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The Swiss model

Raising issues like non-intervenionist foreign policy on a site like this is a bit like poking a bear with a stick: potentially hazardous. In my recent item on WW2, the issue surfaced again of whether a viable foreign policy for a nation is the “Swiss model” (no, not that kind). I personally doubt it works for all nations, certainly not the largest ones with long, porous borders. But as I have praised tax havens recently, I am reminded of how the Swiss seem to cope very well thankyou outside a surpranational organisation like the EU or a military alliance like NATO. But is that country what economists call a “free rider” – taking advantage of the fact that other, bigger nations have done the heavy lifting in standing up to tyrants, etc?

43 comments to The Swiss model

  • Andy H

    Is Switzerland free-riding?

    Yes, I think it is fair to say that the Swiss have benefited from the actions of bigger nations in eliminating tyrants.

    Personally I think non-interventionism is viable for most nations, most of the time, it’s just rarely optimal.

  • Gorgasal

    The Swiss were quite aware during the Cold War that they were seen as part of the West by the Soviets and accordingly, trained far more to deal with a Warsaw Pact invasion (through overrun Austria, Italy or Germany) than NATO. This makes sense to me.

    Thus, the question of their free-riding is reduced to whether the Soviets would have moved west without NATO, the US missile shield and/or German rearmament. This can be subject to debate.

    In my opinion, the Swiss certainly free-rode.

  • RAB

    The Swiss have always been the holders of the coats in the playground scraps of history.
    Done nicely out of it too.

  • A few points to note:

    1. The Swiss are quite right to stay out of the EU but that hasn’t stopped the EU (and the USA) from pressurising the Swiss into compromising their banking laws.

    2. Switzerland is not a free market haven. The tax and regulatory regime for its own citizens is comparable to that of any other developed nation.

    3. Neutrality only works if it is respected. At the outbreak of WWII, Holland, Belgium and, I believe Denmark, all declared neutrality. Much good it did them!

  • Switzerland – 600 years of civilisation and their contribution to mankind is the cuckoo clock and Toblerone.

  • John K

    Switzerland – 600 years of civilisation and their contribution to mankind is the cuckoo clock and Toblerone.

    I prefer to thank them for the SIG automatic pistol.

  • Jacob

    I think non-interventionism is the only viable option for Switzerland and all small, sensible nations.
    You wouldn’t expect Switzerland to declare war on or try to conquer Germany, France or Italy. Nor to fight Japan or China.
    But it could contribute a contingent to Afghanistan like, say, Romania or Latvia. It prefers not to (as far as I know), so it is a free rider.

    The main point, though, is that Switzerland cannot be considered as a role example for non-intervention. The rules that apply to small, weak, countries, and the policies that make sense for them don’t apply to big powers.

  • Timothy

    Switzerland may not stand up to tyrants (unless they violate Swiss neutrality) but they also have a record of hundreds of years of not being tyrants. Countries which have been agressors in the past (ie. almost all of them) have greater obligation to spend their blood and treasure in stopping current tyrants than those which have not. I remain amazed that Switzerland, with a majority or plurality of German speakers, did not actively side with the Nazis in the war, and think that they deserve the right to continue their neutrality for that reason alone.

  • Timothy

    Switzerland may not stand up to tyrants (unless they violate Swiss neutrality) but they also have a record of hundreds of years of not being tyrants. Countries which have been agressors in the past (ie. almost all of them) have greater obligation to spend their blood and treasure in stopping current tyrants than those which have not. I remain amazed that Switzerland, with a majority or plurality of German speakers, did not actively side with the Nazis in the war, and think that they deserve the right to continue their neutrality for that reason alone.

  • The Swiss have been free riding for 500 years on their mountains, too. The geography of the country simply makes it a hard place to invade, and so relatively few people have tried.

    I will second Timothy’s comment about the Swiss not being tyrants themselves. “Swiss” has always been a good thing to be.

  • Stan

    The Swiss did not peruse a policy of creating secure and highly defensible borders. That decision was made for them by aggressive neighbors. They did not seek to create an economic union of their neighbors, nor to my knowledge do they seek to make demands (expect for their own independence) on what shape that union should take. No one is required to do their banking, skiing or R&D in Switzerland, but you choose to do so any way.

    To declare the Swiss free riders is to lay upon them an obligation they did not seek. Imagine that I were to declare some public good and then via some dubious line of reasoning project a perceived obligation on you. That my friends is called rent seeking.

  • Also worth noting is the fact that Switzerland is one of only two European countries that managed to get through the 20th Century without suffering foreign occupation, domestic dictatorship or revolution (the other being Sweden).

  • Andy

    Thaddeus, I take it you mean Mainland European countries? I don’t recall theThe UK didn’t suffer any of those three calamaties.

  • get through the 20th Century

    You must be kidding.
    The last time there was a war on Swiss soil was about in the 14th century.

  • Jacob: Er, no. Switzerland was conquered by Napoleonic France, and had its independence and neutrality re-recognised by the Congress of Vienna in 1815. So the last war on Swiss soil was slightly less than 200 years ago. That’s still a long time

  • Andy,

    I do not regard Britain as part of Europe. However, if you do then, yes, please read mainland or continental Europe.

  • Michael,
    Correct. I was mistaken.

  • It helps to maintain neutrality, during times of strife,if you are the country where the protagonists keep their money.

  • lucklucky

    What would happened to Switzerland if Hitler or the Soviets would have won the WW2 or Cold War? Yes they are free riders.

  • matt

    What would happened to Switzerland if Hitler or the Soviets would have won the WW2 or Cold War? Yes they are free riders.

    What would have happened to Hitler or the Soviets if they tried to invade Switzerland to finish out their victory?

    I suspect they’d both have been turned back after expending considerable effort, and the example of the Soviets in Afghanistan shows how fatal that can be for an aspiring empire.

    The mountains are a notoriously difficult place for flatlanders to fight, and the heavy concentration of automatic weapons wouldn’t have made it any easier.

    The Swiss think outside the box when it comes to defending themselves, but I don’t think there’s some mythical standard of militarism that they fail to meet.

  • Bogdan of Australia

    On the basic level; their neutrality is like that of a strong, big man who turns his head away when seing a woman or a child being raped and bashed by another strong, big and vicious man. They wouldn’t be so neutral if they were to live a bit further East, like Romania, Bulgaria, Poland, Estonia, Lithuania and so many others. Those countries also dream about being neutral. Take last year Estonia’s experience with the Neo-Soviet Russia for example… Yes, Switzerland benefited doubly from her “neutrality”; once, by turning head away when others have suffered, and spending little on fighting those who have caused that suffering, and then attracting all those money the criminals of the wide world have deposited in her banks. One can NEVER stop wondering how much of the Switzerland’s wealth is build on the dirty cash from abroad. In reality, all those beautiful, postcard-picture landscapes, mountains, gorges, turquise lakes, waterfalls, greeen forrest serve as a cover for their morally bancrupt inhabitans. It is like a glossy paper that is being wrapped arround blob of excrements. From afar it loks beautiful, but when you take a closer look, it smells badly…

  • joel

    I think the mountains have a lot to do with their neutrality.

    Also, they are armed to the teeth. Switzerland is designed to deter aggression.

    That said, having been surrounded by German held territory in WW II. they had to be not hostile to the Germans. Only made sense. They could have been starved out. What good would that have done anyone?

    And what does Switzerland have to steal? Do they have wheat or oil?

    Why the heck should anyone get involved in any war if they can avoid it?

    I salute the Swiss for commonsense.

  • nick gray

    Bogdan does not speak for all Australians!!!
    I admire many things about Switzerland, but the best thing is their Confederation. The Cantons really are independent, and the Federal Government is very limited in what it can do.
    Switzerland shows that Libertarian principles can work in reality, with central governments being weak. I find that admirable.
    As for Switzerland turning away when the Nazies invaded Europe, that would have been because of its’ military weakness. As a defensive power, it was strong, but not offensive. Yes, they could have, and should have, done more to help the jews, but that could be said of many nations.

  • I’m not so sure about the Mountain Fortress bit. The mountainous bits of Switzerland are in the south and aren’t where most of the people live. The Wehrmacht, or the victorious Red Army having first overrun southern Germany, would have taken a day or two to cross the Rhine and reach Zurich, Bern and Basel. (Half an hour in the case of Basel)

    Sure, the Swiss Nation Of Rfilemen culture – a Swiss colleague was explaining his personal arsenal to me just yesterday, including a full automatic light machine gun – would have meant losses. But the important bits of the country where the people actually live aren’t as impregnable as the Swiss would like everybody to believe.

  • Sunfish

    Bogdan of Australia said:

    On the basic level; their neutrality is like that of a strong, big man who turns his head away when seing a woman or a child being raped and bashed by another strong, big and vicious man.

    You think?

    The man who turns away in your example is an individual person. He’s capable of making his own decisions and being responsible for them, and so it’s perfectly fair to judge him as a selfish ass when he does as you describe.

    Switzerland is a little different. It’s not a person. It’s a state, which means a huge aggregation of people. Some of them are probably exactly as you describe, others would have wanted to saddle up and ride east, and still others would want something else entirely. One’s not likely to get a simple decision from a group, and especially not a democratic group[1], as to whether to get involved when they can’t agree as to whether it’s their fight or not.

    And when the pox populi speaks, eventually, you risk tarnishing everyone in Switzerland with the fact that some of them turned out to be bastards.

    I don’t know whether I disagree or not, but I don’t think your analogy works. The analogy and the reality are just too different IMHO.

    [1] Not to defend autocrats: they’re good at making decisions, and especially really bad decisions.

  • Gabriel

    On the basic level; their neutrality is like that of a strong, big man who turns his head away when seing a woman or a child being raped and bashed by another strong, big and vicious man.

    A more exact analogy for the Swiss in WW2 would be that the woman had already repeatedly begged entrance to big strong man (1)’s home and he her to get lost. Then when she was dead on the ground he walked over and pulled out all her gold teeth. Then he acted like a self-righteous prick for the next 50 years on account of not being a warmonger.

  • The important point to stress when arguing with isolationist libertarians, is that the Swiss model of neutrality isn’t applicable to other nations, like say Britain or the US.
    What may make sense, to some degree, for a small nation in Switzerland’s unique Geo-Political situation, doesn’t apply to other nations. It is utterly dumb to bring Switzerland as an example the US can, or should, emulate.

  • Paul Marks

    Had Hitler won World War II the Swiss would not have been left free – and nor would their defence measures have worked.

    And had the Soviets taken over Europe, Switzerland would also have fallen – and again their defence measures would not have worked.

    But this is not to say that the Swiss acted wrongly in World War II.

    The Swiss could not have defeated Nazi Germany – so keeping out of the war (in the hope that the Allies would eventually defeat Nazi Germany) was the correct policy in the geographical and military situation the Swiss found themselves in.

    However, if the United States followed the same policy Nazi Germany would not have been defeated. And after everywhere else had fallen to the Axis power the United States would also have fallen (standing alone would not have worked – not with the resources of the entire world in enemy hands).

    The Vulcans would not have come down and saved the world – because the Vulcans do not exist.

    The same is true of the Cold War.

  • Paul Marks

    Had Hitler won World War II the Swiss would not have been left free – and nor would their defence measures have worked.

    And had the Soviets taken over Europe, Switzerland would also have fallen – and again their defence measures would not have worked.

    But this is not to say that the Swiss acted wrongly in World War II.

    The Swiss could not have defeated Nazi Germany – so keeping out of the war (in the hope that the Allies would eventually defeat Nazi Germany) was the correct policy in the geographical and military situation the Swiss found themselves in.

    However, if the United States followed the same policy Nazi Germany would not have been defeated. And after everywhere else had fallen to the Axis power the United States would also have fallen (standing alone would not have worked – not with the resources of the entire world in enemy hands).

    The Vulcans would not have come down and saved the world – because the Vulcans do not exist.

    The same is true of the Cold War.

  • matt

    However, if the United States followed the same policy Nazi Germany would not have been defeated. And after everywhere else had fallen to the Axis power the United States would also have fallen (standing alone would not have worked – not with the resources of the entire world in enemy hands).

    Even a glance at the science of economics is enough to tell us that the Third Reich would have used the world’s resources inefficiently, and that their market planning would have crippled their attempts at keeping a world-wide empire together.

    Also, the occupied countries would have all resisted, and eventually brought the axis down from the inside. We know they would have spread themselves too thin FAR before they had encircled the globe, and it’s also likely that they’d have clashed with the Japanese before it was all said and done.

    Interventionists often paint terrible nightmare-scapes about how we’d all have ended up speaking german, but they overlook the fundamental difficulties that empires on the make face and always end up succumbing to.

    All the better for casting faux-heroic poses about today’s wars, I suppose.

  • Er, she’s(Link) not Swiss, but Russian. Not the same thing at all.

  • That last was just a check to see if I could copy links into comments here, being just a bit stupid as I am. But she’s obviously Russian, even if she was born in Switzerland.

  • On more serious matters….

    Nazi Germany was defeated because we here bought 411 days of time. Yes, the USSR paid in blood, and the USA brought some money, and industrial capacity beyond the reach of even our own bombers (if we had gone down) let alone the FW-Condors.

    We cannot say whether for example Canada and the other parts of the Old White Commonwealth would have gone down either. But possibly.

    The Nazi plans for atomic research were found after 1945 to not be well advanced. This gives hope.

    But I also don’t think Switzerland would have survived long with its independence, in a Europe entirely controlled by Hitler, including the UK and, crucially, Ireland. Think about it.

  • matt

    Mr. Davis,

    My question to you is whether or not you think Hitler could have survived for very long in a Europe dominated by Hitler.

    I just don’t think that oppressive societies are sustainable for very long without outside assistance, and Hitler the conqueror would have had no place to look for that assistance.

  • jk

    I appreciated their neutrality until they came out against the Iraq War. It seems that they can be neutral against Hitler, Lenin, Stalin, Khrushchev, &c. — but against George Bush they had to take a stand.


  • but against George Bush they had to take a stand.

    That’s the Swiss model in a nutshell – be neutral towards those that threaten you, that might hit you. About those that don’t threaten you, you are free to take a stand. Or, maybe they feel more threatened by the Arabs than by the US, which is correct.

  • M

    The important point to stress when arguing with isolationist libertarians, is that the Swiss model of neutrality isn’t applicable to other nations, like say Britain or the US.

    Swiss style localised governance is probably not applicable in the US or Britain either.

  • M

    Just to add: To maintain a huge military and oversee worldwide military commitments, you need a strong, centralised state. That’s why America cannot be like Switzerland. You can’t let individual states go about mucking it all up. It is no wonder ‘states rights’ are largely meaningless in the US of 2008.

  • joel

    Just read a book called the Wages of Destruction. Essentially, it was about the Nazi WW II economy.

    The Nazi’s were reasonably efficient. Their problem was, not yet mentioned in this thread, is that Western Europe has to import to survive, food and fuel.

    Thus, with the English Navy blockading the continent, the Germans were faced with an unsustainable situation. The population of Europe could not be fed, nor could European industries operate, without trade with Eastern Europe, England, Asia, or North America.

    We have been shown over and over how the Nazi’s starved their prisoners and foreign workers. What we are never told is why they starved them. It was the English blockade. There was simply not enough food. And it wasn’t due to the war economy either. Western Europe simply couldn’t grow enough food.

    Hitler found himself in the exact same situation as Napoleon. Both Napoleon and Hitler then chose to attack a nominal ally, Russia, with the same disasterous results.

    Nazi German, for example, had come to depend on imports from Russia of food and fuel. Hitler used that as an excuse to attack Russia, maintaining that Russia would eventually use that leverage to control Germany.

    So, all the talk about long term German control of Western Europe was just an unsustainable pipe dream, as long as England was hostile and maintained the naval blockade of
    Europe.

    Just a shame that many millions had to die to demonstrate that.

  • Midwesterner

    My question to you is whether or not you think Hitler could have survived for very long in a Europe dominated by Hitler.

    He would have had the life expectancy of say, Lenin. And then he would have been replaced by a German Stalin.

  • Paul Marks

    Matt:

    You are making a mistake that intelligent people have been making for centuries.

    For example, the belief that those blood crazed French Revolutionaries could not possibly be a threat – after their actions (hyper inflation and nationalizing every factory in the country) will create economic chaos in the long term.

    Chaos even in the short term – but not WEAKNESS.

    In the short term grapping hold of everything and running into the ground is a way to INCREASE power.

    Carnot (the “organzer of victory”) equiped MILLIONS of troops – impossible numbers by the standards of the 1790’s and overwhelmed the old armies of Europe.

    In the long term the little Emperor grabbed power and handed back a lot of production to private enterprise, and resestablished sound money (because the thing could not go on for ever) – but it was Hell while it lasted.

    And.

    Nazi Germany allowed a lot of private enterprise – perhaps not as much as the New Deal United States (although New Deal America was hardly a free market place either).

    So Nazi German would have had no great difficulty in crushing the United States – had Nazi Germany been allowed to take over the resources of the world.

    Even the Soviet Union managed to use the natural resources at its command to deadly effect (at least over a few decades) had the Soviet Union had the resources of the whole Earth – it would also have CRUSHED THE UNITED STATES.

    This America First we can ignore the rest of the world stuff is simply wrong – Ludwig Von Mises understood that, even is some of his self proclaimed followers do not.

  • Paul Marks

    Matt:

    You are making a mistake that intelligent people have been making for centuries.

    For example, the belief that those blood crazed French Revolutionaries could not possibly be a threat – after their actions (hyper inflation and nationalizing every factory in the country) will create economic chaos in the long term.

    Chaos even in the short term – but not WEAKNESS.

    In the short term grapping hold of everything and running into the ground is a way to INCREASE power.

    Carnot (the “organzer of victory”) equiped MILLIONS of troops – impossible numbers by the standards of the 1790’s and overwhelmed the old armies of Europe.

    In the long term the little Emperor grabbed power and handed back a lot of production to private enterprise, and resestablished sound money (because the thing could not go on for ever) – but it was Hell while it lasted.

    And.

    Nazi Germany allowed a lot of private enterprise – perhaps not as much as the New Deal United States (although New Deal America was hardly a free market place either).

    So Nazi German would have had no great difficulty in crushing the United States – had Nazi Germany been allowed to take over the resources of the world.

    Even the Soviet Union managed to use the natural resources at its command to deadly effect (at least over a few decades) had the Soviet Union had the resources of the whole Earth – it would also have CRUSHED THE UNITED STATES.

    This America First we can ignore the rest of the world stuff is simply wrong – Ludwig Von Mises understood that, even is some of his self proclaimed followers do not.

  • joel

    About Russia crushing the USA.

    At the end of WW II, the Russians organized a big parade for May Day. Krushchev was embarrassed that all the Russian artillery (The stuff that won the war. Read about it.) rolled by on chassis made by Studebaker.

    US aid was instrumental in keeping Russia in the war.

    The United States industrial might was beyond belief during WW II.