La Ciudad Oculta of Argentina & Conspicuous Consumption

It is October, the midpoint of southern spring, and I am in Buenos Aires for an as-yet undetermined amount of time. I’m looking for something productive to do with my time and trying to find some balance between the joys of idle travel and the need to do something productive… Something worthwhile. I have volunteered on farms before but I want to live in the city this time rather than out in the middle of nowhere. After a random internet search I find an organization called L.I.F.E. offering volunteer opportunities and I set up an appointment for an orientation and head over.

The lady answering the door in downtown Buenos Aires tells me that for forty bucks, I can volunteer for two weeks and that for sixty, I can work for up to a month. The idea of paying you volunteer is a new one for me but apparently quite the industry. The office is filled with young volunteers when I enter – one woman gives me and two others a welcome speech. Another sits behind a computer and takes my money. Three others sit at a table playing cards. A white cat lounges on the staircase of the office. Hundreds of Toms Shoes spill out of a closet in the back. The only person there who is not in their 20s or visiting from abroad is an interesting looking Argentine man with a friendly grin who tells me that he lives in a room above the office. Is he a paid employee? A permanent volunteer? The answers are not immediately clear.

Elefante Blanco2

We work at La Ciudad Oculta, The Hidden City, a slum of about 15,000 men, women, and children outside of Buenos Aires. Its official name is Barrio General Belgrano, and while here, I observed some of the worst poverty I have seen in Latin America. The neighborhood is a jumble of shacks, dirt, debris, animal and human waste, and misery strewn like an old demolition site around a towering blocks-long building known mysteriously as El Elefante Blanco, The White Elephant. Every afternoon, we crowd into a beat up old van to reach this place. Two Argentine hippies who tell me they live in tree houses on empty land near downtown occasionally come with us to play games and drums with the kids.

Little girl

Where did this slum and towering building come from? The answers, it turns out, stretch back decades. The White Elephant that towers above the slum was born when a populist president who liked flashy and expensive public works to prove the generosity and wealth of the state under his leadership poured money into a decades-old project to try and build Latin America’s largest hospital. Unfortunately a military coup left the project abandoned and the neighborhood around it degenerated into a slum. Two decades later, another leader, this time a dictator, gave the barrio sitting in the shadow of the elephant its nickname when he wrapped a wall around the neighborhood. This was done so that the poverty of the barrio would not sully the vision of visitors coming to Argentina’s 1978 World Cup, which, like the dream of the White Elephant, was yet another flashy and expensive project staged to prove the country’s modernity and wealth. More decades have since passed, but the Hidden City and the White Elephant still exist today.

Horas FelicesAside from people stealing its bricks and windows, the building has never changed and the poverty of the barrio has never improved. Why? And what was a city with such horrific poverty doing trying to first build the largest hospital in Latin America or later to host the World Cup?

The contrast between the poverty of Buenos Aires’ slums and the often ostentatious and wasteful displays of wealth from its government remind me of what I commonly see in my own community in East Austin. All around me, I see poverty on a daily basis that is coupled with extravagant displays of wealth or prestige and this behavior has always baffled and frustrated me since it seems so wasteful for people with such little resources to spend so much on flash and bling. Economists call spending designed solely to signal others conspicuous consumption and I see strong parallels between this individual behavior and the actions of developing state governments around the world.

Let me define a few things first. Conspicuous consumption, according to the 19th century economist Thorstsein Veblen, occurs when people spend money on luxury items or services to publicly display their power, prestige, or wealth —and not necessarily because they actually want those items or services for their own intrinsic utility. Rich people, the theory goes, especially the newly rich, want to make certain that everyone knows that they are rich.

elefante blanco

While I think it is certainly true that rich people buy many ridiculous things and that everyone likes to show off to some degree, contemporary economic and sociology research seems to indicate that people from wealthy backgrounds or with high socioeconomic status do not actually engage in that much conspicuous consumption. While they might have a nice car or a big house or own expensive clothing, researchers find that the wealthy often own such things because they gain utility from them and not because they wish to display power, wealth, or prestige to others. Such purchases, by definition then, do not count as conspicuous consumption. Indeed, perhaps because of a learned or taught sense of self confidence, many people in the upper middle to upper class in fact dress cheaply, buy used cars, and do not spend lavishly on luxury goods. Displaying wealth does not actually seem to be that important of a goal among many of the truly wealthy.

Instead of being a habit of the rich, recent scholarship indicates that it is actually people who either grew up in poverty or who come from a country or demographic group that is traditionally poor or historically disadvantaged who are actually the ones engaging the most in conspicuous consumption. In fact, researchers found that a typical African American family spends about 25 percent more of its income on purchases designed to signal wealth or prestige compared to comparable white families. These are the groups of people with the shoes that cost hundreds of dollars, the cars that are brand new or heavily modified, and the clothes that are always brand name, but who have houses that are falling apart and retirement or education spending that is either low or non existent. This is the face of conspicuous consumption and it is rooted in the desire of the underprivileged to prove to the world that they should not be considered poor.


In La Ciudad Oculta and similar places around the developing world, I see this same phenomenon writ large. Eager to show the world that they are modern and wealthy, the governments of developing countries spend extravagantly on often-unnecessary symbols such as the White Elephant of Buenos Aires, while too often ignoring the small and unglamorous investments that could actually lift people out of poverty. Indeed, the actions of developing countries seem to glaringly prove that their expenditures, like the flashy tire rims valued by the poor, are more about image than utility. In this regard, I find that at the same time that developing states spend billions of dollars on highly visible symbols of prestige, they often simultaneously decide to hide the reality of their true poverty rather than to spend equally large sums trying to eliminate it. Like a poor family with a broken house but a new car, these governments do this so that their poverty will not interfere with the carefully curated image they are trying to portray to the outside world. In Argentina, La Ciudad Oculta gained its wall because the road from the airport to central Buenos Aires happened to pass by its boundary. But it is not alone. In 2005, and then again in 2009, Rio de Janeiro surrounded its slums with walls. In 2012, the Philippines built a temporary wall to hide a “sprawling slum along a garbage strewn creek” from attendees of an anti poverty conference (I think the irony was unintended). Meanwhile, in 2008, Beijing erected ten-foot tall brick walls along the southern route to its Olympic Stadium, and in 2015, India built a wall to hide a slum of 700 families from an international investors conference. Examples like these are easy to find around the world. Hiding poverty behind walls, it seems, is a global practice.

At the same that these developing states build walls to hide their poor, they have a tendency to spend lavishly on the nation-state equivalent of shiny new Cadillacs and $200 Air Jordan sneakers. For example, in 1978, the same year that Argentina built the wall that christened the Hidden City, the country spent $700 million on the World Cup, a record sum and more than Spain would spend four years later when it served as host. Why is this conspicuous consumption? Because it is widely accepted that hosting world events such as the Olympics or World Cup and undertaking the mega projects that accompany them does not pay off. For example, not only did Montreal need 30 years to finally pay off its 1976 Olympic debt, but the venues it built, considered disasters by some, have become long-term financial drains long after the debt was finally paid. In fact, in 2015, Boston’s mayor explained why his city would not be competing for the 2024 Olympics by saying that he “refused to mortgage the future of the city away.”

J Volunteering

Meanwhile, back among walls encircling slums in the developing world, 170,000 people lost their homes in preparation for Rio’s World Cup and over $10 billion was spent, more than the annual budget for the entire country’s Bolsa Familia, a social welfare program designed to support 50 million people in poverty. But it does not end there. Even while the country continues to grapple with underfunded social services, extreme inequality, a huge corruption scandal, and now recession, Brazil is following the World Cup by hosting the 2016 Summer Olympics. Why? The country claims increased employment, investment, infrastructure and nationwide morale by hosting these events, but none of these claims hold up. Likewise, Beijing aggressively pursued the opportunity to host the Olympics in 2008 and spent about $40 billion to do it. What was the result? One researcher writes that the games did nothing but “accelerate the profound inequalities that have come to epitomize China’s transition to capitalism… exaggerate preexisting socio-spatial polarization [and] further disenfranchise Beijing’s new poor.”

So, again, why? While researchers report that the reality of the Beijing Olympics is a “nightmare of betrayed hopes, injustice, and despair” and that any claims of hosting leading to increased employment opportunities or tourism or economic expansion can be disproven, states still want to host because the true reason they do it is to flaunt an image of success to the world. It is their coming out party. It is a pink Cadillac with chrome rims and a subwoofer cruising down the road after leaving a broken down house. This is the logic that drove Tokyo to spend lavishly on games in 1964, Seoul in 1988, and Russia, Brazil, India, and South Africa in other years. And it is the same logic that drives lavish spending among the poor in my neighborhood. It has nothing to with economic benefit and everything to do with signaling wealth or prestige to others. And it doesn’t matter if such spending is actually detrimental to increasing the wealth that is being flaunted. Because that’s not the point.

Meanwhile, the hidden poverty behind the bling grinds on. The city stays hidden. The white elephant is never finished. Ignored by the state, the poor are visited by first world tourists paying forty dollars to play with children, take photos, and go home. The children yell and smile and jump when they see me and the other volunteers arrive. They reach out to us incessantly. They want to be touched. They want to be hugged. They want to be chased and tossed into the air and taught how to read and draw and to be loved.Little Girl 2

Around them, trash and human waste pile up in the lower levels of the unfinished hospital. The smell is sometimes overwhelming. In 2013, a court ordered the city to clean up the White Elephant but I am not sure what was done because I cannot imagine it being any worse than how I found it a year later. Inside these walls and far from the stadiums and grand public works of the city, the government funds three small soup kitchens to feed the locals. The one where I volunteered was a bare and dark room with a single sink, a fold up table, and some broken plastic chairs. Apart from these government efforts, a few organizations have set up classes and other services for the locals. Some have even built homes. The organization that I worked for seems to mean well but offers the volunteers little instruction, curriculum, or advice and short term volunteers are left providing little more than after school babysitting and some basic education for the children. Apart from these few efforts, life probably seems much the same here as it did thirty or forty year ago. Spending billions of dollars on slums like these is not a priority. No one would notice. It would not make the country seem great.





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