Prisoner's dilemma

For a nice summary, in plain English, of the problem with turning around this economic crisis see Thomas Homer-Dixon's article in today's Globe and Mail. The essential problem is that what's in one's individual interest during an economic crisis—hoarding, saving, and not spending—feeds directly into our collective problem—falling demand, investment, and so forth. And that's why governments become the "spender of last resort," the only entity that can, in effect, be directed to spend in an environment where the market, with individuals left to their own devices, will devour itself.