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Et Tu, Helvetia?


Tags Money and BanksMoney and BankingValue and Exchange

Soon you will no longer be able to purchase Switzerland's finest watches for cash.  One of the last  bastions of financial privacy, a fundamental prerequisite of individual liberty, has succumbed to the global war on cash.  The Swiss Federal government is proposing to ban cash payments of more than 100,000 francs ($107, 500 at the current exchange rate) including on watches and real estate.

 Transactions above this amount will have to be processed through the banking system, which will be subjected under the same draft law to tighter due diligence requirements.  The reason--need you ask?--is to prevent the catch-all crime of "money laundering." The Swiss finance minister Eveline Widmer-Schlumpf conceded that there is no evidence that watches are being used to launder money yet defended their inclusion in the law:

“We just said that if you’re proceeding in this manner with property and disallow cash purchases to prevent even the appearance of money laundering, then you have to do that for luxury goods as well.  Above 100,000 it doesn’t seem to be common practice to pay in cash.”

Ms. Widmer-Shlumpf appears to be unaware that criminalizing behavior based on deviation from "common practice" is a perilous misstep down the slippery slope to totalitarianism.  As Friedrich A. Hayek taught us in The Road to Serfdom, this is just as true when the law seeks to suppress economic liberties as it is when it aims to restrict civil liberties because the two spheres of human behavior are inextricably linked.  

Under the proposed law,  Swiss banks would also be tasked with ensuring that the funds they receive are "tax compliant" and refusing any funds that they believe have not been declared.

And herein lies the real reason for the law:  the Swiss government has finally knuckled under to pressure from the U.S. government which has been orchestrating a fanatical campaign against Switzerland's classical liberal tradition of financial privacy.  

The aim of the U.S. is to strip American citizens of financial privacy in every corner of the globe in order to mulct them of every possible dollar to  finance its profligate spending on domestic boondoggles and never-ending foreign wars. Switzerland is still far behind the Euroland

Joseph Salerno is academic vice president of the Mises Institute, professor emeritus of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

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