Hoarding

Modern toilet paper with 

splinters

Photo: Ileana Johnson 2015

Throughout history, when governments have intervened in the smooth operation of the free market based on supply and demand, the results have been disastrous, not the least of which is hoarding and the emergence of black markets. I am not talking about the psychological problem of hoarding personal items when people have a hard time getting rid of anything they own, even old and dirty scraps of paper. I am talking about fear-based hoarding, the result of fear of shortage or imminent societal collapse.

Natural disasters such as announced hurricanes or tornadoes often compel people to buy excessive food, bottled water, gasoline, a generator, milk, but especially toilet paper. Civil unrest or fear of disease such as this corona pandemic can also force people to hoard food and other necessities, including toilet paper. In a category of its own are the preppers who are ready for any end of the world, political holocaust unrest scenario. They purchase food with the shelf life of 25 years or more and build shelters/bunkers underground, in caves, or decommissioned bunkers.

Hoarding goods in excess of immediate need is caused by artificial scarcity. Artificial scarcity can be cause by unnecessary government intervention that scares people into hoarding behavior, i.e., panic driven by government forcing the closure of businesses and locking down the working population which can no longer produce necessary goods for society to function properly. Best example of this is the recent Covid-19 interference in the market. This action is yet to reveal the entire disaster which has wrought on the economy as the domino effect of unintended consequences is making chips fall.

An example from the past of government interference in the market is price controls at Valley Forge when farmers, who needed to feed their families, did not abide by the government’s price controls and sold their produce to the British for gold while Washington’s continental army was running at near starvation mode.

Economists believe this is what happened after 1971 when President Nixon decided to experiment with price controls. The economy suffered a plague of shortages, “we ran out of nearly everything” and, after price controls ended in 1974, most of the shortages disappeared.

Monopolies and cartels such as OPEC can also cause artificial scarcity of one product/service they offer. Holding a patent for a new drug can cause shortages and high prices as a result.

The New Deal issued the Agricultural Adjustment Act (AAA) which was “designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land.” This act caused artificial shortages.

Deliberate destruction of goods such as in a war situation can cause panic hoarding driven by the fear of starvation. Such items in short supply become mediums of exchange, more valuable than currency, i.e., cigarettes, bullets, chocolate, soap, women’s pantyhose, medicine, and vitamins.

Destruction of goods because there is no longer a distributor or buyer for that good can also cause hoarding. The recent Covid-19 action by the government has caused farmers in Florida to destroy tons of tomatoes, squash, and other vegetables which were previously bought by now closed restaurants. Farmers have also dumped thousands of gallons of milk as schools, universities, and restaurants were closed indefinitely. At the same time, a shortage of milk in grocery stores forced grocers to impose a purchase limit of one bottle or one gallon. People thus hoarded milk.

People engaged in what is called panic-buying of certain products in anticipation of a disaster, shortage, or large price increase. Some example of panic-buying through history include the first and second world wars when everything was in short supply; the 1918-1920 Spanish flu pandemic when people stored quinine and remedies for flu such as Vicks Vapo//Rub; Cuban missile crisis in 1962 when people bought excess quantities of canned food; any hurricane or tornado causes people to buy excess milk, bottled water, bread, and toilet paper; Coronavirus pandemic caused people to panic-buy food, facemasks, rubbing alcohol, hand-sanitizer, anti-bacterial wipes, anti-viral wipes, and toilet paper. Panic-buying causes price gouging by both individuals and grocery stores.

The most glaring example of constant hoarding occurred during the entire existence of the socialist republics of the Iron Curtain which were run by the highly inefficient centralized government of the Communist Party. Citizens of such countries like Soviet Union, China, Poland, Yugoslavia, Bulgaria, Czechoslovakia, North Korea, Vietnam, and Cuba were forced to constantly hoard items in short supply. Most products were in short supply because of the absolute mismanagement by Communist Party apparatchiks.

In these socialist/communist countries hoarding was punishable by law, and those caught served jail time. Both a black market and a barter market emerged from the severe shortage of everything. People were accustomed to carry around large sums of money and jute shopping bags in order to join a line in progress because they knew, whatever was on sale, they needed it.

But why hoard toilet paper? It is a basic instinct to be and stay clean. There is also the knowledge that, unlike food where there are substitutes, toilet paper has no substitute unless you consider paper towels, newspapers, and leaves.

People stockpile toilet paper because it is not perishable and are afraid that the domestic production and distribution will be disrupted. If needed, toilet paper can also be used as cosmetic wipes and tissue. Toilet paper under the centralized Communist Party economy had huge splinters in it and was always in short supply. Finally, people engage in mob mentality, ‘everyone is hoarding TP, I should too.’

There are 150 companies that manufacture toilet paper and the average person uses under 100 rolls a year, some much less. The U.S. demand for toilet paper stands at about 3 billion rolls a year. We import about 10 percent of our needs of TP.

If hoarding from grocery stores is not an option, people turn to canning and drying fruits and vegetables. If you freeze a lot of food, remember that, if the power goes out, the cache will spoil. Twice we lost the contents of our freezer and refrigerator due to spoilage after hurricanes when electricity was out for days and even weeks.

No matter what you hoard for survival, you will eventually run out if production and distribution are disrupted for extended periods of time.