Chapter 10 -
Switzerland: is
Still #1 in Liberty, Direct Democracy & As a Financial Center
Talking Points:
Politicians hate Switzerland because of their confederation type of
limited government, which is still controlled by the people. For
this reason, and many others, investors love Switzerland. Learn how
their limited central government, financial confidentiality and
non-aggressive foreign policy have made Switzerland the leading
wealth preservation jurisdiction in the world.
"Switzerland has the respect of the world for its stability, safety,
and peacefulness. How is it that this tiny country, measuring only
137 by 216 miles, with almost no natural resources, has the world's
strongest currency? Has the second highest per capita income in the
world and is the third largest financial center in the world,
managing private assets of more than 2 trillion Swiss francs?"
-- Swiss Money Secrets, The Oxford Club
www.oxfordclub.com
Why Investors Love and
Politicians Hate Switzerland
Switzerland is
the most hated nation on the face of the earth by politicians,
bureaucrats, lawyers and tax authorities. How does the old saying
go, “the enemy of my enemy is my friend”? Productive individuals
around the world who prefer limited government and honor private
property rights view Switzerland very favorably. The Swiss
government is a shining example of how a decentralized confederation
government, one that still respects individual and cantonal (states)
rights, can create one of the highest standards of living in the
world.
The truth of
the matter is that many investors prefer Switzerland and the Swiss
franc, while most governments do not. Politicians and others out to
plunder after the private wealth of productive citizens look at the
time-honored Swiss traditions of independence, financial privacy,
and limited government as obstacles in their path of looting and
pillage. Lawyers, especially in the United States, hate Switzerland
because of the asset protection features built into their insurance
and annuity products through ironclad Swiss insurance regulations.
This small
country is loved by her patriotic citizens and by knowledgeable
world investors that choose Switzerland and the Swiss franc, along
with the Euro, as the currency of choice for their personal safe
haven of wealth. Although the Swiss voters have ended the statutory
gold backing of the Swiss franc, Switzerland has continued to
maintain substantial gold reserves. It is important to realize that
their currency strengthens when the dollar weakens.
Political dissidents and over-taxed citizens around the world
also appreciate Swiss political neutrality and the importance of
Swiss banking confidentiality. Wealthy citizens hounded by
unscrupulous lawyers and corrupt legal systems that determine guilt
by one’s ability to pay, appreciate Switzerland’s respect for
private wealth and its honest legal system, which has little in
common with the lawsuit mania driven U.S. court system.
Other central
governments and political establishments that over-tax and
over-regulate their citizens despise Switzerland’s confederation
form of limited government. The Swiss practice of armed neutrality
is often an embarrassment to governments, such as Washington, that
attempt to enforce foreign policy through armed intervention and
invasion around the world. Legal predators and corrupt legal systems
hate the rule of law in Switzerland that still protects wealth and
assets from their attempts at plunder through vindictive lawsuits
and unwarranted asset seizures.
Although
financial services and investment performance are generally
comparable everywhere in today’s global investment world,
Switzerland’s unique benefits of a relatively strong Swiss franc, a
measure of asset protection from lawsuits, and a degree of financial
confidentiality remain the envy of outside financial competitors and
greedy revenue-starved governments around the world.
The Benefits of a True
Confederation Form of Government
This alpine
territory is quite small - comparable in size to the state of South
Carolina - but it is home to over 7 million people, including some
1½ million foreign nationals residing or working there. Switzerland
has four official languages that reflect neighboring cultures. Some
two-thirds of the Swiss speak German dialects, while 19% speak
French, 8% Italian and 1% Romanisch, a dialect similar to Latin.
Roman Catholics account for 48% of the population and Protestants
some 44%.
These people,
with such diverse backgrounds have learned to live together
peacefully and without discord. They have built and maintained a
country that emphasizes real freedom and prosperity through it’s
unique form of government. Their confederation government structure
is decentralized with most of the power residing at the canton
(similar to our states) and local levels. An often-overlooked point
in history is that the Swiss Confederation form of government
strongly influenced America’s founding fathers and the structure of
early American government. In fact, our first governing document,
The Articles of Confederation, closely resembled the governmental
design of the Swiss Helvetian Confederation.
Switzerland has
retained this decentralized form of limited government when most
nations, including the U.S., have moved toward a strong federal
system. They have maintained this model simply because the Swiss
citizens would not allow this loss of political freedom
from themselves or their local and
cantonal governments. The Swiss political structure is
specifically designed to prevent the development of an all-powerful
federal government like has developed in the United States.
Their
governmental structure delicately balances the rights of the
individual with the interests of the communes (villages), the city,
the canton (state), and the federal government. Parliament is
comprised of two chambers, with representatives from each of the 26
cantons representing a dozen different political parties.
A Limited Federal
Government By the People and For the People
Despite the
diversity in languages and cultures, Switzerland remains a stable
and unified society with the world’s oldest surviving
democracy—besides the Tynwald Parliament in the Isle of Man. Through
a direct participatory form of democratic government, ordinary Swiss
citizens decide on important constitutional issues as well as local
ordinances. Every Swiss citizen has a direct say on how the
government is run by the ability to show his or her support (or
non-support) for government actions. The Swiss have in practice, not
just in theory, a government controlled ultimately by the people.
To further protect the
rights of the individual Swiss citizens three political safeguards
are built into the system to assure that the people rule the
government and not the other way around.
1. A Weak Chief
Executive -
Can you name the President of Switzerland? Probably not. In fact,
very few Swiss citizens would even be able to give the correct
answer. In contrast to the United States, where our Chief Executive
is constantly in the news, and usually for the wrong reasons, the
Swiss do not make a profession or big deal out of politics.
The President
of Switzerland can often be found riding to work on the public
streetcars in Berne, Switzerland’s capital. Their executive branch
of government is a collegial system, which prevents the rise of a
strong chief executive and it strives for political consensus rather
than confrontation. The Swiss federal government is weak by design –
and that’s just the way the Swiss want to keep it.
2. The Right of
Referendum
- The Swiss people fortunately have the Right of Referendum that
gives them an opportunity to oppose any law passed by Parliament or
enacted by the government. If 50,000 voters, a little more than 1%
of the electorate, sign a petition questioning a particular law
passed by the government, the law must be submitted to a popular
vote for final approval. The law is then rescinded if more than 50%
of the voters oppose it. Any proposed change in the Swiss
Constitution also requires a referendum.
Harry Browne, a
good friend of mine, is a financial writer and former resident of
Switzerland. He is also a two-time American Presidential Candidate
of the Libertarian Party. Browne noted that in Switzerland,
referenda occur much more frequently than the two-year election
cycle found in many states of the U.S. "Once a matter qualifies for
a referendum, the vote will be taken soon afterward. So these votes
are sprinkled throughout the year, and they happen not only at the
federal level, but at the cantonal and city levels as well." This is
in direct contrast to the U.S. where public pressure against
legislation must be directed through elected representatives who are
subject to massive pressure by special interest groups.
3. The Right of
Initiative
- Switzerland’s concept of the Right of Initiative is unique in the
entire world today. It allows the Swiss citizens the opportunity to
actually initiate legislation directly. When 100,000 signatures are
obtained for a particular proposal, a national election is held to
approve or reject the proposed law, assuming the proposed law meets
certain legal standards.
Investor Benefits of
Swiss Foreign Policy and World Famous Financial Center
"We
will attack no one, participate in no war, will make no alliance,
and will defend ourselves".
--
The Swiss Code of Neutrality as first drafted in 1515
An important
cornerstone in Swiss history involves national security. Switzerland
places its safety and security above all other considerations.
Although Switzerland has recently voted to join the United Nations,
it is not a member of NATO, the European Union, and more
importantly, is not directly influenced by the political decisions
of these international bodies. As a neutral country, Switzerland
plays an important role in world politics as an unbiased peaceful
site for diplomatic negotiations and as a base for international
agencies such as the International Labor Organization and the World
Health Organization, located in Geneva.
Neutrality Combined
With Military Strength
The Swiss
people have guarded their national independence through a strict
policy of armed neutrality. This policy has produced the largest
(mostly civilian) army in Western Europe when mobilized, and has
saved Switzerland from destabilizing involvement in both major 20th
century world wars and numerous conflicts.
The Swiss
believe neutrality is best achieved by a strong nation rather than a
weak one. Within 48 hours the country can mobilize an army of over
500,000 soldiers, 800 battle tanks, 300 jet fighters, plus missiles
and artillery - all stored in hundreds of defense positions and
underground fortresses. Switzerland has armed sentries at all border
crossings and there are over 3,000 points of demolition on bridges
and tunnels to destroy paths of invasion or other access. Most of
this defense structure is invisible. Carefully camouflaged into
mountainsides are arsenals, hospitals, airplane hangers, with their
interstate highways are often designed to serve as emergency air
runways.
All able-bodied
men between the ages of 20 and 50 serve in the army and are trained
for specific jobs. In the event of war or other national emergency,
the Swiss can also call upon 520,000 trained civil defense workers.
They can provide protection to over 90% of the Swiss population in
shelters that are designed to withstand nuclear, biological and
chemical attack. Even if Switzerland were a target for terrorist
weapons of mass destruction, which it certainly is not, most of its
citizens have access to protection - unlike in the United States.
Ron
Fact, Book & Video Recommendations For This Page:
The nation of Switzerland is the only limited
government, decentralized confederation on the planet. In
Switzerland, due to their direct democracy political system, the
citizens still control the government rather than the other way
around as in the United States. America needs to return to a limited
republic and confederation government as we had under the Articles
of Confederation if we have any chance to return political power
from the special interests back to the individual citizens. - Ron
Holland
Target
Switzerland: Swiss Armed Neutrality in World War II by Stephen
P. Halbrook. He vigorously and, inevitably, controversially argues a
conservative defense agenda with his thesis that Switzerland's
federal system, which lacks a central authority capable of
surrendering the country, and its militia-based defense (shades of
the Minutemen, the Second Amendment, and the NRA!) effectively
enabled Swiss neutrality during World War II. He offers much
evidence that the Swiss armed and equipped themselves at
considerable cost to defend their independence, for which most of
them were prepared to fight even against the might of the Wehrmacht.
La
Place De LA Concorde Suisse
by John McPhee. Anyone who has ever traveled in Switzerland cannot
help but to have remarked upon the overwhelming tranquility of the
country. But this tranquility is illusory. As John McPhee writes in
La Place de la Concorde Suisse, a rich journalistic study of
the Swiss Army's role in Swiss society, "there is scarcely a scene
in Switzerland that is not ready to erupt in fire to repel an
invasive war." With a population smaller than New Jersey's,
Switzerland has a standing army of 650,000 ready to be mobilized in
less than 48 hours. The Swiss Army, known in this country chiefly
for its little red pocketknives, is so quietly efficient at the arts
of war that the Israelis carefully patterned their own military on
the Swiss model. You'll understand why after reading this
outstanding book.
The book is a little dated but if
you want to understand the military defense of Switzerland, you
should read this book.
The Swiss
Confederation Institute News
For daily updated news,
editorials and reports relating to topics
covered in The Swiss Preserve Solution.
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