In a future world, the health and progress of a society, community, or country will be evaluated taking into account its cultural, social, political, and economic development. For the class imposing the neoliberal agenda on us, progress is measured by taking into account only certain economic indicators. Those that assure it that its investments are protected and can continue to accumulate capital. For us a healthy economy is one where we all have our role, a job where we develop projects together and democratically decide the development of the community, culture, politics, and society.

The economic politics of our governments prioritizes financial investments over our fundamental necessities. This is a proposal to develop a local currency in our communities as a way to democratize the monetary policy that influences our standard of living. The idea would be that via education we could convince a significant number of people in our communities to accept this currency in exchange for goods and services.

The use of this currency would revitalize and help recuperate our local community based economies. It would benefit the same community and small businesses that have been destroyed by globalization and ``modernization'', the neoliberal articles of faith.

A local currency has been implemented in Ithaca, a town in the state of New York and it is important to study their experiences before implementing this idea. We are not sufficiently familiar with their experience to present it here. What we will do is present the general economic and political arguments for the use of a community currency and we will use the economic crisis in Canada as an example to argue for its use. We use Canada as an example only because it permits us to present the Canadian reality at this meeting and not because we believe that the Canadian situation more readily lends itself to the use of a local currency.

It is important to understand that money serves as the lubricant in an interchange of goods and services. It is an accounting system. A way to keep tabs. Money in itself does not have an intrinsic value if it does not have the confidence of the people who use it. Money works because you know that if you sell something for $10, another person will accept those $10 for another service or product. That is the way the Mexican peso and the Canadian and US dollar work.

In Canada social services have been blamed for the deficit and the debt and they are using this excuse to dismantle them. However a study by Hideo Mimoto of the Canadian government department Statistics Canada published in June 1991 contradict this. H. Mimoto and P. Cross, ``The Growth of Federal Debt, 1975-1990'', The Canadian Economic Observer, June 1991. I found out about this study from the excellent book by Linda McQuaig, ``Shooting the Hippo, Death by Deficit and Other Canadian Myths'', Penguin Books 1995. The numbers used in this article were taken from that book. Mimoto showed that according to government statistics, unemployment insurance only contributed 1% to the growth of the debt between 1975 and 1990. Welfare programs contributed 4.5%, old age pensions 6%, and housing programs 3.4%. And not only that. The cuts to family benefit programs incorporated by the government after 1975 helped reduce the debt 11% !

The real culprit in the Canadian debt's uncontrollable rise is not the social programs but the high interest rates that are a result of the Bank of Canada's monetary policy. These high interest rates serve to protect large investors. For those that accumulate capital it is important that this money not lose its value, that is to say that there be zero inflation. Moreover since this same money is to be lent out, they are interested in maintaining the highest interest rates possible.

But this policy of zero inflation and high interest rates suffocates the interchange of services and materials between the population. We need an easy access to money to interchange products and services. Remember that money is an accounting system that act as a lubricator in these exchanges. If money is expensive (that is if interest rates are high), we are unable to buy the seeds, tools, or merchandise needed to be economically active. If we can not acquire loans to buy the merchandise to sell in our stores, we can not earn our living in that way and our only option is to go work for someone who can pay such high interest rates. The current crisis in Canada and Mexico is that not only family stores and businesses are failing, but also businesses that we would have considered large five years ago. Only the multinationals, those that control the capital and earn a profit from it, can survive with such high interest rates.

What results is a massive loss of jobs with the failures of all sorts of businesses. With so much unemployment, with so much lack of activity, society does not produce or exchange. Government income decreases because unemployed people do not pay taxes on money they do not earn, nor sales tax on the products they do not buy. With unemployment on the rise, our government's income falls. With high interest rates our debt increases. The only winners in this game are the super rich. And it is a direct result of our governments' monetary policy.

If, on the other hand, interest rates were low, and we continued to be employed, inflation (as long as it isn't hyperinflation), does us no harm. This modest inflation is a result of a greater access to money by a larger part of our society's citizens. If many people want and can buy strawberries, bread, roses, or meat, these products will increase in price. We want an egalitarian society where everyone has access to bread and roses. But to protect their capital, neoliberalists look for ways to increase interest rates and lower inflation. Small farms and small businesses fail and unemployment rises.

To change this policy we have to struggle. Historically in the province of Quebec a strong struggle took place through trade unions and community organizations. During the seventies, as part of the struggle for sovereignty, a great social infrastructure was put in place with universal health and education, and a great support of francophone culture. However today the province of Quebec finds itself in a demobilized state, on a political, social, and popular level. And even if a strong sovereignties current still exists, this modern sovereignty is anti-immigrant and neoliberal. It does not include the self-determination of indigenous peoples. It only includes the neoliberal use of their land and natural resources.

The federal government, as well as the provincial and municipal governments throughout Canada, are privatizing the infrastructure. The Canadian government wants to sell bridges and roads, all of which were of course built with public funds. In Montreal the sovereigntist provincial government of Quebec is closing 9 hospitals. The Montreal municipal government wants to privatize the water system. In spite of all this, the progressive unions and community organizations that thrived in the seventies, have been coopted.

During a recent conference on the economy organized by the Quebec provincial government, the government proposed the elimination of the deficit in two years. The complaints of the unions led to the great compromise. We would do it in four years. Quebec's prime minister, Lucien Bouchard, assured us that there would be no sacred cows in the cutbacks to come. But foreign investors and multinationals were never mentioned in the list of those that would have to make sacrifices.

Faced with this government aggression and the abandonment of the unions and the supposedly community organizations, we have to look for ways to reconstruct our economy in a democratic manner. We don't have to ask permission to be economically active. We don't have to ask permission to be allowed to eat. We don't have to ask permission to enjoy life. That's why we propose that we organize local currencies in our communities.

This currency would work if people had confidence in it, just like people have confidence in a dollar. And to obtain this we have to develop a grassroots organization that will organize people, educate them, and have these people become involved in the project. A local currency project is not a question of creating another economic theory and another bureaucracy. It's a question of organizing ourselves to create our own work and support the people in our community. This organization would not only serve the use of the currency. It would also facilitate the development of material, cultural, and educational interchanges.

For example the community would start by explaining the project to everyone and asking for the commitment of small businesses, doctors, unemployed, area farmers, to accept the currency. If the community decides on a project, it pays the people in this local currency, and these people that were not active within the formal economy find their place in the community. The community would accept their payment in local currency in exchange for merchandise or services. This would be a recognition on the part of the community for the work undertaken by the former unemployed. Direct democracy would be revitalized. The idea is not to replace the national currency, but to not use it if not necessary.

The sharing of this independent monetary system, the organization and interchange of products and services, and the effort necessary to maintain the system, implies political consciousness, cooperation, organization, solidarity, and a long term commitment on the part of the community. The very act of initiating this project within the community would bring its members together and reinforce community ties. This is of utmost importance in countries like Canada and the United States where individualism serves as the drug of demotivation that neoliberalism requires to survive. In North America the act of always fighting government cutbacks discourages and demobilizes people. It shows us as the subjects in history; we complain instead of construct.

This project implies a change in our daily life and our long term vision. Present day monetary policy is extremely antidemocratic. Our proposal is an effort to democratize it without asking the powerful for permission. We only need the permission of our communities. This is the example given to us by the Zapatista communities.

Oscar Hernández, Réseau de solidarité avec le Mexique, Montreal, Quebec, Canada