Americans save too little, buy too many expensive and unnecessary things, and rationalize away their debts, says Harvard University economist Juliet B. Schor.

In her new book, The Overspent American (Basic Books), Ms. Schor finds 63% of families making $50,000 to $100,000 owe money on credit cards. Many of them claim they still cannot afford all they need, which forces them to work longer hours so they can keep up payments and buy even more things.

Ms. Schor advocates "downshifting," in which people switch to lower- paying jobs and less stressful, less acquisitive lifestyles.

In this interview last week, Ms. Schor placed heavy blame on banks for irresponsible lending habits, and envisioned a society in which debit cards replaced credit cards.

What have the reactions been to your view that the "siren call" of the "new consumerism" is irresistible?

SCHOR: A lot of readers have written to me saying, "You've described me to a tee." The reviewers are more mixed, because consumerism is a real sacred cow, and attacking it automatically generates a lot of criticism.

If you criticize consumer desire, you're a really easy target. One reviewer was very upset that I raised the issue of riding lawn mowers. For financial and environmental reasons, I suggested people in a neighborhood share them instead of each family buying its own. There is a trend toward these really big mowers, and he viewed them as an icon of American culture that should not be criticized.

So your critics say there is nothing wrong with that kind of consumption.

SCHOR: They're steeped in the classical liberal idea of the autonomous consumer doing what's best for himself or herself, and that we can't really question those choices. Even raising the issue of the choices people make gets some people very uncomfortable.

I try to give structural and analytic arguments about what is wrong with the view that there is no way to criticize choices. I do it not by saying people are making stupid choices-I don't think they are-but to analyze the structure of the system in which people are forced to make those choices.

How do you rebut that "liberal" view?

SCHOR: First, the assumption that consumers are autonomous is wrong to begin with. One of my basic premises is that what we want is very socially conditioned. The classic assumption that economists and many others make- that one person's preferences are independent of another's-is wrong. In large part, we want what we want because other people want it, too.

The second point I call the failure of collective action. It is possible we could all be doing what is in our own interest and what is optimal for each of us, but the sum total of all those individual actions yields an outcome that is socially irrational. That's a major message of the book: that the system of "keeping up" (with the Joneses) is itself irrational.

What we're really trying to do (through consumerism) is establish a relative position in society. But there are great costs when that escalates. Those costs are the time it takes us to earn the money, the environmental impact of our consumption, and so forth. And if getting more doesn't change our relative position, then we're on this treadmill, running but staying in place. Much about modern consumer life can be characterized in that way.

Finally, there is an argument I made in a previous book, The Overworked American. If people can't have free choice about the number of hours they work, then you have a system in which job hours are not flexible downward. When productivity increases you get more money rather than an opportunity to reduce your work time.

The fact that people are spending a lot of money and are consumerist can't be assumed to be a reflection of their preferences. It reflects the fact that they are offered only one option-the money rather than the time.

You state that one-third of Americans describe themselves as "heavily" or "moderately" in debt, and another third say they are slightly in debt. Did this surprise you?

SCHOR: Not particularly, given the figures coming out about credit card delinquencies. I guess the third who were heavily in debt surprised me.

I was surprised about the level of denial people have about their credit cards. In my own survey, people repeatedly cited debt as an obstacle to doing things that they would prefer to do-for example, cutting back their hours or living a simpler life. The extent to which people articulated feeling trapped was surprising to me.

I also found a lot of denial about people's general spending patterns. A lot of people really don't know where they spend their money. There is a little bit of a fog around it and also around the motivations for buying particular items.

A lot of people don't want to probe too deeply into what they're really doing. So many people say they have a sport utility vehicle because of safety, not status.

I personally have never borrowed money on a credit card. To me, it's surprising that people who have any choice about it would do it.

Do you fault the banks for extending so much credit?

SCHOR: I do. I can give you my utopian fantasy. I lived two years in the Netherlands, where there are no credit cards. People have debit cards. I think that's a better system.

I don't think that's feasible in the United States, where we have large numbers of people who live financially on the edge. But I think a better system over all would have a more equal distribution of earnings and more forced saving. People would be taught how to budget and spend. In such a world you don't need credit cards, therefore you don't get all the bad things associated with credit cards. With a lot of credit card borrowing, people are acting in ways that are not in their long-term interests.

Having only debit cards and not credit cards may be understood as paternalistic, but I believe a little bit of paternalism in public policy is sometimes O.K. There is accumulating evidence that people have difficulty controlling themselves in the area of spending. We need to face that fact and understand that the pressures on people to spend are extraordinary. Restraints on spending have been eroding for a hundred years, and now you no longer have to have income to spend.

You call banks "credit pushers," making it sound almost like a drug problem.

SCHOR: They are giving credit cards to kids in high school, kids in college, who they know are going to run up balances. Eventually, they'll pay these things off after they get jobs, but they'll end up paying huge amounts of interest.

I resent the fact that the companies have spent so much money on solicitations and so much money lobbying Congress to get the bankruptcy laws changed. They're trying to put repayments ahead of child support and alimony-I find that reprehensible. They're giving credit to people who have bad credit histories or have gone into bankruptcy before. There seem to be virtually no standards at this point for receiving credit cards. One would think that total credit availability should be linked to income or ability to repay.

What do you think of the bankruptcy legislation?

SCHOR: The current bill is bad, basically written by the companies that are holding the credit.

I believe there could be some good reforms. We need to reform both sides of this relationship, the credit-granting side and the debtor side. We need to give people more help when they get into bankruptcy.

Someone recently explained to me that when people go into bankruptcy, they can pay off some of their credit card debt and keep the cards-even while in bankruptcy-and get themselves in trouble again. The bankruptcy process itself doesn't necessarily put people on a firm financial footing. It doesn't give them a budget and a realistic means of repayment.

We should reduce the incentives for abuse, but in a positive way.

You state that the French, Germans, Japanese, and Italians save roughly three times what Americans do, and the British and Dutch more than twice. Why are we different?

SCHOR: It's something we don't understand all that well. I think credit cards, the availability of consumer credit, may be one of the factors. We are a more egalitarian society, and that has led to increased pressures for "keeping up."

But even the richest of us are feeling squeezed.

SCHOR: The pressures to keep up are particularly intense in the top 20% and the group right below them. They are more "in the game," in a sense.

The phenomenon of the $50,000 to $100,000 category taking on so much credit card debt is really interesting.

It's pretty straightforward to understand why people who are unemployed get in a lot of debt. But why people who make $100,000 a year take on as much as they do is puzzling and intriguing.

Do "downshifters" rid themselves of debt?

SCHOR: Downshifting is a voluntary lifestyle change that entails earning less money. Examples include quitting one's job, reducing the number of working hours, shifting to a lower-paying, less stressful job.

I found about a fifth of the adult population in 1991 through 1996 reported they had gone through a voluntary lifestyle change. Many who have done it have never heard of the word. Some of the downshifters I talked to had gotten caught up in these debt cycles.

Do you have other suggestions for easing the get-and-spend cycle?

SCHOR: Probably the biggest thing we could do would be to reverse the (income) inequality we have gone through in the last 20 years.

We could also use the tax system to discourage status and luxury consumption and subsidize more environmentally conscious consumption. In cars, for example, we should be taxing sport utility vehicles a lot more than smaller, fuel-efficient cars.

I want to be really careful not to come off as saying people shouldn't have this stuff. It's completely rational for people to want it. The question is really, in a larger context, whether we can step back and say, "Wait a second. Is there something wrong with this picture?"

The consumerist lifestyle has a big impact on people's well-being.

We are experiencing a lot of social and psychological problems- depression, feelings of meaninglessness, lack of community-and we need to make the connection between all of that stuff and consumerism.

Acquiring all this stuff is very expensive and time-consuming. It is undermining our ability to connect with one other and live the types of lives that ultimately give people much more meaning and happiness.

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