The Swiss have 4 national languages (and really, English is an unofficial national language). There is a sharp political divide between the more liberal French speaking cantons (similar to US states) and the more conservative German speaking cantons. In a continent in which political, religious, and ethnic differences have led to bloodbaths, how do they manage to build wealth that is the envy of Europe?
For one thing, they stay out of wars. I was a big time war hawk on Iraq/Afghanistan at one point, now I've rethought that for the past 5 years or so. Death and destruction are not effective tools for economic growth. Sure, there's a time to fight, but staying out of war is best - maybe later I can expand on this.
However, in my opinion, the major reason is that Switzerland is the federalist country that the USA wishes it was. The cantons hold much more power than the federal government. As an example, my federal taxes here are very low, on the order of 3%. The cantonal and communal taxes (yes, we pay local taxes too) are probably about 10-12%. This, to me, is preferable for two reasons - communes and cantons have to compete for taxpayers (individuals and businesses), and therefore adjust their rates accordingly. The federal government would feel no such pressure. Canton Schwyz, for example, would probably tax me at less than 5%! Nice canton too, maybe we should look into moving... [added later, forgot to add this] The second reason is that taxes paid locally and on the cantonal level are far more likely to benefit the taxpayer than the taxes paid to Bern. This reduces the likelihood of government waste, because it essentially places the product (taxpayer funded crap) closer to the customer (taxpayer). It creates a high level of civic engagement too, which I find refreshing.
This is just one example. Sure, the Swiss have some economic quirks I find irritating - for example, they are highly protectionist and therefore meat prices are unbelievably high. But overall, it's a great example of how federalism should work. The Swiss are a people proud of certain uniting characteristics - Alpine culture, banking secrecy, neutrality - and use these to unite their federation of cantons in spite of the enormous differences that exist, particularly language.
I'll try and post more on observations from Europe. I think I've gotten to know, in particular, the German (and German speaking) mindset. Till then - Tschüss!
2 comments:
Great post Tim. It is interesting to learn your perspective on things from and about there. Certainly the type of federalism in Switzerland is much enviable to here where the federal government does nothing but grow, kick the can down the road and tax, tax, tax. The unfortunate thing with war is that modern touchy-feely administrations like ours cannot prudently achieve the ultimate aim. Kill people and break stuff in order to get rid of undesirables. Then leave.
I think we used to have that kind of state autonomy, but the power has just been shifting to DC ever so slowly - beginning with Lincoln, and greatly accelerated by guys like Wilson and FDR.
Not saying the Swiss don't have fiscal problems, but with their (more) federalist system, problems tend to be more diffuse and this reduces risk as a whole.
When it comes to war - I've become a bit of a Ron Paul acolyte (so as an aside, all fiat currencies, including the Swiss', are destined for failure). It's probably the subject of another post, and I'm not sure I can completely defend an anti-war stance, but in theory, war is purely destructive and doesn't do anything to raise the overall standard of living. I've gotta spend some time thinking this through though, to see if what I feel can be better reconciled logically.
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