Mainstream media and Swiss exporters have made countless arguments about how strong Franc hurts exports and consequently whole economy. Switzerland is “export-driven” economy they say, strong currency makes production expensive and when exports go down, people lose job in respective sectors. Unemployment goes up and economy suffers.

What these arguments are missing is the other side of the trade balance sheet – imports. When the value of Swiss’ incomes and savings were artificially lowered by monetary interventions, foreign goods and services became more expensive. With stronger Franc, they can buy more from abroad, which makes them wealthier overall. They can also redirect portion of money saved by cheaper foreign purchases to domestic production, partially compensating exporters for the loss of revenues caused by increased price of their products.

Trade is an exchange of goods and services with equal appraisal, but higher value for each participant. Both sides give away something to receive something immediately (in barter trade) or later (using media of exchange – money). There is no catallactic difference between domestic and international trade. Any difference is arbitrarily created by bureaucratic and monetary barriers raised by governments. In the long run, it doesn’t make sense for a person or a group of persons (nation) to maintain trade surplus because they are giving away something for nothing. It might make sense temporarily if those persons consciously decide to increase their cash holdings, but in case of Swiss people, the decision was made for them by the central bank. They were exporting valuable goods, but getting worthless European paper for them. By finally stopping the intervention, central bank merely reversed its own wrongdoing and allowed trade to re-balance to its natural and desired equilibrium.

In the short run, export industry will get hurt with higher prices of their production. But because of higher value of their currency, employees can take a wage cut without lowering their standard of living (sticky wages is a fallacy based on New Deal’s myth or by labor protectionism). Some jobs might be lost in the export industry, but can be restored in import or domestic production sectors. Balance of trade gets restored and the Swiss society will be wealthier as a result.

In the long run, exporters will find new ways how to add value to their products or increase efficiency of their production. West Germany has become largest net exporter while having one of the strongest currencies in the world in decades after WWII. In ten years before the currency wars started, countries like Switzerland, Singapore, New Zealand or Australia had concurrently increased both value of their currencies and their exports by tens of percents.

The real problem is, that in politics and media the group which suffers is much louder than the one, which equally benefits.