Conventional money is scarce because it concentrates in the hands of a few and leaves everyone else short of this indispensable means of exchange.
Entire communities — people, villages, cities, regions, companies, NGOs, public services, countries — are undermonetized. They do have wealth –competencies, resources, time, love, genius, assets, entrepreneurship skills, culture– but exchanges don’t happen. Not because of lack of wealth, but because of lack of transactional units: money. Conventional money is concentrated somewhere else, offers and needs are not fulfilled, poverty follows. This is very much like an ecosystem without enough water.
This phenomenon of wealth condensation on the one hand, and desertification on the other is called the Pareto principle. This vicious circle increases the gap between rich and poor. At least 80% of humanity lives with less than $10 a day, and almost 50% of humanity lives with less than $1 a day (source: World Bank)
Close your eyes and imagine the wisest persons you may know on Earth. Now ask them them to play a Monopoly game. If they play by the rules, no matter how wise or good these persons are individually, one will end up rich and the rest will end up poor. The Pareto effect is built into the rules of the game, and has nothing to do with the wisdom of the players. Our conventional monetary system has this same property of wealth condensation.
Taxes are meant to redistribute wealth in an equitable manner, but to date no tax strategy has ever overcome the Pareto effect. It’s just as if the Monopoly game goes on as normal except that every once and a while some of the monopolists properties are given to the poor players. All this does is slow down the general path of the game, or, if the redistribution is large enough, put someone else at the top. But the principles of condensation/desertification remain.
Fundamentally the problem is in the system itself.