How Hayek Sold Plastic to Save Gold

How the least dignified product in Swiss history rescued the most dignified industry in the worldIn the late 1970s, Swiss watchmaking was engaged in the most refined form of suicide available to a mature business - dying while being entirely certain it was right. The numbers were not subtle. Employment in the industry fell from roughly ninety thousand in 1970 to under thirty thousand by the mid-eighties. Something close to a thousand firms simply stopped existing. Seiko, Citizen, Casio and Timex were selling watches that kept better time than a Swiss chronometer costing forty times more, and the Swiss response was to explain, with great patience and impeccable manners, why this did not count. Here is the detail that should be printed on the wall of every strategy department. The Swiss had the technology first. A research consortium in Neuchâtel had a working quartz movement before Seiko shipped the Astron. The industry examined it, understood it perfectly, and concluded that it was…