Comment by throwawayjava | Hacker News Reader

Comment by throwawayjava | Hacker News Reader

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The argument that Switzerland provides a model for high tariffs creating wealth is... especially ironic. Switzerland is one of the least tariff-encumbered economies in the world, reguarly topping out various free trade indicies [1]. And in Switzerland's case, that's almost certainly causual. Average salaries in Switzerland are so high because of the disproprtionate role Switzerland plays in EU and global banking -- a role that wouldn't be possible if Switzerland didn't embrace free trade.

So, if we're going to follow Switzerland's lead, we would roll back tariffs.

Switzerland is more akin to the EU's version of Massachusetts or New York, and Zurich is the EU's version of Manhattan or SF. It's the sort of economic zone that will always exist in a large economy like the US or the EU. The population is disproportionately made up of citizens from one or two cities/metro areas, and those cities have a high concentration of highly educated and highly paid individuals typically focused on one of a few industries. Consequently, even those employed outside of these high-paying industries make more than average compared to the rest of the country/bloc.

Situating ourselves similarly to Switzerland requires placing the US very high in the global value chain while maintaining a global order of very low trade barriers. Which has always been the neoliberal agenda, at least ostisibly.

In other words, if we want to emulate Switzerland, we have to do exactly the opposite of the Trump plan -- continue offshoring anything lower in the value chain, continue insisting on low trade barriers, continue dominating everything higher in the value chain. Obviously, even if this strategy works for the country in aggregate, it's going ot have definite losers in a country as large as the US.

On a (very!) related note, the US and Switzerland currently have basically the same PPP.

[1] https://www.heritage.org/index/country/switzerland

You didn't explicitly say it was, but you didn't make it clear that Switzerland isn't in the EU.

It depends on what you mean by "EU" - I do understand that EU member state has a specific definition that Switzerland does not meet. What most people think of as "EU" is actually an overlapping patchwork of agreements many of which Switzerland does participate in.

True, they're not part of the Euro zone. They're part of the Schengen area (common immigration zone), the EFTA (free trade area), signed the EEA, and adopted by themselves most EU regulations. [1] While not an ECJ member, they are softening their stance on that also [2].

[1] https://theconversation.com/what-is-the-swiss-model-of-co-op...

[2] https://www.ft.com/content/17d840b6-209b-11e8-a895-1ba1f72c2...

I would really like to see a source for your claim that "most people" think of the "EU" as something other than the European Union.

Seriously, what's with all the weasel words? Switzerland is not an EU member. End of.

What does EU mean to you?

Does it mean you can move freely from country to country? (You can, it's Schengen)

How about goods? (They can, they're in the single market)

How about animals? Pets? (Switzerland accepts EU pet passports)

How about laws? Switzerland has many of the same EU laws.

How about judiciary? They're moving to accept the ECJ.

At what point does it matter if they're EU or not if all the other rules apply? If you didn't know, you'd probably wander around Switzerland thinking it was EU. That's my point. I'm not claiming they're a member state. I specifically said that, in the first line. What I am saying is that they're hardly independent of the EU, and that makes a big difference.

They’re actually not in the single market for goods, you pay customs at the border if you import stuff.

(OP) Switzerland is not a member of the EU. Do you see any claim in my post that Switzerland is a member of the EU?

Nonetheless, Switzerland has a relationship with the rest of the EU that is analogous to the relationship between a small, dense US state and the rest of the USA.

Nonetheless, Zurich has a relationship with the rest of the EU that is analogous to the relationship between NYC and the rest of the USA.

This issue of whether Switzerland is properly considered "part of" the EU regardless of its membership status seems like quite the diversion from my actual point and is not at all relevant to the parallel I was drawing.

It doesn't make a lot of sense that Switzerland is the EU's version of MA or NY or that Zurich is the EU version of NYC or SF given that Switzerland is not in the EU and quite happy that way, too.

Switzerland has a big complex web of treaties and agreements with the EU that make it almost, but not quite, a member. Neither the EU nor Switzerland are entirely happy with the situation; the EU doesn't like all the tradeoffs that need to be balanced just for Switzerland rather than in the standard EU bundle, while Switzerland doesn't like things like freedom of moment being made a condition of market access.

See e.g. https://www.theguardian.com/world/2016/sep/22/switzerland-vo...

More than 120 treaties as of that writing, with guillotine clause - break one, break them all.

The analogy makes perfect sense.

They're both instances of a relatively small area with very tight historical ties to a much larger region. The relationship between the local economies and the regional economies bears enlightening similarities.

US states are not sovereign nations. but the analogy b/w EU member states and US states still makes perfect sense in some economic discussions.

The analogy is useful. A more apt criticism of the analogy might be "Switzerland's economy is not tightly integrated and dependent on the EU's economy" or "Switzerland has lots of tariffs", but neither of those things is true.

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