Swiss Euro-scepticism

Motto: «You can’t go slow enough in the wrong direction.»
Jörg Baumberger

I would like to begin with the fable of «The fairly intelligent fly», invented by the American writer James Thurber, and which expresses very well the scepticism of those who are modest about the intentions of the high and the mighty:

A large spider in an old house built a beautiful web in which to catch flies. Every time a fly landed on the web and was entangled in it, the spider devoured him, so that when another fly came along he would think the web was a safe and quiet place in which to rest. One day a fairly intelligent fly buzzed around above the web so long without landing that the spider appeared and said, «Come on down». But the fly was too clever for him and said, «I never land when I don’t see other flies, and I don’t see other flies in your house». So he flew away until he came to a place where there were a great many other flies. He was about to settle down among them, when a bee buzzed up and said, «Hold it, stupid, that’s flypaper. All those flies are trapped». «Don’t by silly», said the fly, «they’re dancing». So he settled down and became stuck to the flypaper with all the other flies. Moral: There is no safety in numbers, or in anything else.

Swiss entry into the European Economic Area was rejected on December 6, 1992, by a narrow majority of the people and a solid majority of the cantons. Current polls show a majority in favour of joining the EU amongst the centre-right parties and the social democrats, as well as in the French-speaking cantons. Scepticism seems highest in conservative and traditionally nationalist groups, amongst the greens, in regional parties and on the far left. Those against are a very heterogeneous group, as was the case in France at the time of the Maastricht referendum there. I would like to say from the start that I myself am among the sceptics about entry, but I do not defend the arguments of the conservative nationalists or the green regionalists and «minarchists» – although I do have a slight preference for the latter. My own scepticism is directed towards what I regard as a much too centralist and interventionist big organisation. I have no wish to emerge from the straitjacket of Swiss protectionism simply to enter the cage of Euro-protectionism. It may be thought surprising in this respect that the traditionally anti-centralist French-speaking cantons should be broadly in favour of Brussels. But of course, Brussels is substantially farther away than Berne. That is more or less the same philosophy that we know from the Euro-regionalist groups. Their motto is: «Skip the mediator» (the nation-state) – a good but rather a dangerous motto.

My own personal ideals are universalist and global. They are better looked after by the WTO than by the EU. Although the latter also claims to favour the WTO’s philosophy of free trade, it started its career in the form of a protectionist cartel for coal and steel producers.

A friend of mine made the following remark to me about the possibility of Switzerland entering the European Union: «If the EU stays faithful to the WTO, Switzerland doesn’t need to join; if it does not, Switzerland ought not to join.»

As a classical liberal, my ideals concerning economics are in favour of a globally interwoven «commonwealth», but as a «homo politicus» I am much nearer the Schumacher maxim, «Small is beautiful», and Jacob Burckhardt’s idea that «power is an evil in itself». (We find the same idea in Lord Acton’s work.)

As a global thinking and open minded Euro-sceptic I belong to a relatively small group of classical liberal thinkers which is by no means representative of public opinion as a whole – and does not even cover all members of the board of the «Liberales Institut».

In the German-speaking cantons there has been large group of voters in favour of European Economic Area (EEA) membership because this directly concerns economic integration but is at the same time against the political implications of EU member¬ship. The federal government has clearly – and in my view mistakenly – made it known that it considers the EEA as a precursor of the EU. And it must not for an instant be forgotten that a majority of the cantons has to be in favour of entry as well as a majority of the voters. It could happen in the next vote that entry will be prevented by the reservations of voters in the smaller cantons, which would be quite testing for our political stability. We would then ourselves have a «Denmark problem» within the country, although there is no doubt that our federal structures fully guarantee protection of minority opinion.

Dealing fairly with minority problems and entrenched veto rights is the true litmus test for the relationship between big and small.

I believe that the discussions on entry which are at present taking place in Switzerland are too strongly focussed on the status quo and do not take sufficiently into account the fact that the European Union is something which is in the process of evolution. This means that Switzerland would in fact be entering a process and not a fixed situation. It is of course quite true that our influence over the development of this process would be greater than if we remained outside. But we should not overestimate the influence that a small state could have even as a member.

Switzerland as a net payer might turn out to be both small and in the wrong camp. As both small and rich, it would be in the minority on two counts, and the danger of being outvoted and exploited at least in the medium term will have to be carefully weighed against the advantage of being able to take a share in decision-making. Sharing in decision-making is something quite different from taking decisions yourself, particularly when the chances are so great that you will be on the side of those who are outvoted.

My ideal – perhaps utopian – is Switzerland as a non-member, as a guardian of free trade and of many principles held dear throughout Europe’s history – a Switzerland which would keep alive awareness of the undoubted fact that the current European Union is not identical with Europe.

I think that in view of its constant liberal rhetoric the EU would find it rather difficult to discriminate against an economically highly-developed non-member in a manner which would be contrary to the spirit if not the letter of the WTO.

From the liberal point of view all kinds of interventionism – even those intended to be supportive – are to be regarded with suspicion, and any shift of jurisdiction from Berne to Brussels could well generate a vicious circle at some point in the future.

Adam Smith gave us three criteria, which are hallmarks of a well-functioning political system: «peace, easy taxes and tolerable justice». The criterion of «easy taxes» always tends to be underestimated in the political order of things – underestimated not by the ordinary man, who knows quite well what liberty really means, but by the political philosophers. Indeed, I would prefer to classify states according to the extent of taxation they impose rather than according to their general systems of government. The present relatively small contributions to the EU do not offer much consolation to me.

When Switzerland started out as a federal state in 1848, it also had very low federal taxes and about a dozen government officials – and that is probably why we were successful. It was an administration whose documentary base could be brought to Berne from Lucerne on two ox-carts.

There was also room on the carts for the national treasury; and this is the only aspect of the matter which might still be possible today, since our treasury consists mainly of debts. The time has long gone by when a large number of wagons would have been required to cart the treasury (in the form of gold coins) from one place to another.

When the soldiers of the French Revolution brought «liberté, égalité, fraternité» to us, they were in fact able to cart quite a few wagons of Bernese gold to Paris. Probably it was the first step to «fraternité» or «solidarity» as we would call it today. In fact the French «Grande Armée» helped us to get rid of parts of the feudal system which we also had in Switzerland. But the result was more dependence, misery and war rather than liberation. The processes of liberation are a little more subtle today. I wonder how things will develop with the «four liberties» of Jacques Delors. Would we really have more of them as a member of the EU than we already have? And what would the price be?

And let me add something about Jacques Delors‘ grand rhetoric with respect to the fifth liberty, «le libre échange des idées». I certainly do not want this free exchange of ideas to depend on any big political or economic organisation such as the EU. The very call for the free exchange of ideas is completely superfluous, if not dangerous. It may be dangerous because – especially in the realm of ideas – it is negative liberty and spontaneous exchange that really matter. So I am extremely sceptical about any attempt to establish from the outside some kind of tenuous «equality of opportunity» in the market for ideas.

With the constitutional reforms of the last century Switzerland completed its transformation from the old confederation to the modern federal state. This experiment may be classified as a success. But the constitutional rights of the cantons did not hinder the process of centralisation and bureaucratisation. The demons of centralised governmental increase have not been banned, and a functioning system of brakes has not yet been discovered – neither in the United States of America nor in the Federal Republic of Germany nor in Switzerland. If Europe could achieve this it would have made a really dramatic contribution to world history. But neither the Treaty of Rome nor the Treaty of Maastricht seem very promising in this respect – indeed quite the contrary.

I have already pointed out that for me the EU is not so much a finished organisation as a project for a future organisation. It has the clear objective of becoming a federal state, an integrated political community with its own foreign policy and, which to me seems more important, its own fiscal jurisdiction. The central importance of taxation in the functioning or non-functioning of a society has in my opinion been hugely underestimated up till now.

The relationship between the state and the individual is influenced almost as much by taxation as by democratic rights. It is by no means an accident that the process of winning independence in the United States started with a more or less harmless tax conflict (the Boston tea party) and with the motto of «No taxation without representation». Whether we 6 million Swiss would be able to maintain this principle of effective representation over and against 360 million inhabitants in the enlarged EU – rising to over 500 million in the event of extension to the east – is to say the least doubtful. I do not believe – and I certainly do not hope – that a European confederation or federation on the Swiss model would develop into a «welfare state» like that actually evolving in Switzerland today (and I would also refer at this point to the bankrupt and not yet restructured Swedish model). But our experience of democratic structures, where redistribution of wealth is always a popular issue, implies the strong possibility of such development and the consequent gradual degeneration of the liberal state based on the rule of law.

Every kind of governmental development-assistance runs the serious risk of redistributing funds from relatively poor taxpayers in rich countries to relatively rich receivers of subsidies in poor countries. These are not simply catch-phrases – their foundations can be empirically proved. Should we really get ourselves involved in a process which is at the same time harmful and senseless in the name of «European solidarity»?

In very many conversations with liberals from third world countries and former Eastern Bloc countries, I have met with broad understanding of our position outside the EU, and such understanding is usually based on the type of consideration which I have described. They see that the idea of Switzerland as a «window» into the economic and political «fortress» might well have something useful about it, and others outside the EU would lay considerable value on our traditional good connections – as a non-member – with members.

It may well be that I have somewhat exaggerated the possibility of negative development and have laid too much emphasis on the bureaucratic increase and the interventionism which might occur – without giving the much-vaunted principle of «opening» or «openness» a sufficient chance …

Now I have said many things – perhaps too many things – about Swiss history, about money and about taxes. The reason is not Swiss nationalism or money-fetishism. I am merely trying to be honest and to avoid rhetoric and «jelly-fish» expressions like «solidarity», «subsidiarity», «federalism» and so on. We have heard and read too much about that in recent weeks. Let me give you now my personal description of the EU I would like to join:

First: It should be based upon the spirit of the WTO: open markets all over the world. These should be no Euro-mercantilism, no Euro-protectionism and no Euro-interventionism.

The best thing would be to fix an unchangeable rigorous «numerus clausus» with fixed maximum quotas. Such «limited numbers» should take us beyond the status quo.

That is the EU I would like to join.

From the classical liberal point of view, the most important function of the state, which is the maintenance of security and the rule of law, may very well be achieved by relatively small political units. A well-functioning judicial system can also be organised with total success without huge supra-national organisations or even agreements. It is a good thing for smaller units to compete against each other, and it is only in smaller units that it is possible to establish the right balance between tax revenues and social expenditure which is so important for the economic survival of a political system.

It may well be that some of the ideas I have outlined have the distinct odour of Switzerland as a nation of shopkeepers, assessing world-political trends solely with their pocketbooks in mind. The accusation is justified. It is quite true that I have not taken the usual trouble of hiding considerations which reflect our own interests behind a smokescreen of ideological rhetoric – which seems to be done pretty effectively in some other countries. When other people talk about solidarity in the sense of «fraternité» I always think of the very old and fundamental story of Cain and Abel. There is not all that much love and solidarity between nations – and a more or less intelligent and long-term estimate of their own interests is the thing that really guides them in their relations with each other.

These ideas, however, describe the market economic forces which in fact do much more to promote peace and cooperation than all the political internationalist blowing and braying of trumpets in the world. The honestly intelligent and peaceful egoist does more for the general interest than the noisy enthusiasts of large communities. But crude and crass egoism is always silly and self-destructive, for individuals as well as for nations.

I started my remarks with a fable, and I would like to end them with another. It is from Schopenhauer, and it brings together everything which I have tried to explain here: «Die Geschichte von den Stachelschweinen» is one hundred years older than the horrible Nazi-song: «Die Schweiz das kleine Stachelschwein, das nehmen wir im Rückweg ein …»

«A company of hedgehogs snuggled up together on a cold winter’s day in order to stop themselves freezing by using their mutual warmth. But they soon found themselves suffering from their own spines and were driven apart. When their need for warmth finally brought them nearer together again, the spines drove them apart again – so that they were pushed hither and thither between the two evils until they found an adequate distance from each other in which they could tolerate both of them. Exactly in this way the need for company, which springs from the emptiness and monotony of mankind’s inner life, brings people together – but then their objectionable habits and their unpardonable errors soon drive them apart again. The mean distance from each other at which they finally settle down and where mutual coexistence turns out to be possible is marked by courtesy and good manners. The English have a good expression for those who do not observe this. They say to such people: ‚Keep your distance.‘ In this way the need for mutual warmth is only partially filled, but there is also little injury done by the spines of the hedgehog. But those who have sufficient inner warmth of their own will do well to keep away from society altogether, for in this way they will give no offence and they will also feel none.» So much for Schopenhauer.

I hope that both Switzerland and all the members of the European Union have a lot of «inner warmth» of their own. But this does not depend so much on states and the measures which they take to bring their governments together as on the people who live in those states.