The history of Switzerland is not widely read, which I think is a pity. A few observations based on my reading of Swiss history combined with my experiences traveling there and studying its political system:
Historically, Switzerland tied its “neutrality” to a tacit alliance with France for over 200 years. Because Switzerland was at the time a “weak” confederation of city-states more akin to the European Union or NATO than to the contemporary United States, the confederation tended to stay out of the Great Power struggles of 1500’s — 1700’s (as you rightly point out, to it’s benefit). Prior to that the various cantons were just another aggomeration of small states that may or may not have been part of the Holy Roman Empire (depending on who you were talking to) and the only thing that really kept them together was their desire to remain free of Hapsburg rule.
However, France was the Confederation’s unspoken protector and it was the threat of French interference that kept any number of would-be conquerors at bay during that time. That unspoken alliance kept the Confederation safe from conflagrations like the Thirty Years’ War which ravaged the rest of central Europe.
However, the French Revolution changed all that. Napoleon invaded Switzerland over the St. Bernard Pass, routed the Bernese troops who attempted to stop him, and raided their treasury (at the time reckoned to be the wealthiest treasure-house in Europe).
After Waterloo, Swiss neutrality became explicit and recognized by the Congress of Vienna.
Swiss “neutrality” and its desire to avoid international conflict was also borne out of its position astride the various Alpine passes and site at the headwaters of every major European river (Rhone, Rhine, Danube), which even hundreds of years ago were crucial trade and pilgrimage routes. The various Swiss cantons certainly took advantage of their location-location-location to profit from trade, and there is little doubt that the Swiss knack for commerce developed in no small part by virtue of trans-Alpine trade. Likewise, those routes were avenues for armies to march to strategic points like Antwerp, Milan, Cologne and Paris. Swiss cantons also profited by allowing armies to do just that (for a fee). Spain marched thousands of soldiers through Switzerland on their way to fight rebels in the Spanish Netherlands.
What Switzerland lacked in international conflict they made up for with internecine strife (see, e.g. the First War of Kappel , Second War of Kappel , First War of Villmergen , the Toggenburg War and the War of Villmergen ).
Switzerland’s constituent cantons were more-or-less independent states until the Sonderbund War (more on that later) in 1848. As some cantons were French-speaking, others German-speaking, some Catholic, others Lutheran, still others Calvinist, and one was even the property of the king of Prussia (Neuchatel) — there was a great deal of competition, rivalry, and backbiting.
The cantonal structure of early Switzerland was such that some cantons were “subject” cantons, really colonies of other cantons. The Italian-speaking canton of Ticino was, until Napoleon, a patchwork of subject territories belonging to Bern, Uri, and Schwyz. The Grisons (or Graubunden) was itself a whole other confederation of micro-states that was merely allied with the Swiss Confederation until it finally formally joined in 1803. Religious strife casued the hinterlands of Basel and Appenzell to secede and form their own cantons — thus we have the “half-cantons” of Basel-Stadt and Basel-Land; also Appenzell Innerhoden/Ausserhoden; Nidwalden/Obwalden. The Francophone cantons of the Suisse Romande were occasionally independent, occasionally allied with the Confederation, occasionally absorbed by France. Vaud was, like Ticino a subject of Bern for centuries.
In 1848 the Catholic/Protestant divide erupted in a civil war — the Sonderbund War, between the Catholic cantons (led by Luzern) and the Protestant cantons (led by Zurich). Not at all unlike the American Civil War, the Catholic cantons feared undue centralization of the federal government and loss of influence. While slavery wasn’t an issue, radical reforms such as the extension of the voting franchise to all were similarly divisive and threatened the more conservative, aristocratic Catholic cantons. Likewise, the freedom of speech and press in the other cantons was perceived as threatening. But the Sonderbund (which literally means “special alliance” in German) broke one of the only rules of the Old Confederation — which was: no alliances with threaten the big alliance (the Confederation).
Armies were raised, battles were fought. The liberal/Protestant cantons prevailed. It wasn’t a terribly bloody or nasty war (fewer than 100 died, fewer than 500 were even wounded). The constitution was re-written, and Switzerland’s new Constitution was inspired, in no small measure, by that of the United States’. But the confederal system became more federal, and from this point the Confederation became more of a nation-state than an alliance.
The Swiss constitution was revised again in 1874. That revision contained the revisions (proportional representation and referendum) that really transformed Swiss society into the modern one we know today. But the underlying principle of Swiss governance is really revealed in the Swiss German word for “federation” — “eidgenossenschaft.” That word implies both a fellowship and that the fellowship is morally laudable. That tradition continues into the modern day when Swiss polticians refer to the “sovereign,” which is a reference for “the citizenry” who are sovereign in the Swiss constitution.
But the thing is — Swiss politics are almost non-stop heated debate and strife. Every act of the federal Parliament can be brought to a referendum vote. Certain acts of the Parliament must be approved by referendum. Any citizen gathering enough signatures can force Parliament to vote on a given topic, or approve the referendum outright. As a result, the Swiss are constantly amending their Constitution, voting to approve/deny acts of parliament, and arguing about these things. One of the largest political parties, the Swiss People’s Party (populist-right) has used referenda to further a nationalist agenda, effectively ending 50 years of consensus-based government in Bern.
The proportional representation and referendum system is replicated at the other layers of government: cantons and communes.
Also, the Swiss have (not without domestic controversy) joined the international entanglements of the United Nations, the Schengen Area, and the European Free Trade Area (a kind of neo-EU).
My own view is that what the Swiss have done well is to devolve power to the cantons and communes. The majority of governmental taxation and spending is at the cantonal and local level. Only with the rise of the SVP does one see the alienation of the individual citizen comparable to that in other developed democracies. I believe that this is because the citizenry is still much more empowered and has a more direct connection with its government than others. Also, the impersonal nature of the Swiss executive branch, run as it is by a council with a rotating “head-of-state” for protocol purposes only renders personalities less significant than they are in most democracies.
As far as natural resources are concerned: Switzerland was able to feed itself during two world wars. Most Swiss don’t live in mountains, but rather the Swiss Plateau that runs from Lausanne to St. Gallen. The plateau supports a large and heavily subsidized agricultural industry which means that Swiss farmers provide for the majority of domestic consumption. The Swiss were the first country in Europe to fully electrify their railway network and derived the power then from (regionally, if not locally available) coal and hydro. After a fling with nuclear power, the Swiss now get 60% of their electricity from hydro, and are phasing out nuclear power in favor of renewables by 2050.
However, in terms of foreign policy, Swiss “neutrality” has always been under girded by significant implicit alliances: with France until 1803, guaranteed by the Congress of Vienna, through the consolidation of the second German empire in 1871, and under the cover of the NATO/US umbrella up to the present day. Even during the World Wars, Switzerland engaged in (hush hush) intelligence sharing and contingency planning with France. It was only the fall of France in 1940 that left the Swiss truly isolated. From 1940–1945 the Swiss were able to keep Hitler at bay by threatening to destroy the rail and road tunnels that cross the crucial Alpine passes, maintaining a high level of military readiness, and by generally ensuring that they would be more trouble to invade than leave alone.
While trade and the economy are part of the Swiss calculus, I think that it has more to do with the particularist history of the various communes and cantons. The Swiss aren’t even governed by Zurich or Bern in the same way that an American is by New York and Washington. More to the point, the Swiss are proud of that fact and are willing to pay more in terms of prices for food, taxes for subsidies, and their own time for military service than lose the high level of local control they currently enjoy.
