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What Is the Main Cause of Poverty?

(last update on Feb. 23. 2023)

Conclusion: We should keep in mind that the liberal economy itself is the main cause of poverty. It should be improved through Basic Income and other means.

Because, In the liberal economy, there is competition, both among firms and among workers, and the weak and the losers in the competition tend to have lower or lost incomes, i.e., they tend to fall into poverty.
Examples of the result of such competition include unsold products, stores that go out of business, bankruptcy, job layoffs, unemployment, people failing better jobs, and people falling into low-wage labor.
I think that you can easily imagine the sufferings, because those sufferings of the unemployed during the COVID-19 disaster are fresh in our minds.
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However, this does not mean that I should completely reject a liberal economy and the competition that goes along with it.

Because it is through competition that better goods can be offered at lower prices, workers can compete for better services, and people can enjoy these services.

In a developed country such as Japan, you can find superior goods (because of competition) at reasonable prices, service workers who are well attentive. From foods to appliances, housing and utilities, and so on., people can enjoy such better goods and services. This can easily be understood by simply going to the neighborhood store or looking at what you wear or eat. This is a good aspect of the liberal economy.

Nevertheless, as mentioned earlier, competition brings with winners and losers, with the lower ranks and losers resulting in lower incomes, losses, and bankruptcies for businesses, and lower incomes and unemployment for workers.

Thus, in today's liberal economies of major countries, a situation has arisen in which some people are poor while others are rich, although goods and services are affluent in towns.

One of the measures to improve this situation is a Basic Income.

One way to remedy this situation is to introduce a Basic Income (a Basic Income is a policy in which the government provides a certain amount of benefits to each citizen), because it will ensure the basic livelihood of the less competitive while taking advantage of the benefits of competition without denying it, thereby improving the poverty problem.

Although Basic Income has some unresolved issues such as securing financial resources and international cooperation, we should not give up on introducing it just because it has problems.
Instead of thinking of reasons why it cannot be done, we should consider how it can be done and how the problems and issues can be resolved.

In conclusion, I have argued that a liberal economy creates both affluence and poverty, and that a Basic Income system should be introduced as a safety net in place of the current public assistance.