More on Swiss prices

I said at the end of the last post that I would write more about why prices in Switzerland are higher than most other countries in the world, including immediate neighboring countries. The first reason I listed is that they simply pay workers here more than most other countries, and that this stems more from a sense of societal responsibility than from any legislated minimum wage. What a concept!

Another reason for high prices here is that the Swiss government imposes very high tariffs on imported goods. This is obviously a large source of income to the gov't, as well as a direct cause of higher prices for goods and services within Switzerland. Protectionist tariffs are a very controversial and complicated topic, and I will only touch on them a little bit here. After all, this is just a blog about me and my wife's experiences here and my thoughts on things, not a platform for politically pedantic punditry!

In my opinion, protectionist tariffs generally do more harm than good. This opinion has been borne out in the United States several times in the past, particularly with regards to the U.S. auto industry. Our government's past attempts to protect our car manufacturers and their workers resulted, in the short run, in a virtual standstill in innovation and in cars that I think we can all agree were pieces of crap, and in the long run, in the virtual destruction of the U.S auto industry. Of course, the unions played their roll in what has happened as well, but protectionist tariffs rarely do much good in the long run, and can cause a lot of harm to all economies.

It seems that Switzerland is different than the U.S. in this way too, because not nearly so much damage seems to have been done from these tariffs. At least not such apparent damage. The main superficial effects seem to be higher prices on most things, which have led to higher wages. I think the deeper, unseen effects have been to create government-legislated monopolies by many Swiss companies in many industries, which of course has led to stifled competition and, ergo, depressed innovation and creativity. In many ways, the Swiss have become stagnant in innovating new technologies, new ways of doing things, increases in efficiencies and productivity. The Swiss people are some of the best educated people in the world, but they have lost the motivation to invent and improve things! This doesn't hold true in every area of Swiss life and industry, just those areas that are most protected by the government. The U.S. may have a model of capitalism that I think is too cutthroat in many ways, and we have a lot of social problems as a result, but we are also the most creative, imaginative, productive, and innovative country in the world! Probably in the history of the world.

Anyway, enough about that. The government here also puts a pretty high sales tax on most goods and services, especially gas and cars, and the fact that the whole country is a massive tourist destination and incredibly beautiful and clean enables businesses to keep their prices high. Gas is about $6 a gallon, and cars cost about twice or more what they cost in the States. Also, unemployment is very low here, about 4% now(and that is high for Switzerland). But, having just wrote all this, one can still find somewhat reasonable prices for many items. You just have to keep an eye out and wait for good sales on the things you need and want, and then jump on them! Till next post, Auf wiedersehn!