Having recently been engaged in some conversations on the merits and demerits, in addition to the morality of, hoarding, I thought it might be a good idea to take a closer look at the matter.
The economic and moral charge leveled is that hoarders deprive others in the economy of much needed goods and capital.
Perhaps it's time we laid this old warhorse to rest.
Let us start by defining what it is to hoard.
a supply or accumulation that is hidden or carefully guarded for preservation, future use, etc.: a vast hoard of silver.
to accumulate for preservation, future use, etc., in a hidden or carefully guarded place: to hoard food during ashortage.
to accumulate money, food, or the like, in a hidden or carefully guarded place for preservation, future use, etc.
There are a few things to keep in mind here.
Firstly that the world is finite, with finite resources. Secondly, we require some of these resources in the process of sustaining life.
There are two valid criticisms that can be made against the act of hoarding. The first is that a hoard may perish before the hoarder has the opportunity to use it, and as such he destroys real wealth and deprives someone else of perhaps a meal or a life.
The second being that hoarding is generally an inefficient use of productive wealth. Such a hoard could have been used to create more wealth and everyone would have been richer for it.
Those who criticize the act of hoarding extend this rationale to any thing hoarded, gold attracting particular ire.
Before we look at the latter, let us first look at a near equivalent : money.
What does it mean to hoard money? What is money in terms of our needs for sustaining life?
Money represents a claim on the productive economy. It is not wealth in and of itself. Remembering that the world has finite resources, money is a force of directing the use of such resources in certain enterprise rather than others. Being an accounting mechanism, it does not have correlation with the real wealth in the world (food, commodities, land, etc) at any one snapshot in time. It does however have correlation with future real wealth given it's function of directing production.
Being that money lubricates trade, the hoarding thereof means that future investments are not directed by productive savers; though in our modern economy it is debatable that this could be the case at all.
In the modern economy loans for productive investment are created out of thin air by banks. So a stock of accounting stubs are not strictly required to fund investment. Furthermore central banks that notice a decline in velocity ( the effect of hoarding cash) simply compensate by creating more fiat, and so the effect on society is negligible.
Sidenote : Central bankers believe they can remove this excess liquidity, when people inevitably dishoard the cash, in an orderly fashion. I remain unconvinced.
What then of gold?
“Maybe most remarkable in this is that Gold is not itself something that is needed or consumed in satisfaction of our basic material needs for survival. But due to it being perfectly and uniquely suited for this universal role in trade for any other person's available wealth as necessary to meet our own specific needs, Gold has become such a near proxy for the real wealth we require for life that many of us have permitted ourselves the casual inclusion of Gold into our otherwise strict definition of wealth.” - Aristotle
Gold, like money is not real wealth.
Casual inclusion of gold with real productive wealth leads to the mistaken conclusion that saving in gold removes value from the economy.
The reality is that either fiat or gold is simply a claim for some real productive items in the future. Those that hoard gold in fact do society a great service, not only do they expend their productive ability in creating more than they produce, in return they accept nothing but a promise that they may be repaid in real wealth some day in the future.
Gold cannot be created out of thin air, and so for the individual saver it is more sensible to hoard than money as it is not continually debased.
In conclusion, feel free to pile your shiny yellow rocks as high as you can without fear that you are doing anyone a disservice.