuck here in ashanty town, we see ourselves more . . . we get depressed, weourselves make us sink. Why? Because we see that we don’t rise,we’re never going to rise. (L)

However, in addition to enduring the hardships of material poverty, thepoor must face a society that looks down upon them and discriminatesagainst them. This not only excludes them from the economy, as it limitstheir entry into the labour market, but it also excludes them from Chileansocial life:

Just because we are small, just because we are black, just becausewe are . . . go around with some clothes that, even thoughthey are clean, but . . . I mean that just because we live in ashanty town . . .

There is a lot of discrimination.Exactly. (L)

‘You are looked down upon’Belonging to lower income groups in Chile has implications that go farbeyond material impoverishment. People tend to be very aware of theirsocial position, which is established with reference to other sectors ofsociety. This awareness is actively reworked and refined in order to ensurethat, even though they might be looked down upon by certain sectors ofsociety, they in turn will be in a position to feel superior to others. Thepoor lie at the bottom of this scale and are therefore recipients of suchexpressions of superiority by others. It follows that, as a sector of society,the poor are stigmatized. Moreover, everyone, including those belonging tolower income groups, will actively try to establish a distance from ‘the poor’(as a category), avoiding at all costs being associated with a group thatreceives little, if any, respect from the rest of society. An exploration of


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conversations among Chileans from upper/upper-middle and lowerincome sectors sheds light on what people think about poverty, which inturn shapes the perception that the poor have of themselves and their socialpositioning.

For many, poverty is accepted as natural. In this way, any feelings ofguilt or responsibility towards the poor are brushed aside. It was common,for example, for respondents in the study to claim that poverty had alwaysexisted since biblical times. The use of metaphors helped paint a picture ofpoverty as an illness or a plague – ugly and disturbing, but natural:

The problem is that poverty is like leprosy . . . the whole worldhas had that leprosy.

Since the days of Jesus Christ. (U)

Aside from this historical justification, people resorted to more contem-porary explanations. Not only is poverty ‘natural’ because it has alwaysexisted, but it is also inevitable due to the way that society is structured:somebody will always be at the top and somebody will always be at thebottom:

There’s always been poor people.Somebody has to do the dirty work . . . somebody has to be the

employee.Someone’s got to wash the dishes around here. (U)

If all the right conditions were given, if there was a certainamount of jobs, equal education for everyone . . . there wouldstill be a group that would be poor. (U)

Having established that the category ‘poor’ is natural, the next questionis whether there is a particular type of person who will fit in that category.This is where the construction of ‘the poor’ as a stigmatized group emerges.This group of people is presumed to have a certain set of values thatcondemns them to be poor. They either lack the willpower, the disciplineor the work ethic to successfully commit to a job and overcome theirimpoverished condition. To a large extent, therefore, their complaints arefelt to be unfounded:

Now, you’ve got the poor who doesn’t like to have a boss. Hedoesn’t like to be told what to do . . . he is independent, heworks alone.

Or that ‘I work too much and earn too little’.Sure.


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And he’s been working for a week.And he misses work on Monday to get fired.And ‘when I used to beg in the streets, I would earn double of

what I earn now’.Sure.Sure . . .‘And I didn’t get bossed around.’ (U)

I mean, the extreme poverty, poverty in itself, as long as peopledon’t have the spirit to overcome, it will not be overcome. (L)

In light of the stigma attached to being poor, it is hardly surprising thatpeople wish to avoid being classified as such. They will go to great painsin order to distance themselves from that sneered-upon group, either bystressing that they are middle class or by constructing a new taxonomy ofsocial classes:

[I am] uh . . . middle. Middle . . . well, they say that there ismiddle-lower, middle-upper, right? I would say that . . . howcould I define it . . . middle-middle. Middle . . . not high norlow, I mean, middle . . . for the common Chilean. A level inwhich most of us are, I think, right? Middle-middle, I mean . . .I don’t know how to define it. A level that is not low nor high,but that is in the middle of Chileans, the middle, themiddle-middle, the classic middle. (U)

Then we have the poor, but of a class, as they are called currently,‘poor/middle class’.We are individuals who enjoy living in theworld, but we also like to be people . . . cultivating our culture,elevating our social movements, studying, conducting seminars, allof that, in order to go rising, escalating. (L)

It follows that class consciousness, which pervades every corner of Chileansocial life, is also manifest in the lifeworld of those living in poverty.Distinctions of class are very much present among poor people in Chile,perhaps even to a larger degree than in other social sectors. What emergesis a situation whereby people from lower income sectors mark differencesamong each other in an effort to avoid being subjected to the stigma ofpoverty:

I think it’s because of the ‘what-will-they-say?’. Nobody dares towork in just anything. A kid who is a driver . . . he’s a driver andthen he cannot work as, for example, a gardener, because it is less


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than being a driver. So that’s what happens to us, in the . . . inthe social class of the poor. (L)

At school . . . if you want to have lunch, they give you avoucher. So I say [to my daughter],‘take the voucher, go havelunch for free’. And she says,‘but then the others start saying,you are poor because you are having lunch’. (L)

In attempting to avoid being classified as poor, material possessions playa key role. Dittmar (1992) documents the symbolic value of material posses-sions as a medium of expression. In the context of class consciousness inChile, people indulge in conspicuous consumption in order to earn respectand to cultivate a sense of identity and self-esteem (Veblen, 1899). It islargely a matter of conforming to the pressures imposed by a highly class-conscious society, which people ignore at their peril: ‘If you are not partof the fashion or you don’t wear what is in fashion, you are looked downupon. So you have no choice’ (L).

It’s that need for appearance, that need of ‘how are you going tosend your kids to school without the fashionable shoes thatthey are using on TV now?’ . . .

They are going to be segregated for going around like that. (U)

Among lower income groups in Chile, consumer goods convey, quitesimply, that the owner is not poor. Having access to items such as colourtelevisions and stereo equipment surely is a step in the direction towardsalleviating some of the stigma of being poor. However, despite theirefforts, people from lower income sectors will never be able to achievewhat they want, as there will always be a richer, more powerful groupsetting the pace:

They cannot reach it, and they will never reach it. They willnever have an option, because the system is ‘more’. The one whohas just looks ahead, he won’t look down. And the one who isdown will look with contempt at the ones above. (L)

‘It’s difficult to save’The fact that these social pressures exist should not necessarily lead toconsumerism; after all, it is only expected that people’s wants and needs willexceed their income, as this constitutes the basic principle on which econ-omics, the science of allocating scarce resources to competing ends, is built.However, a key consideration is whether people have the capacity to save.


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If people can afford to put some money aside at the end of the month,then they will be better equipped to cope with the pressures of a class-conscious society. However, the reality among lower income groups is thatwages are low and necessities many. Putting money aside at the end of themonth, therefore, is considered simply impossible:

You don’t save, you can’t save. And if you do save, you save forone day, for one day you can keep that. And the next day . . .you’ve got to buy this, you’ve got to buy that. . . . The savings ofone day are gone the next. (L)

And to save up the money is not possible. . . . In a house, wherethere are children, no, it’s not possible. (L)

The inability to save is key for understanding consumerism. Peoplewithout the capacity to save engage in consumerism because credit emergesas the only alternative. They simply do not have the option of putting somemoney aside at the end of the month and therefore cannot afford topurchase goods in one transaction: ‘People ask for credit . . . because that’syour way of buying things. Because you’ll never have such a high salary tobe able to just go and buy, say, a refrigerator. So you have to get it by instal-ments’ (L). However, if people can afford to pay their instalments everymonth, why don’t they save that amount every month and make theirpurchase in a single transaction? Admittedly, they would have to wait beforeowning the intended item,but it would certainly be more affordable. Again,the impossibility of saving emerges as the key consideration. The monthlyinstalments are seen as an obligation, an imposition from outside, whichneeds to be complied with. In a way, credit is a way of ‘forcing’ people tosave: ‘It’s very difficult to save, there’s never anything left in order to save.So with the instalment you like . . . it’s like something you have to pay. It’sjust like the electricity bill, like the water bill’ (L). ‘It’s difficult to save.Why?Because with saving you go . . . you don’t impose it on yourself, but onthe other hand with debt . . . if I bought an object, then I must have themoney to pay for it’ (L).

Contrary to what the middle and high income groups believe, indebtedpeople know that goods bought on credit are more expensive, but, since itis their only option, they indulge nonetheless: ‘We always buy on credit. . . .Sure, you could save up the money and buy cash, it’s cheaper, but it’s almostimpossible. You’d have to be very economical’ (L).

I could not do that . . . go and pay, say, 120, 130, whatever the TVcosts, cash. Instead, if I pay for it in instalments, yes.


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You end up paying a little bit more . . .A little bit more, but you have the chance to pay little by little . . .And to buy it . . .And to buy it.And buy it, and have it.. . . and enjoy it. (L)

It follows that the main concern for people making purchases on credit isthe amount of the monthly instalment. People know that, if they can meetthat instalment every month, they will – eventually – own what they want:‘Because, for example . . . OK . . . a TV set costs 300. And you know youcan pay that instalment, otherwise you don’t take it out’ (L).4 ‘Only in theinstalments! For example, an artefact that costs 100 thousand pesos, I divideinto five. I say 2, 4, 6, 8, 10. Five instalments, nothing else. I don’t look atpercentages, no’ (L).

In light of the pervading feelings of class consciousness in Chile,consumption is understood as a way out, a way of gaining respect.Moreover, consumer goods grant access to Chile’s recent economicdevelopment, a story of success which they, too, wish to be part of. And,given that people do not have enough money to save, they rely on credit.Consumption on credit therefore appears to be a personal way of bridgingthe gap between rich and poor, their personal way of making up for theinequalities perpetuated by the neoliberal economic model. Credit does notonly allow people to enjoy consumer goods, it allows them to believe thatthey are overcoming poverty: ‘In order to rise, you have to get into debt’(L). ‘People rely on [credit] because it’s the only alternative in order to rise,in order to have a little more’ (L).

It remains true that credit is a widespread phenomenon in Chile andit is largely due to a particular common sense notion that understands creditas a solution, as the only way of ever acquiring anything. Here, getting intodebt is the sensible thing to do. Given the symbolic value of material posses-sions and their role in conferring identity, cultivating self-esteem and estab-lishing social differences in a class-conscious society, credit emerges as theonly alternative for purchasing goods. Any other consideration is not reallypertinent to the context and to the problem at hand.

CONCLUSIONChile’s rapid economic transition in the 1970s saw it swing from socialismunder Allende to a strict free market economy under Pinochet. This freemarket economy has opened the floodgates and allowed systemic


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imperatives to seep into every corner of social life and colonize it. Neo-liberalism is hegemonic; it is seen as the way forward in a country that seesitself as growing and advancing on the road to development, and opposingviews are swiftly dismissed. As a consequence, to understand the workingsof the economy is to understand what is happening in the world (‘master-ing all the variables’, according to one expert), and to know how to operatewithin the demands imposed by the free market is to be smart and astute.

The implications of this neoliberal colonization on or for consumerismand its corresponding rationale are that economic ‘rationality’ is taken as anOlympian ideal,while other sensible alternatives are not taken into account.To be ‘rational’, in strict economic terms (that is, to emulate the thoughtprocess of homo economicus), is to be educated. Upper and upper-middleincome sectors rely on a neoliberal understanding of the world in order todetermine what is right and proper. According to this view, credit isjustified if there is a good reason for it (i.e. if it conforms to the prescrip-tions dictated by economic rationality).

The tensions between system and lifeworld become apparent whenlooking at different understandings of consumerism in Chile. The well off,adhering to a systemic mode of thought, disapprove of the poor’s indul-gence in consumerism and see them as powerless victims of the market,due in great part to their lack of education. The poor, they claim, do notknow how to act within the economy and therefore are simply out of touchwith the emerging nation that is Chile. In a society dominated by thesystemic imperatives of the neoliberal model, the well off are able tomaintain their distance over the poor, believing their behaviour to be theoutcome of greater education, while, by contrast, the poor squelch in theswamp of ignorance and blindness. The diagnosis: further education forthe poor in the form of economic training. This implied equivalencebetween education and neoliberal prescriptions, following a Habermasianinterpretation, paves the way for the further colonization of the lifeworldby the system, ultimately threatening its existence.

While such a bleak prospect appears to be supported by the poor’sdesire to take part in Chile’s economic development through consumerism,the fact remains that systemic thinking has not pervaded their lifeworld.They continue to resort to a logic of their own, resulting from a history ofpoverty and class struggle. In their lifeworld, not to be poor is the mainaspiration, superseding any other considerations (such as being ‘rational’).For the poor, to escape poverty is to change their life completely. In materialterms, it is to satisfy their immediate wants and needs. In social terms, it isto no longer have to be the recipient of disparaging remarks and to be part


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of the Chilean success story. Their indulgence in consumerism can there-fore be explained as the result of wanting to rise above their impoverishedcondition (fostered by high levels of class consciousness in Chile) and theirparticular sensibility with regard to economic matters (based on the realityof simply not being able to save). It is the outcome of not wanting to bepoor, while being poor.

Thus, while the colonized continue to think in neoliberal terms, thepoor adhere to a logic of their own. They act sensibly within their life-world. They too think rationally, albeit in a procedural sense; that is, they willthink matters through, but will arrive at outcomes that, although not‘rational’ in an economistic sense, might be sensible to them. Their actionwill correspond to different modes of economic thinking, which are func-tional in different milieus (van Bavel and Licata, 2002).

Consumerism represents, on the one hand, the means to be part ofChile’s new economic development, a way of gaining access to the materialpossessions that are seen as markers of success. On the other hand,consumerism is understood, by colonized economic actors, as the behav-iour that marks the difference between the enlightened rational thinkersand the rest. For them, material possessions are not relevant social markers;rather, it is notions of rationality that are deployed in order to mark socialdifferences. There remains, as ever, an appropriate etiquette for behaviour,perpetuating distinctions of social class. Whereas the poor engage inconspicuous consumption in an attempt to bridge the gap between richand poor (to ‘rise’, according to them), the real social marker has becomethe means of payment. It is a new weapon in the battle for social position-ing, endorsed by a neoliberal understanding of the world that has colon-ized social life to the degree that alternative explanations of economicbehaviour hold little, if any, worth.

Notes1. U denotes upper or upper-middle income sector and L denotes lower income

sector.2. Comments in the form of dialogue come from different focus group participants.3. People use the term ‘rising’ (surgir) to mean ‘getting ahead in life’, specifically in the

context of poverty.4. People talk of ‘getting’ or ‘taking out’ (sacar) goods on credit.

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René van Bavel is lecturer in Social Psychology in the Faculty of Social and Political Sciences atthe University of Cambridge. His research interests include economic psychology, risk, socialrepresentations, the social psychology of new technology, Latin America and qualitative


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methodology. Recent publications include: ‘Une approche théorique des représentationssociales de l’économie’, in Les représentations sociales: Balisage du domaine d’études (with L.Licata; Editions Nouvelles, 2002). Address: Faculty of Social and Political Sciences, CambridgeUniversity, Free School Lane, Cambridge CB2 3RQ, UK. [email: [email protected]]

Lucía Sell-Trujillo is now Researcher at the UK’s Department of Trade and Industry. Herresearch interests include the instrumentalization of acquaintances, social capital, networking,employment relations, representations of childhood and qualitative methodology. Recentpublications include: ‘Fair Pay and Pay Determination’, in Choice and Public Policy: The Limitsto Welfare Markets (with J. Dickinson; Macmillan, 1998). Address: Employment MarketAnalysis Research, Department of Trade and Industry, 1 Victoria Street, London SW1H 0ET, UK.[email: [email protected]]


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