What are reasons for homelessness?

Homelessness is one characteristic of poverty, which is the result of the economic system under which the vast majority of the world operates. While capitalism has been shown to be one of the most effective forms of economic organisation for achieving efficiency and maximising the total welfare of all the people within the system, it is far from perfect.

Underpinning the microeconomic model of capitalism is the fact that individuals must have a strong incentive to work. This is true for all economic models. For example, under communism the incentive to work is that any individual who does not work will be punished by the state. In capitalism, the incentive to work is to improve one's standard of living by increasing one's financial position relative to others.

For it to be possible to increase (and decrease) one's financial position relative to others, it is necessary to have a system where there is a spectrum of haves and have-nots, ranging from the super-rich to those with no wealth at all. The extent of this range and the degree of difference between the richest and poorest in society can be defined as society's equality. Social equality is regulated by the government through income-redistribution, normally in the form of taxation.

Social equality can be measured using the Gini Coefficient.

It is generally seen that a high degree of social inequality provides stronger incentives, and therefore motivates the workforce more, whereas a higher degree of social equality is 'fairer', in that it does not make life at the bottom of the financial ladder too hard nor life at the top too decadent. People on the economic 'right' (sometimes referred to as 'conservatives') believe in independence of the markets to regulate themselves, arguing that the increased efficiency will increase the welfare of all. People on the economic 'left' (sometimes referred to as 'socialists') believe that society functions better under equality, and so argue for redistribution of wealth.

A result of social inequality is that people at the lowest end of the financial ladder have a level of wealth that is not sufficient to afford the most basic of human requirements - food and shelter. It is problematic for societies, because once an individual is in this position, it is very difficult to escape it.

Now, keep in mind, a few people do want to be homeless. They will tell you that. They like the freedom of living off of the land and not being tied to a job or the government. Years ago, that would not have been a problem.

Others are homeless because of their own bad choices. Some youth asked random homeless people why they were homeless. A former heart surgeon who was trying to get change to buy a cheap bottle of wine said it started with a few social drinks. As the stress at work increased, so did his drinking. Then one night, he was on call, and he should have refused the call when it came and begged them to find anyone else. Instead, he reported to the operating room in a very drunken state. He made a serious surgical mistake that he knew better than to make because he was intoxicated, and he lost the patient. He lost his license and was hit with a wrongful death suit which bankrupted him. After that, he just gave up and sank into the bottle even more, even without a home.

Then other people are homeless because of mental illness. They may be suffering psychosis and think everyone is out to get them, or they suffer other impairments, and thus cannot hold down a job. They might have few family and friends, so there is nobody around to get care for them, and nobody to help them apply for disability. They might only get help if they are found passed out somewhere or they are caught committing crimes. The mental health system has deteriorated as a part of budget cuts over the years. So a number of people like this are put in jail for their own protection or that of society, since there is no other place to put them. Jailors are not psychiatrists, so the patients who are held there do not get better.