Mises Daily: Tuesday, April 12, 2011 by Wendy McElroy
The headlines scream, "Is this Baby in Danger Due to Hoarding Grandma?";
"The Horrors of Hoarding"; and "Animal 'Hoarding' Often Tied to Mental
Illness." Meanwhile, a popular TV series entitled Hoarders focuses upon people
whose "inability to part with their belongings is so out of control that they are on
the verge of a personal crisis"; like drug addicts, they require an intervention.
The vilification of hoarders as mentally ill, child-endangering animal
abusers is in full swing.
What is this vile and dangerous thing called hoarding? The noun "hoard" is
defined as "a store of money or valued objects, typically one that is secret or
carefully guarded." The verb means to "save up as for future use." In common
usage, anyone who stores more of a good than their neighbors do is often
viewed as a "hoarder."
A common example of hoarding is stocking up on durable grocery items — such
as canned goods, rice, or pasta — when they are on sale, so that your family has
a year's supply of staples in the house. In rural areas, this is known as "keeping a
Historically, governments have frowned upon hoarding. Especially in bad
economic times, stigmatizing the hoarder for "causing" high prices or shortages
because he buys more than his "share" serves a useful political purpose. They
divert attention away from government policies, such as tariffs, that are the true
cause of empty shelves and high prices. By stirring up resentment toward
neighbors who own one more can of peas than you do, politicians avoid the full
and just brunt of public anger.
In times of economic crisis, when governments flirt with rationing and price
controls, the frown can turn into a scowl; laws against hoarding are then passed
and goods are sometimes confiscated. The most notorious confiscation in
America came in 1933 when President Franklin D. Roosevelt signed Executive
Order 6102, ostensibly as a measure to combat the Great Depression. The order
commanded the American people (with a few exceptions) to relinquish all but a
still-permitted $100 worth of gold coins, bullion, and certificates to the Federal
Reserve in exchange for a payment of $20.67 per troy ounce. Less than a year
later, the government raised the trade rate to $35 per troy ounce. Thus, the
government reaped huge profits at the expense of private investors and savers —
a.k.a. hoarders of gold.
Hoarding, like any other human activity, can become obsessive. But in its
common form, hoarding is nothing more than preparing for the future by laying
aside a store of items you and your family may need. This is an especially
valuable practice during economic instability, when necessary supplies can
become scarce or suddenly double in price.
The Austrian investment counselor Jack Pugsley once explained another
perspective on hoarding: it is an investment. A low-income family may not be
able to afford precious metals, but they can afford to invest in dry or canned
consumables. Last year, with some frequency, my grocery store sold a 900-gram
package of pasta for 99¢. With wheat shortages, and with the American
government diverting almost 30 percent of corn crops into producing ethanol,
food products dependent on grain have skyrocketed. The same package of pasta
now regularly costs $2.99. If a struggling family bought 60 packages of the 99¢
pasta for a future consumption of one package a week, then their hoarding would
have knocked perhaps $100 off their grocery bill. By consistently buying more
than they immediately need of bargain items, the family can build a solid pantry
to sustain them through unemployment, inflation or scarcity.
Unfortunately, during economic crises, the government also acquires an interest
in hoarding — specifically, in punishing the hoarder as unpatriotic. A historical
example is the Food and Fuel Control Act, which became law in 1917, during
World War I; the acts official name was "An Act to Provide Further for the
National Security and Defense by Encouraging the Production, Conserving the
Supply, and Controlling the Distribution of Food Products and Fuel." In short,
the government became a food dictator, and anyone possessing more than a
30-day supply of food (which was considered reasonable by food
administrator Herbert Hoover) could be arrested.
The May 30, 1918, New York Times carried the headline, "Navy Man Indicted
for Food Hoarding." It reported on a man who had invested his wife's inheritance
in a year's food for storage; and so they were held on a $3,000 bail each. The
food was confiscated.
The navy man's fate is a cautionary tale in more than one way. The store of food
for his family was discovered because a grocer and neighbors informed upon
him. Thus, a sad corollary to the wisdom of hoarding food for your family is the
need to do so with discretion. This is sad, because the natural impulse of people
in a community is to assist those in need. Measures like the Food and Fuel
Control Act mean that sharing food with a neighbor who has hungry children is
no longer simply a gesture of compassion and generosity; such government acts
make sharing into a danger to your safety and your own children's well-being.
There is still time to hoard the items upon which your family depends. Prices are
rising, to be sure, but the full force of inflation and shortages is probably several
months in the future. Hoard now; hoard quietly.