January Issue 2021

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New Blogs:

Taiwan Does It Better​

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Blue Stilton is not Gruyère

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Focus of the Month:

A Troubling New Way of Business For Switzerland

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Other Highlights:

Our fifth annual Think Tank Summit

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took place on january 21/22. This year’s topic was “Global Migration” and for the first time it was fully virtual. In the following weeks, our website will be updated with reviews of the speeches and discussions. Watch Peter Maurer’s closing keynote on “The Responsibility of Liberal States With Regard to Refugees & Asylum Seekers” here

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A Troubling New Way of Business For Switzerland

The corona crisis reminds us of the value of free markets

by Haig Simonian, our external editor

Almost a year after Covid-19 made its unwelcome debut in Europe, the pandemic continues to dominate headlines and policy making across the continent. In Switzerland too, every latest twist and turn, from feared foreign mutations to federal squabbling, remains subject to intense attention.

The pandemic has caused massive practical and ideological problems for all Europe’s governments. Arguably, for few more so than the Swiss. True, other countries, such as Germany and Austria, share federal systems too, leaving them poles apart from the centralized decision making of, say, France. But none has the same extreme degree of federalism and such an intense liberal political tradition as Switzerland.



An unprecedented degree of centralism

The centralization (and, for its critics, arbitrariness) of pandemic era planning in Bern has triggered significant ideological unease for many free thinking Swiss – as a recent article by Avenir Suisse Director Peter Grünenfelder in the CH Media group’s newspapers showed.

Referring to the government’s decision to order the closure of all ‘non-essential’ shops – a move attacked as capricious by many – Grünenfelder made no attempt to mince his words in noting:

“In liberal Switzerland, it is the authorities that in future decide which classes of goods count (under the ban) and which do not. Flowers and underwear sales receive state approval, whereas gym shoes and sports articles do not. Those who in these cold days bought their outdoor jackets can consider themselves lucky for having stocked up. Shopkeepers have to take meticulous note of selling only permitted items and observe opening times strictly, or face record high fines from the new, all powerful state.”

Similar barbs are addressed at the vagaries of Switzerland’s snowballing quarantine restrictions, the still unreliable track and trace system and the complex Covid-19 App, along with seemingly excessive requirements that not just those in direct contact with infected individuals must go into quarantine, but people in contact with those in contact too.

Such rules and bureaucracy sit ill with Switzerland’s liberal traditions of individual responsibility, mutual trust and abhorrence for any hint of a Big Brother state. Meanwhile, the price of the latest closures continues to climb, with the latest shuttering of non-food stores costing an estimated CHF 3.2 bn a month.

“One off measures” may recur too often

Such astronomical sums are particularly hard to swallow for the normally thrifty Swiss. In contrast to almost all its neighbors, Switzerland has reduced state borrowing steadily in recent years, even during the financial crisis. After cutting public sector debt progressively for almost two decades, today’s special assistance programs have reversed those advances at a stroke.

Perhaps most surprising is that there has not been more of an outcry. Switzerland’s left of center political parties and trade unions have looked to the massive spending programs of their neighbors – capped now by the European Union’s groundbreaking decision to raise special Coronavirus debt – and played down their own country’s apparent U turns, claiming some form of force majeure to justify ditching decades old caution.

Of course, these are special times. But such ‘one offs’ may be growing uncomfortably frequent: the financial crisis of 2007–8, requiring unprecedented state intervention, and even bailing out UBS, Switzerland’s biggest bank, is barely a decade away.

The risk is that ‘one offs’ can nurture a mentality of state intervention that, at worst, nurtures dependence. Drawing the line between support for the most vulnerable in society and safety nets for companies in difficulties, and blind handouts, is, or course, notoriously difficult. Generosity, in times of doubt, may be the safer option for political leaders.

The danger is not to turn that into policy, potentially at the cost of valued Swiss attributes of entrepreneurship, individual responsibility and free enterprise. Companies live and die; workers gain and lose jobs – such is the normal ebb and flow of business. Protective mechanisms should operate, but not at the cost of stifling adaptability, free competition or the innovative spirit that allowed a small, topographically challenged country with scant natural resources to become one of the world’s most affluent states.

Our Latest Publications

Avenir Suisse Freedom

Index 2020

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Keep Your Distance

from the SNB!

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Long Covid in Fiscal

Policy?

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Do you have any suggestions?

Please send your feedback to [email protected]

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Avenir Suisse is the leading Swiss think tank which promotes open-market ideas in economics, politics and society at large. Although continuing to publish on Switzerland’s domestic politics, the think tank aims to address Switzerland’s growing importance in the international community and global economy. Avenir Suisse’s English-language monthly newsletter aims to reunite people and institutions interested in obtaining regular valuable insights on Switzerland, useful in international discussions and as a source of comparisons.

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