Where are the Consumers? ‘Real households’ and the financialization of consumption

Markets for consumer credit experienced an explosive growth in both developed and developing countries during the last decades. In the last years, two main frameworks addressing the increasing financialization of households consolidated in the literature: an institutional approach that emphasizes the role of distributive politics in explaining the rising levels of unsecured debts, and the financialization of the everyday life that stresses the way households develop a financial culture in line with the expansion of financial markets. In this paper, I argue that such approaches rarely engage empirically with the way individuals and families actually consume personal loans, abstracting the household from its social context and making strong assumptions regarding their consumption practices and the content of debt relations. Furthermore, with an exclusive focus on Anglo-American economies, they provide few analytical tools to understand how debts and consumption intertwine in contexts not characterized by wage stagnation. Relying on in-depth interviews and credit-stories of 26 households in Chile, the paper addresses this gap by shedding light onto how ‘real households’ financialize their consumption. The qualitative analysis shows that rather than using personal loans to protect their lifestyles from income shocks, families also mobilize and combine different types of consumer debts to carry projects of social mobility, start small businesses, regulate social relations within and outside the household, and pay-off other debts. The analysis highlights three consequences for the studies of financialization: first, that consumption-driven indebtedness does not necessarily follow the dominant logic of defensive consumption assumed by most political economists. Second, that financialization shapes social relations not only by exerting disciplinary effects, but also by ratcheting up consumption standards, facilitating or impeding social mobility, and shaping personal relations and networks. And finally, rather than being a monolithic and homogeneous phenomenon, financialization from the perspective of ‘real households’ creates different financial subjects and social meanings of debts.