Real Federalism: Switzerland

By March 11, 2016Blog


With each visit to Switzerland, my understanding and appreciation of the political economy of the country becomes deeper and more nuanced.

The Swiss people have been incredibly successful in evolving a philosophy, culture and political structure which, limits the potential power of a centralist, nationalist and statist administration through the adoption of a federal system and other policies which distribute power.

As a visitor and outsider, I have attempted to sort through my observations to document the core factors which I believe have been critical to the evolution of the current condition of political economy and liberty.

My personal observations follow:

Like many countries, Switzerland has created a bicameral legislature where, in one house of parliament, small cantons have equal power with larger cantons.

Thus, some power is balanced and distributed equally, based on political jurisdiction rather than being based on population.

Additionally, Switzerland is a 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.

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 Founding fathers of the US 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 US 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 in their constitutional structure. In addition to representative democracy, an alternative of direct democracy was established. Via this option, citizens can directly vote on proposals to veto or nullify legislation passed by the central government, as well as propose and vote on initiatives which can become law via plebiscite. 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 by a cabinet of seven, each of whom serves a single year as President on a rotating basis.

Thus, Switzerland has rejected the cult of the executive or one who perforce acts with respect to personal interests rather than necessarily seeking policy, which 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 on lack of the financial rewards often existing in other countries.

The country operates an effective system of education which 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 deep and 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 US, 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.

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 US will continue to put pressure on Switzerland to be more like the “politically-correct” states which run large deficits and pass laws and regulations which invade the liberty of its individual citizens as well as other countries. And, there are always outside interests (read EU or US-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 which 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 the political economy of Switzerland to be the antidote and exemplar to the politically correct views sweeping much of the world.

In closing this paper, I will end with the paragraph which I have used, for years, in closing my personal correspondence.

“Cheers and in praise of individual liberty, private property, free markets, free trade, strictly limited government, voluntary contracts and association, individual responsibility, the true and essential rule of law, self-organizing systems, and with all operating in the context of constitutional constructs which protect the natural rights of individuals against the power of centralized-statist-nationalist governments through overlapping, fractured and distributed prerogatives and powers (or in praise of the United States Bill of Rights, state’s rights, city states (like Hong Kong), local grass-roots institutions (like churches, the Tampa Theater or the Tampa Garden Club) and countries with an effective balance of state vs. central power, like Switzerland.”

Harry Teasley

Harry Teasley is a retired Coca-Cola executive and friend of the Abbeville Institute.

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