Switzerland is a capitalist free market economy which trades with the world,
so it comes as a surprise when a local paper headline announces a rise in
the price of a cup of coffee across an entire canton, shortly after you first
settled here. You wonder. You wonder, at first, if you've understood the German
correctly. Then you wonder if you understood it at all, as everyone assures
you price fixing is illegal. Eventually you wonder what is really going on.
Recently I had a haircut from my usual barber, after which he apologised to me that he had to charge more. The apology included an explanation that this wasn't his choice, that the "guild" had put the price of a hair cut up............................. Price fixing is illegal?
OK. I started to explore these 'Medieval Guilds' with some of my best students, one of whom is a lawyer. He very kindly photocopied the necessary statutes and explained every thing to me. It works as follows - it is illegal to form Cartels or price fixing organisations or seek to establish monopolies. It is however, legal to form private business related clubs and if pricing is discussed within them then this is nothing more than normal commercial relationships. These organisations are social organisations and not created to fix prices in any way.
The effect of this open secret is quite fascinating, very Swiss and extremely practical. Prices are controlled with out any formal action and yet no one tries to exploit the relationship for temporary gain as this is near impossible. For the Swiss it has significant benefits.
