Japan's Growing Poverty Defies Glib Explanations

There are lots of preconceptions about poverty. On the right, a common idea is that poor people mainly have their own behavior to blame -- that if they worked more, committed less crime, had fewer out-of-wedlock births and did fewer drugs, the poverty rate would plummet. Meanwhile, many liberals blame poverty on free-market policies that have weakened unions and eliminated the corporate-welfare state.

Both of these stories sound plausible, and both may be important factors. But when I look at Japan, I see plenty of evidence that neither individual behavior nor free-market policy is the main reason for poverty. As in so many areas of economics, Japan confounds our conventional wisdom.