Why the Failing US and EU Should Follow the Swiss Government Model
The European Union and the United States should consider the successful freedom model of Swiss confederation government rather than the failed top down examples of other nations and empires. Few would question that Switzerland is the most secure, stable, and freedom-oriented nation in the world but it is time to ask what is so unique about the Swiss.
The answer is there is nothing particularly different about the nation or its people. They like to work hard, play hard and provide a good life for their families. So do the citizens of most other nations when given the opportunity.
They prefer peace and diplomacy to war and aggression but will fight to defend their independence and liberties. They prefer a stable currency, low taxes, financial privacy, economic prosperity and a government that represents and defends the people. Again, these are not unusual wants but few nations and governments provide an opportunity for these basic human needs and rights to flourish.
So why is Switzerland different? Here are some examples of why the Swiss government model works and the European Union and American Union have failed to deliver on their big-government utopian promises.
National Expansion By Voluntary Association vs Force — The term “Willensnation” is a Swiss concept of national growth and expansion by attraction through the voluntary association of neighboring principalities, cities, and individuals. This makes Switzerland a nation created by acts of free will rather than force. Growth by attraction of those willing to be part of the Helvetian Confederation rather than war and invasion have served the Swiss well over the last few hundred years of peace and prosperity.
How totally different from the American model of “manifest destiny” and military aggression which is how most of the national expansion of the United States took place. The growth of the Union was followed again by force with the outright invasion of the Southern states that decided to leave by Lincoln’s armies during the War Between the States.
The history of Europe has been far worse than the US both historically and now with the EU. Today the citizens in most European nations were never allowed the opportunity to vote on throwing away their national sovereignty and coming under EU rule. Whether these nations can voluntarily withdraw is still an open question.
Tax Competition vs Forced Tax Harmonization — In Switzerland the vast majority of taxes are collected at the canton (state) level while the federal income tax level is quite small and comparable to state tax rates in the United States. This allows different cantons and even localities in individual cantons to dramatically compete for residents, corporations, businesses and even retirees.
The tax difference can range over 20% of income from high-tax cantons like Zurich and Geneva to low-tax jurisdictions like Zug. Tax competition keeps the cantonal governments lean and productive and the politicians honest. Retirees from outside Switzerland can even create a type of low-bid competition for a set amount or percentage tax rate between cantons. This is the ultimate in tax competition.
In the US, there is little reason to move or locate businesses in specific states because the majority of the parasitic tax burden is universal at the federal level. The tax difference between the few states with no income tax and the others is minimal and with most states and cities on the verge of bankruptcy like the federal government, taxes will be rising everywhere.
It is the same with the failing European Union. The EU preference is a harmonized tax rate that guarantees a steady supply of revenue to governments and politicians and the ultimate goal is to end low-tax jurisdictions so there will be no tax competition. For example the EU requires a VAT tax of at least 15% in each country whether the nation or people want or need this burden on top of already crushing income tax rates.
Competing Currencies vs Currency Monopoly — In Switzerland, most retailers, hotels and restaurants will gladly price your purchase in Swiss francs or the Euro depending on your preference. Change is given in Swiss francs but the freedom to choose your preferred currency is usually available. Recently, in the Zurich train station, Burger King was even accepting dollars on a one to one basis with the Swiss franc.
Contrast Swiss currency competition to the silence from US political establishment when Ron Paul called for currency competition here in the US. Private entities like the Liberty Dollar people are threatened and imprisoned just for attempting to offer a gold and silver alternative to the Federal Reserve’s fiat paper dollars which have an intrinsic value of absolute zero.
Here the European Union nations do have a possible alternative to the Euro. Each nation should again issue their own currency and allow it to circulate with the Euro with each national central bank or treasury pegging the national currency in a range relative to the Euro just like the Swiss central bank does.
While much has been written about how the EU is threatened by the government debts and questionable accounting methods used by nations including Portugal, Ireland, Greece and Spain, why should the concern stop here? Today’s Greece, could be tomorrow’s UK, France and even the United States. Few of the western democracies have a monopoly on corrupt politicians or out-of-control national debts.
Ultimate Citizen Control vs Political Establishment — In Switzerland, the voters ultimately rule over the politicians and political elites due to the political rights of referendum and initiative. Is the majority always right, of course not as Thomas Jefferson warned about the dangers of democracy and mob rule but at least they aren’t always wrong like politicians controlled by special interests. Switzerland has a very weak “confederation model” central government with most of the programs, regulations and taxes handled at the local level. This way programs benefit the people rather than powerful federal politicians and interests like in most other nations.
Switzerland has a neutral non-interventionist foreign policy because this is the will of the people. This is why the Swiss waited 50 years to join the United Nations even though most of the UN organization is based in Geneva.
For similar reasons, this is why the Swiss have a stable currency, why individuals can buy stock in their central bank, why they have financial privacy and a low crime rate. The Swiss people demand this from their government or else the people will act. They can nullify a law or legislation by referendum or pass legislation through the right to actually create legislation and laws by-passing parliament with the right of initiative.
Again, this is a direct contrast to the United States where everything runs downhill from the federal government to the states, local jurisdictions and ultimate the people sort of like a political sewer system. Our representative democracy does not allow direct citizen control or oversight at the federal level and this is why the will of the people is usually ignored other than with false rhetoric at election time.
The EU should act as a decentralized confederation of sovereign states similar to the Swiss Confederation as did America’s first government, the Articles of Confederation if it wants to prosper and benefit the nations of Europe. Each nation should be given the opportunity to vote on membership, to have the option of maintaining their own currency and uniqueness of their nation.
Time to Look at a Successful Political Model — Both America and the upstart European Union would do well to look at the Swiss model of limited government over state jurisdictions rather than the failed dictatorial and fascist models which are all too prevalent in history. Freedom, liberty and independence have survived to a remarkable degree in Switzerland for hundreds of years despite the hatred and fear both near and far from nations and politicians more interested in looting their citizens than in promoting liberty and limited, efficient government.
We are in the death throes of the grand experiment of top down, special-interest-controlled government and fake prosperity based on unlimited debt. The time is up for Brussels, sell-out national politicians and Washington. I hope the political elites and international financial interests who screwed the people of the world and future generations all for short-term profits and political gains will be held accountable.
How About Freedom? — Finally, it is time for the nations and peoples of the world whether occupied by corrupt political elites or foreign troops to demand what the Swiss have had for centuries: a government of their own, controlled by the citizens that works to benefit the nation instead of outside interests. I truly believe unique Switzerland has the government model which holds the key to freedom, prosperity and independence for many nations in the world today.
Now is the time to work, build and restore a limited government which promotes freedom and free-markets rather than force in governing and solving problems. George Washington, Thomas Jefferson and our founding fathers would do no less and we can do no more.
Regards,
Ron Holland, Lew Rockwell.com
for Whiskey & Gunpowder
February 25, 2010
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Ron:
I’ve been to Switzerland several times. There are many things to like. There are also problems. The Swiss impress me as being a very unhappy people; almost sullen. I think they just committed contractual suicide by acceding to the IRS for depositor information. It’s a beautiful country to visit, but I certainly would not want to live there.
The article emphasis is on free markets as we define them in the vintage US Constitution. Of course, America should go back to those ideals if we can convince enough voters to select the right officeholders. One major drag on the economy is the $billions in money and thousands of hours spent by citizens to “comply” with the IRS. Fair Tax (H.R. 25) now has almost 70 co-sponsors in Congress and it would eliminate the IRS. Another major drag on the economy is the large international bankers that secretly take all of our money and spend it (who knows where?). H.R. 1207 – Audit the Fed – has already passed Congress and needs to come up for a vote in the Senate. Eliminating the Fed would assure that we will never again see the type of Banker and IRS drags that have killed America as we knew it. That is the only way that we will ever see the pro’s that you mention in your article about the Swiss.
My employment for most of my engineering-construction career was in sourced to America from a Swiss firm headquartered in Genève. I have told many of my Swiss colleagues about the FairTax & I hope that they do not beat us to implementing it. A point that is not mentioned in the article is the Swiss military involvement of every (male) citizen. The highest company official that I worked with in Switzerland was a Colonel in the Swiss army who was prepared to defend their borders until he was 50 years old. This compulsory military service instilled a pride in the Swiss that would help make the FairTax or similar plan more readily acceptable to them than in current day America.
While the primacy of Cantonal government in Switzerland can be overstated, there is one attribute it shares with a proposed national sales tax in the United States called the FairTax (HR25). In Switzerland, there is a single tax collection authority at the Canton level, the “Kantonales Steueramt,” that distributes revenues among the federal and the Cantonal governments. The Swiss citizen avoids the harassment Americans face of having to complete both a federal and one or more state income tax returns. The system also eliminates parallel and overlapping authorities that perform essentially the same function.
Under the FairTax, the IRS is eliminated, and the function of collecting the national sales tax is transferred to willing state tax authorities that already have the infrastructure in place. We would do well to emulate this aspect of Swiss federalism and adopt the FairTax, which would bring other benefits to America as well.
~Jim Bennett,
Suimmit, NJ
The Swiss have always impressed me as a rather elite and exclusive people. Well educated, culturally homogeneous. With universal military service there are automatic weapons in every home yet little crime. Hard to imagine that scenario in the US. They lack all the cultural benefits of our diversity, rap music, gang killings, welfare families, constant culture wars, etc. But they may console themselves with the excellent skiing available there.
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Interesting article with much to ponder. It is not complete – no article can be. A few questions or comments:
1) Neutrality is maintained by the absolute difficulty of the terrain – the country is protected by mountains and by universal conscription (see John Mc Phee’s book “La Place de la Concorde Suisse”)
2) Does Switzerland grant full citizenship to corporations – allowing them to be the elephant in the room of politics?
3) California has Initiative that is dominated by lobbying groups, industry associations, and corporations. Do the Swiss have such a one sided advocacy?
There may be lots of simple solutions to the corruption of Congress but it seems that without a revolution, the pigs at the table will continue to leave only scraps for the people. Maybe revolution is what this author is ultimately suggesting. It may take the same threats to business and government that occurred at the turn of the last century to affect change in this.
I am an outspoken proponent for Direct Democracy. It could and would work in the US I feel. We just have to be willing to trust in ourselves such as the Swiss have.
As for being isolationists. It worked well for the Swiss because they had nice tall mountains that made Switzerland just not worth the effort to invade. On top of that Switzerland posisitioned itself as an arbitrator and holder of secrets. Attempting to replicate that in the US is neither practical or even desirable. The world is just too small today. WMDs make it even smaller. Nor is manifest destiny a bad thing. While what was done to Natives is inexcusable it was not an innate part of manifest destiny. The Cherokee for example had started to asimilate into American culture. Had we used them for a model most of the genocide could have been avoided, and we’d had a larger population base/workforce to exploit that much sooner. That would have made America a power that much quicker.
Had we not expanded Westward America would be a small impoverished and embattled nation surrounded by enemies. The SW would be speaking Russian and the north would be part of Canada. Who knows what the mid section of the US would but it’d be far different than it is today. We were but one of many suiters for that land. If we hadn’t siezed California then the Russians who were eyeing it would have. Had they failed maybe it was France, England, China or Japan but somebody would be there today and it wouldn’t be Natives or Mexico. The end result is we’d been ourselves conquered eventually or constantly in danger of it. Manifest destiny was as much self defense as it was expansion. The framers of the doctrine understood that and it was a driver in the doctrine when it was adopted.
American efforts have freed tens of millions of people around the world. While I agree nation building is not in our best interests, promoting fredom and Democracy is. So too is fighting Socialism/Comunism and especially so combatting the prolifieration of WMDs. There will be no wold to isolate ourselves from if we do not act soon and take WMDs out everywhere they sprout in unstable/hostile nations. We must be ever vigilant against WMDs as there are far too many people who’ll happily use them. Even the Swiss are not immune from a bioloical plague or fallout from a nuclear exchange.
Even if by magic parts of the world suddenly think we are good guys and don’t intentionally target us, we’ll still feel the effects of nuclear proliferation. Tell me Iraq and Iran would not have used nukes on each other during their long running war. The Iraq’s used chemical weapons and the Iranians herded tens of thousands of Kurds including many children to run at machine gun nests in hopes of running them out of ammo so regular troops could move in. If either or both sides had nukes they’d been used. The resulting fallout alone would have polluted a large part of the world. More likely it’d drawn Russia into using nukes aggravating the problem as well as Isreal likely getting dragged in which would have dragged in much of the rest of the world. The world is just too small and the dangers too great to stick our heads in the sand.
In conclusion wisdom and forsight are the key. We have been involved in places we shouldn’t have and failed to act in places we needed too. We need the courage to act decisively when necessary and the restraint to stand back when it’s best for us to not be involved. We need to decide by principle rather than the politics that has ruled our foreign policy for so long.