The Swiss people are normally very sensible when asked to vote in national referendums. Here are some recent results.
- In 2010, nearly 60 percent of the electorate rejected a class-warfare income tax proposal.
- In 2014, Swiss voters overwhelmingly killed a minimum-wage mandate.
- Also in 2014, the voters of Switzerland rejected single-payer healthcare by a landslide margin.
- And in 2015, more than 70 percent of voters rejected a federal death tax.
- In 2016, there was a landslide vote against a scheme to provide universal basic income.
Though my favorite referendum result occurred several years before I started writing on this site.
- In 2001, the people of Switzerland voted by a 5-1 margin in favor of a spending cap.
Given all these results, you won’t be surprised to learn that Switzerland is near the top in rankings of economic freedom, trailing only Hong Kong, Singapore, and New Zealand.
But this does not mean that Switzerland is a libertarian nation. At least not in an ideological sense. And we have two new referendum results that underscore this point.
This past weekend, Swiss voters had an opportunity to get rid of the central government’s value-added tax, personal income tax, and corporate income tax.
Ending those taxes would be a libertarian fantasy, but the initiative to extend the levies was easily approved.
More than 84% of voters have renewed the government’s right to tax its citizens and companies for another 15 years. This is a unique feature
of Switzerland’s political system of direct democracy and federalism. …rejection would have been a nightmare for the government. …said Finance Minister Ueli Maurer in January. “If voters were to say no, the Swiss government wouldn’t have enough funds and there’s no way we could find another source of revenue or introduce spending cuts of the same order.”
Voters were swayed by arguments that a no vote would cause too much fiscal disruption. Slashing the central government’s budget by 60 percent might appeal to ideological libertarians, but it didn’t fly with don’t-rock-the-boat Swiss voters.
The direct federal tax and the sales tax together contributed about two-thirds of the Swiss central government’s budget,
bringing in around 43.5 billion Swiss francs ($44.25 billion) in 2016. …Should voters reject the measure, the government would have to slash spending by more than 60 percent practically overnight or find new sources of revenue, Maurer told reporters.
Here’s a pie chart showing the revenue sources for the central government.
I would have voted no, of course, and I wish more Swiss voters had lined up against the initiative.
Not because I would have thought that an immediate 60-percent reduction in the size of the central government was feasible. But a larger share of no votes at least would have sent a signal to politicians in Bern that frugality is a good idea.
There was another referendum over the weekend that also produced an unfortunate result. Swiss voters approved continuing subsidies for state-run media.
The Swiss Broadcasting Corporation, Switzerland’s public broadcaster is largely funded by a broadcasting fee. This fee,
known colloquially as Billag, the name of the agency that collects it, is paid by most companies and essentially every household. The No Billag initiative, is a bid to do away with fee. …the No Billag vote was rejected by 71.6% of voters.
The margin of defeat is especially disappointing since libertarians actively campaigned for this initiative.
Switzerland, like many European nations, has certain television and radio channels that are run by the government. …Together with other classical liberals in Switzerland, Frédéric Jollien is fighting against the royalties imposed by the government for media consumption.
450 Swiss Francs, the equivalent of €382 or $456, is the annual fee that consumers are required to pay, regardless if they want state-run TV and radio channels or not. …Journalists (who, by the way, are exempt from paying this fee) are releasing heavy verbal fire on the campaigners. They claim it would cause massive unemployment in the media sector, that it is anti-democratic, and that it would enable big foreign companies to take over the Swiss market.
Alas, the fear campaign succeeded.
But I hasten to add that this doesn’t mean Switzerland is turning towards statism. I suspect the real story is that the Swiss are content with the status quo.
And the status quo (especially by European standards) is a practical form of libertarianism.
Here’s some of what Dan Hannan wrote last year.
I have always loved Switzerland…its devolved decision-making, its entrenched Euroskepticism. …I am a Helvetophile for many of the same reasons as America’s Founders. James Madison was fascinated by the way Switzerland had “no concentered authority, the Diets being only a Congress of Delegates from some or all of the Cantons.”
…George Mason was entranced by the militia system: “Every Husbandman will be quickly converted into a Soldier, when he knows & feels that he is to fight for his own. It is this which preserves the Freedom and Independence of the Swiss Cantons, in the midst of the most powerful Nations.” …Switzerland has stubbornly retained its sovereignty, despite being surrounded by the EU. …Swiss democracy is direct, decentralized and devolved. Most fiscal decisions are taken locally. Result? Swiss voters are the happiest in Europe, their economy is the freest, and their state budget the smallest.
And let’s not forget that Switzerland is still a bright spot on gun rights.
In February 2011, Swiss citizens voted in a referendum that called for a national gun registry and for firearms owned by members of the military to be stored in public arsenals. …Hermann Suter, who at the time was vice president of the Swiss gun-rights group Pro Tell, told the BBC then.
“The gun at home is the best way to avoid dictatorships—only dictators take arms away from the citizens.” Apparently many of his fellow Swiss agreed. The referendum was easily defeated. Gun ownership in the country has deep historic roots… guns are popular… Children as young as 12 are taught how to shoot…and are encouraged to participate in highly popular target-shooting competitions. The country’s cultural attachment to firearms resembles America’s in some ways…it has the third-highest rate of private gun ownership in the world… The Swiss Defense Ministry estimates that there are 2 million privately owned weapons in the country of 8.3 million people.
Yet there’s almost no gun-related crime.
Switzerland has a low rate of gun crime, and hasn’t seen a mass shooting since 2001.
And let’s not forget that the fiscal burden of government in Switzerland is comparatively modest.
Not by libertarian standards. 
Not by historical standards.
But compared to other European nations, Switzerland is a fiscal Shangi-La. The tax burden is lower, and spending consumes a smaller share of economic output.
And this translates into lower levels of red ink.
P.S. I find Switzerland to be a very interesting case study, for reasons noted above and also on issues such as decentralization, privacy rights, gun rights, and private retirement savings. But I’m a policy wonk, so I’m drawn to unusual examples. What does surprise me is that other people must be interested in the country as well. My 2011 column comparing Switzerland and the United States is the 7th-most-viewed piece in the history of this site.
[…] hope so. There are very few libertarian-minded jurisdictions in the world. It would be a shame if the Swiss rolled over and let EU bureaucrats dictate their gun […]
[…] “Good Globalism” and “Bad Globalism.” Sort of the difference between Switzerland and […]
One place where I did disagree with the Swiss was when they voted against increase their gold supply.
If one accounts for all gun deaths in Europe, including the wars instigated by coercive collectivism, the Swiss have had by far, by very far, by very very far far, the fewest gun violence deaths compared to their disarmed European brethren. Switzerland would need a massive school shooting every week for many centuries to catch up to the number of nearly children killed by European coercive collectivism.
Having the individual arms has greatly contributed to the Swiss escaping organized state killing — by making a conquest of Switzerland a costly endeavor.
In the rest of the European continent where “The People” demanded emergency powers to disarm the populace, the state then rounded up young kids just out of school and told them: “How old are you kid? Eighteen? Great! The people of your country thus summon you to collective service and give you your state rifle. See that hill over there brave egalitarian young man? That is where the followers of the other coercive collectivism faction are. You go get them now… or else…”.
The crux of the matter is that most of these young men never returned, never had families in the first place, were never able to complain about what was done to them, the shootings and bombs where they perished at the altar of coercive collectivism — and, most importantly, they never voted again. So they were gone, forgotten, thank you for your life, with a token remembrance once a year.
It would take tens of thousands of school shootings to match the eventual brutality of coercive collectivism.
I would have voted yes on the taxes, like 84% of the Swiss did. Had the referendum been a 1-3% annual decrease in spending for the next 15 years then I would have supported the tax cuts.
If you are in the top ranks of economic freedom and one of the three most prosperous countries in the world, some caution regarding drastic sudden changes is, I think, reasonable. A 2% annual reduction in spending for 15 years would have added up to an almost 30% reduction in total expenditure. I would have been happy with that, even if it were an inflation indexed reduction, and I would have felt confident and happy that my country is on the right track.
I continue to admire the Swiss. They are situated in a statist neighborhood yet they stand apart. Most importantly, They are also part of the old world, where voters have had many centuries at their disposal to mess things up yet they have not — unlike Americans who are expending the libertarian endowment of their country’s creation at an alarming pace. Switzerland remains a refreshing reminder that electoral entropy in a democracy does not necessarily win. On the other hand, there are 194 countries in the world and not even a handful of Switzerlands. So the chance that any one person has picked the right country to live in — so that they might continue to be in the world’s most prosperous tier by mid century — is rather small.
The wise stay mobile.
PS. I totally agree with Dr Mitchell’s desire to have seen a closer referendum result — as a signal to politicians that the electorate values small and limited government.
PPS. Yes the mandatory public media financing referendum outcome was unfortunate, since it was a rather small thing compared to a massive drastic tax reduction. Again they could have voted for a reduction to the hefty public media funding and then take note of the results for future actions.