There’s a fundamental difference between money and all other goods. Other goods are purchased in order to do something with them. You get value from the thing, be it a sandwich (it has fulfilled your need for food) or a television, a house, a car, etc…it is providing something you need or want. Money doesn’t do anything, except get you other things. You can’t live in money, you can’t eat money, money doesn’t entertain you, its sole purpose is a general medium of exchange. If suddenly I had twice as much money, there wouldn’t be twice as many good to purchase…I wouldn’t be twice as rich, because products, not money, makes wealth. So an increase in money doesn’t confer a social benefit as happens with other goods.
Hoarders are often portrayed as greedy and irrational. They “harm” the economy by keeping money to themselves. But actually, by withdrawing money from circulation, they are increasing the purchasing power of everyone else’s money. So many people think that creating more money will give them more purchasing power, but on the contrary, less money is better.
This doesn’t address the why of hoarders. Why do they keep so much money? Because of uncertainty. If the hoarder knew the future for certain, they would not need to hoard so much money, but because they don’t know what the future holds, they withdraw and save money.
Many economists hold to the error that money stored under a mattress is of no use. On the contrary, it is useful to the owner because it gives him the option of purchasing something now, or later.