Privatized Keynesianism or conspicuous consumption? Status anxiety and the financialization of consumption in Chile

Why do people acquire consumer debt? In this article, I draw on the case of Chile and call into question the explanatory power of both the "trickle-down" and "privatized Keynesianism" hypotheses. I argue that these narratives fail to explain why, in the context of wage improvements, consumers use credit to finance "ordinary" forms of consumption that do not aim to protect lifestyles or signal status to others, but rather reflect a subtler expansion of the standard of living. Building on the idea that consumer debt is used to fill a gap between income and a socially constructed standard of living, I show that financialization might be explained by two subtler mechanisms in the case of Chile and, arguably, other developing countries: spurious upward mobility and relative deprivation. In both cases, families consume beyond their means in order to perform their class identities and meet the consumption standards to which they feel entitled. Instead of imitating the rich, consumers seek to perform their belonging to an "imaginary middle class."