The People are the Sovereign— a brief overview of Swiss History and Politics

(This was originally a lengthy comment to an article called “Switzerland’s Mind-Your-Own-Business Wisdom” by Lauren Reiff.)

Odes to Switzerland-as-free-market-utopia are badly misguided. Just because Swiss banks and business concerns are profitable and successful is not due to an “allegiance to economics over politics.” Politics, regulation and state subsidy loom larger over Swiss business and daily life than in most other developed nations. However, because of the decentralized nature of the Swiss social and political system, the people have greater control over how these state interventions are managed.

For an outsider (of which I am one), it is easy to look at Switzerland and the influence of its business concerns like Nestle, UBS, Rolex, Roche, Swiss Re, and so forth and conclude that the Swiss are great capitalists (they are) and that their skill is born in a boiling broth of free and unfettered markets (it isn’t).

For a better understanding, one must read Swiss history, which is not really widely discussed or published in English, which I think is a pity. There are a few fantastic books about Switzerland which anyone interested in the country should read: Why Switzerland? by Jonathan Steinberg is indispensable. The Naked Swiss by Clare O’Dea is good for piercing some of the stereotypes with which we tend to view the Alpine confederation, A History of Switzerland for the Swiss People is fascinating for its Switzerland as-taught-to Swiss-children-100-years-ago perspective, and Diccon Bewes’ Swiss Watching is a great perspective from an expatriate residing in contemporary Switzerland. For my part, I have studied the Swiss political and legal systems extensively as well as travelled extensively there over the past twenty years. My observations follow:

Historically, Switzerland tied its famous “neutrality” to a tacit alliance with France for over 200 years (roughly the 1500’s through the 1700’s). 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 the time — to the great benefit of the Confederates. Prior to that the various cantons were just another…