With each visit, my understanding and appreciation of the political economy of Switzerland becomes deeper and more nuanced.
The Swiss people have been incredibly successful in evolving a philosophy, culture, and a structure of political economy which limits the potential power of a centralist, nationalist, and statist administration through the adoption of an effective federal system and other policies, which distribute power.
This does not mean that are no pressures to centralize, but rather there are policies and culture in place, which limit central action. Additionally, where issues are centralized, policies appear to be reasonable, rational, and logical.
As a visitor and outsider, I have attempted to sort through my observations to document the core factors which I believe have been and are critical and have contributed to the current condition of liberty and political economy.
My personal observations follow:
Like many countries, Switzerland has created a bicameral legislature where, in one house, small cantons have equal power with larger cantons.
Thus, some power is balanced and distributed equally, by local jurisdictions, rather than being based on population.
Additionally, Switzerland is a true federation of states and power is balanced and distributed between the cantons and the central government.
Importantly, the power to tax is also well distributed. This structure also creates an environment in which cantons can both cooperate and compete, which drives efficient administrative management.
“The powers to tax and spend coincide almost exactly as each level of government is responsible for its own finances. There is very little explicit redistribution (two exceptions: federal support for mountain farming and federal support from richer to poorer cantons through the “peréquation” process) and certainly no federal “bail-out” promises!” (Source: A Swiss friend)
Thus, power is balanced and distributed based on a truly federalist structure characterized by states’ rights.
This set of factors reminds me of several of my favorite quotes, which follow:
On the Framers of the U.S. Constitution:
In his article “What Our Society Should Be All About,” Professor Paul McCracken makes the following points:
* “The basic function of government (as the founders saw it) was to provide a framework within which the ingenuity and creative powers of all people would be free to operate.”
* “Within this framework, then, could be expected to emerge spontaneously a life of far greater complexity, diversity, richness and sense of self-fulfillment than if government attempted itself to decree in advance the specific patterns and designs and blueprints of the ‘good life’.”
* “The liberal free and open system, in short, provides a logical process for achieving continuing disestablishmentarianism.”
In his book, Liberty and the Law, the economist, social scientist and Nobel laureate Friedrich Hayek, paralleling and expanding on the insights of the U.S. Founders, made the following observation.
“The possibility of men living together in peace and to their mutual advantage without having to agree on common concrete aims, and bound only by abstract rules of conduct, was perhaps the greatest discovery mankind ever made.”
Thirdly, in 1891, Swiss citizens made a crucial change to their constitutional structure. In addition to representative democracy, the alternative of direct democracy was established. Via this option, citizens can directly vote on proposals as well as veto or nullify legislation passed by the central government. This condition informs and limits the action of the central government.
Thus, power is balanced and distributed between the central government and all citizens as a group.
Unlike most countries, Switzerland is not ruled by a king, emperor, elected president or prime minister but rather by a cabinet of seven. Each serves as President for one year.
Thus, Switzerland has rejected the cult of the executive or one who perforce acts with respect to personal interests rather than necessarily seeking policy that is good for the country as a whole.
Election to a political office is not an act that allows the politician to develop wealth through salaries, perks, and privilege, as is so often the case in political jurisdictions in other countries.
Thus power is self-limiting based via lack of the financial rewards often existing in other countries.
The Swiss educational system both educates and prepares the young person to assume a self-supporting position in the greater society. The apprentice program is a critical part of this structure. I am always impressed by the complex understanding and knowledge young people have of the company or organization, where they work as apprentices.
Culturally, the people whom I have met are well educated, individually responsible, have a love of community, and are well informed about their country and government as well as local and broader economic issues.
Unlike many countries in Europe or the United States, Switzerland cannot be described as a welfare or warfare state. The Swiss, whom I have met, respect the rights and privacy of others and tend not to intrude or intervene.
Further, as compared to many other countries and societies, the Swiss governments and people tend to be financially conservative and responsible.
Thus, I posit the following summary: It appears that the Swiss view liberty and individual responsibility as opposite side of the same coin.
“One might hypothesize that Swiss political institutions have over time created a responsible electorate, which is so sorely lacking in other great democracies. If responsibility is a virtue which has to be cultivated if liberty is to be preserved, then the Swiss have stumbled on a way to encourage it! Also, a responsible attitude does not just inform political decisions, but of course all other spheres of human action, in business, family and social life too.” (Source: A Swiss friend)
Finally, I view that the greatest set of risks facing the historical culture and political economy of Switzerland lies not internally with the people and government, but rather from external pressures. Switzerland is a burr under the saddle of other more centralized and statist countries. I believe that the EU and the U.S. will continue to put pressure on Switzerland to be more like the politically correct states that run large deficits and pass laws and regulations that invade the liberty of its individual citizens. (A Swiss friend commented: “I agree! They hate this counter-example to all their anti-freedom policies.”)
And, there are always outside interests (read IRS), which seek rents and ways to confiscate other people’s money.
There are probably some who might say that I tend to view Switzerland through rose-colored glasses, but in response, I would argue that I possess far too many data points from other countries that support my analysis and conclusions.
However, I do acknowledge that I view Switzerland through the eyes of a visitor and outsider and thus my observations and conclusions are both perforce limited and constrained. However, I find Switzerland to be the antidote and exemplar to the politically correct views sweeping much of the world.
