The World Is Squared: Episode 1 – “Switzerland, Country of Joyce”

by Daniel on August 26, 2014

Thanks to P O’Neill in comments to my last post, for suggesting both the idea for this poor-man’s Friedman travelogue and its title. The first installment comes to you from the youth hostel in Grindelwald.

1. Telemachus

I don’t really have much need of apocryphal taxi drivers to serve as sources of information and/or mouthpieces for my own views for this one. I got to know the Swiss (or at least, a fair number of a particular and possibly unrepresentative class of them) when I was working for Credit Suisse, for five years which were roughly coincident with the first phase of the Global Financial Crisis. CS wasn’t, and isn’t, recognisably a “Swiss Bank” in its London office, or at least not in the way that you could tell that ABN Amro was a “Dutch Bank” or BNP Paribas is a French one. Credit Suisse was basically an American investment bank – lots of people, including those who named the servers in the IT system, still hadn’t got the message that “First Boston” had been dropped from the name years earlier. The Swiss were almost like mythical creatures, who lived on the floors above the cafeteria, only dealt with the world’s super-rich and all knew each other. Then there were the equally mysterious people of “head office”, who were mentioned once a quarter at the time of the annual results; I presume that the fact that these announcements tended to roughly coincide with Samhain, Beltane, Lughnasadh and Imbolc was coincidental. But then there was “our Zurich office”, a little bit of First Boston in the heart of Credit Suisse, and these guys were our kind of people, although at the same time interestingly foreign. I also ended up making a good friend in the private bank, who probably doesn’t need her name dragged into this, but she was one of the most impressive people I met and is presumably scheduled for higher things within the bank at some time in the future.

2. Nestor

Switzerland is one of those small countries of Europe, the existence of which makes a lot more sense when you consider that the alternative would have been for one Empire to let another have control of the territory. If you want to know what I mean, consider a map of the stretch of North Sea coast stretching up from Normandy in the direction of the Baltic and ask yourself why it is that such a huge country as Germany only has a scant few dozen miles of coastline and only two or three usable ports. What is it, the man wondered, about small, independent, trade-oriented countries like Denmark and the Netherlands that has made France, Sweden and Britain so keen on protecting their independence? To ask the question is to answer it, particularly when I gave such a strong hint. Similarly, the independence of Switzerland is not really underwritten by its geography, and the Swiss Army knows it – most of the big cities are located on easily accessible plains and the Swiss national defence plan has always been to abandon them. After all, Switzerland was actually ruled by Austria as recently as the days of William Tell. The independence of this little country is assured by the fact that it has long been understood by all the great powers bordering on the Alps that it’s probably in everyone’s best interests in the long term to have the key trade routes owned by a gang of ornery peasants who don’t want to be bothered by outsiders rather than having to fight over them all the time.

3. Proteus

I often used to win bets by asking people how important they thought banking was to Switzerland’s GDP. Few people, even Swiss natives, guessed less than 20%; most common guesses were above 30%. The actual answer is around 12% (roughly the same percentage as the UK), and that’s for total financial services – since there’s quite a lot of insurance, that would mean that classic “Swiss banking” is even less important. What makes people think that banking is more important than it is seems to be the huge global operations of Credit Suisse and UBS. But, of course, the majority of these activities take place outside Switzerland and go into the GDP of the places where they happen – mainly the UK and USA. Which means that the Swiss government’s too-big-to-fail liability is massively out of proportion to the economic benefit of the banking industry to Switzerland. This fact was not lost on the Swiss in the aftermath of the 2008 UBS bailout; the report of their Experts’ Group on Too-Big-To-Fail remains the best thing written on the subject and has formed the (badly imitated) template for a lot of other policy responses. Actually, Switzerland’s largest industry, by quite a way, is pharmaceuticals and chemicals manufacturing, which traces its heritage in the country back to the arrival of a bunch of Huguenot dyers, running away from religious persecution in the 17th century.

4. Calypso

The rumours of Swiss life being a little bit staid are not wholly unfounded. It’s a country where you can have a major political controversy when the Bourgeois Party splits from the Middle-Class Party. I have heard natives of Zurich claim that they would honestly prefer to live in Mogadishu than in Geneva; boredom is, after all, a form of pain. But I’ve also (thanks to a somewhat misguided attempt to save money on hotel reservations) sat in Geneva and eaten shashlik sitting next to guys with wrinkly blue tattoos. Even surprisingly small towns in Switzerland will have their Casa Dos Santos, or similar, serving specialitas Portuguesas for the immigrants who make up a large proportion of the country’s working class; in the chalet towns the garages and the vans driven by plumbing companies will have names like Da Sousa on the side of them.

Of course they’re not actually called the “Bourgeois Party” and “Middle Class Party”. But the slogan of the SVP is “Swiss People’s Party, the party of the middle class”, and the French name of the BDP is the “Parti bourgeois democratic Suisse”, so I think I can be allowed my joke.

5. Lotus Eaters

I suppose I ought to explain the title of this piece. It’s my suggested slogan for the Swiss tourism authorities – while Dublin makes a reasonable amount of capital out of Bloomsday and the setting of Joyce’s masterpiece, he actually lived elsewhere for most of his life. Along with Paris and Trieste, Zurich was one of the places where he lived for quite a while – from 1915 to 1919 and then again from 1941 until his death. He’s buried there, a factoid which rather obsessed me for a while; I visited his grave once during an afternoon when I had a couple of meetings cancelled. Ulysses and Portrait of the Artist were both published while he was living in Zurich. Joyce wasn’t the only misfit and artistic oddity to wind up in Switzerland; a fairly large percentage of the Berlin cabaret movement shifted there in the 30s. There’s quite a tradition of people ending up in Switzerland when their particular vision of the world started causing them problems back home.

6. Hades

The Swiss tradition of hospitality to free-thinkers and oddballs, of course, has its roots in the Reformation. As does the counter-tradition of hostility to and violent persecution of free-thinkers and oddballs. Driving down from Geneva to Interlaken, I saw a banner up for an exhibition of Amish art and furniture, the Amish of course being (as I’m sure you’ll remember) a name originally derived from the followers of Jacob Amman, an Anabaptist leader from Bern. Most of the American Amish are actually members of the theological lineage of Menno Simmons, a Dutch Anabaptist, or of some other group related to the Anabaptists, but the movement got its first big break in Switzerland, at the time calling itself the Swiss Brethren. Ulrich Zwingli (himself a religious oddball to begin with, and so was John Calvin; they did better at playing the political game) was deputed by the Zurich town council to meet with them every couple of weeks to see whether or not any progress could be made on this infant baptism business; the Protestant cantons had just finished kinda-sorta losing the Kappell Wars against the Catholic cantons, and were keen to avoid any further schisms.

Then the terrible business in Muenster happened (summary for people who didn’t do the Reformation for A-level history – Anabaptist sect took over in Muenster, went a bit cultish, started executing people for not being Anabaptists, much panic, town retaken, genitals nailed to city gates, massive disaster in which some hopeful socialist historians claim to be able to see the beginnings of class consciousness), and the political weather changed decisively in terms of people’s willingness to put up with the Swiss brethren, who now looked less like earnest god-botherers and more like worrying bearded freaks. Setting in chain a set of events which led to that Harrison Ford film and so on.

The modern parallels are presumably so obvious as to not need labouring.

7. Aeolus

The villain of the William Tell legend was, of course, a foreign tax collector (specifically, the Austrian reeve, but the causes of the historical rebellion which formed the Swiss Confederation was tax). It’s probably a little bit ridiculous to try and draw a direct link from this to the Swiss policy on tax evasion that prevailed between the end of the Second World War and the mid 1990s, but that isn’t the reason not to try – the reason why one shouldn’t bother with this analogy is that the policy in question is dead. It was never a specific Swiss thing – banking across a lot of Europe was secret in the postwar period, and for very good and obvious reason. The Swiss did have a particular issue with their tax law which never failed to enrage American tax collectors, which was that they made a distinction between “tax fraud”, a felony which involved a fraudulent document, and “tax evasion”, a misdemeanour offence. Misdemeanours weren’t extraditable and Switzerland wasn’t prepared to make exceptions in its domestic banking secrecy law for them either. Fundamentally, Switzerland didn’t for the longest time see any real role for itself as an unpaid law enforcement officer for other countries.

8. The Lestrygonians

A strange reminder of how much national boundaries matter even in this allegedly globally connected world – in the kitchen of my chalet is a roll of aluminium foil. An incredibly commoditised product, with huge economies of scale in its manufacture, and here we are, less than fifty miles from the border with France. But no, this was made in Bern.

9. Scylla & Charybdis

I’m surprised that the country of Switzerland doesn’t have a more prominent place than it does in the bestiary of the John Birch Society, the LaRouche movement and similar exemplars of the paranoid tendency. Twentieth centry reactionaries tended to be marked out by their horror and fear of the decline of absolute standards in anything; Switzerland provided the modern and post-modern era with the destruction of classical physics with Einstein, and with radical change to the concept of the narrative novel with Joyce. Even LSD was first synthesised by the Sandoz laboratory in Basel. Switzerland has always been a country where the law is malleable and changeable rather than an absolute standard, simply because of the importance of referenda in the constitution, and the history of federal government. The national character has always been based on a kind of pragmatism and compromise which is easy for an outsider to mistake for relativism.

10. Wandering Rocks

One thing that you tend to pick up pretty soon when working for a Swiss company, unless you are very unobservant indeed, is that the senior Swiss guys all know each other because they’re all in the Army together. It is possible to opt out of continuing service in the Swiss Army reserve after you’ve done your compulsory duty (and even that can be done in non-military service). But this doesn’t seem to be the way to a successful career if you want to stay in Switzerland and be a business executive. So Switzerland has an army of middle managers, which in my opinion is probably a pretty frightening prospect for anyone thinking of attacking them, as these are middle managers who have been given a single aim (defend Switzerland) for decades, plenty of time to practice and budgets which have to be considered for practical purposes to be inexhaustible. That’s the sort of situation that can get aircraft hangars built into the sides of mountains, tunnels that double as horrific tank-traps and Alpine passes that can be rendered impasses at the touch of a button. Even the low-lying cities like Basel would, according to highly classified rumour, be able to provide a number of nasty suprises to any machanised army which decided to detour through them.

The thing that the Swiss Army hates above all else, of course, is helicopters.

11. The Sirens

Arguably, a number of Switzerland’s other industries have, to say the very least, developed symbiotically with the offshore banking industry. If you have a load of money stashed away in Switzerland which you haven’t declared to your domestic taxman, then it’s surprisingly hard to spend it; bringing the stuff onshore is always going to raise questions. But on your annual visit to Switzerland, this secret stash of money at the end of the rainbow turns into a proper, spendable balance of liquid assets! So you can have a really slap-up holiday with all the treats you can force into yourself. You can get your teeth straightened or your tummy tucked. You can even get your kids put through a really posh education. If you’re looking for examples of how the financial services industry can support a number of other cluster specialties, the in flight magazine of Swissair is a fine place to look.

Another thing you can do is buy yourself a really really expensive watch, and presume that the fellow at Customs on your return won’t get impertinent about asking whether it’s the same one you were wearing when you flew out (he almost never does). The Swiss watchmaking industry dates back a long time earlier than the offshore banking industry, but it seems very likely to me that the development of the high-end watch market into basically a jewellery segment wasn’t substantially aided by the fact that watches are probably the best way known to man of smuggling a few multiples of the US$10,000 money laundering reporting limit.

12. Cyclops

The ban on construction of minarets, imposed by referendum in 2009, is a reliable source of embarrassment to the “international class” of Switzerland – the people who you tend to meet in the course of business or banking. In my experience, German-speakers tend to blame it on the French (“terrific racists, the lot of them”) while French-speakers tend to blame it on the inner cantons (“people whose surnames end in li and le, hillbillies, basically”). The fact that the ban passed is, of course, a useful reminder to the rest of us that the international, outward-oriented business class of Switzerland is by no means the entire population and in this case at least, wasn’t even a majority.

The minarets ban was the proximate cause of the split between the Bourgeois Party and the Middle Class Party, but I can’t remember which one was against it. Its supporters claimed that it was not a measure against Islam per se, but against all forms of fundamentalism in religion, which is something that makes a little bit more sense if you put it in the context of the history of Switzerland and extremist religious movements. Albeit that “makes a little bit more sense” still leaves the measure in the realm of making more or less no sense at all.

13. Nausicca

It can be presumed that the Saudi and Emirati billionaires who are the current growth segment for the Swiss private banking industry are not stowing their money in Switzerland in order to avoid Saudi and UAE income tax. My reason for believing this is that neither Saudi Arabia nor the UAE have any income tax. They’re putting it there because Switzerland has been a politically stable, neutral country for several hundred years now, while the Gulf states have existed for only a little bit more than half a century and have fairly obvious political tensions surrounding them. This is one of the very important points made by Taleb in “Antifragility” – that a good basis for guesstimating how long a political or social institution is going to last is to ask how long it’s lasted already.

This stability, neutrality and reliability seems to be very important to the Swiss conservative temperament – for the kind of people who vote in favour of banning minarets, the bankers of Geneva and Zurich seem to be regarded as untrustworthy, destructive and bad in and of themselves, but valuable simply because they’ve been around for such a long time and are therefore symbols of the eternal persistence of the Swiss Confederation. Certainly, when I was following the debate about bank regulation in Switzerland, one of the chief sources of populist rage against the banks in Switzerland was that they had damaged the reputation of the banks in Switzerland. The right-wing party in the parliament was often in the odd position of simultaneously allying with the socialists to demand public flogging and supertax, but also decrying any movement at all in the direction of compromise with the US tax authorities.

14. Oxen of the Sun

If I had sufficient spare time and a wholly warped sense of priorities, I think I could trace the boundaries of the wars of religion by driving around and listening to regional radio. As far as I can tell, Catholic cantons really go for snare drum backbeats and 2/4 time – if Mumford and Sons aren’t huge in Vaud, they are really missing an opportunity. Protestant cantons are much more into generic AOR. Everywhere in Switzerland gets a signal for the Europop collossus that is RTL2. However, the country does not seem to have any local attempts at hip-hop, for which I greatly respect them.

15. Circe

Of course, the position of Switzerland in the global economy means that the “fortress in the Alps” myth has to be a myth – there are really not many countries in the whole world that are more at the mercy of international forces, and by the hegemony of the USA specifically. The drugs industry in Switzerland, like everywhere else in the world is entirely driven by FDA approval. The banking industry’s self-anointed sense of independence lasted roughly five minutes after the US authorities decided to make a priority out of doing something about it.

Because Switzerland is a politically stable and neutral country with a good reputation for trustworthiness, it’s a good place to locate your trade association or standards organisation. Partly, this is an industry that’s grown up synergetically with the United Nations; in the immediate postwar period it must have made sense to have FIFA, the WIPO and similar bodies based there too. One of the more interesting companies I looked at was SGS, the Societe Generale de Surveillance, which will inspect your tanker loads of olive oil to see if someone has switched them for seawater, test your machine parts by the ten thousand to see if they’re made to the advertised tolerance, and generally carry out all sorts of services that have grown out of its original business model as the site inspectors at the massive bonded warehouses in the commercial zone outside Geneva. There are a lot of things that happen in Switzerland which don’t make any sense at all outside of the context of the global economy. It’s a country that is proudly independent, but which knows that it can’t really be too independent if it wants to be prosperous..

16. Eumaeus

The median Swiss private banking customer is, according to the industry joke, “every year, getting older and more female”. It’s a description of the gradual death of the European offshore banking franchise, basically from a mixture of two parts international tax treaties to eight parts demographic change.

What happens is this; consider Olaf, who survived the war and took his part in industrial reconstruction. As his manufacturing business grew, he kept sticking a bit of money away in Switzerland; if the memory of the 1930s wasn’t enough to make him cautious, the overhanging threat of Communism would. Life goes on and so does the world, but Olaf never changes his policy of sticking a proportion of his savings into his Swiss account – why would he change? He’s been given truly excellent service from his trusty account manager since the early days. Olaf has a great suntan, beautifully educated kids and a really nice watch.

Then he dies. Not much changes as the estate is passed on to Gerta, but sadly, she doesn’t live much longer. So now the estate, including the offshore account, has to be dividend up five ways between the kids; possibly even including the grandkids or nephews and nieces. These people of course knew that Olaf was a rich man, but they tend to be somewhat surprised to find out exactly how much a regular savings account can build up to if it’s kept pace with stock market returns and been largely invested in hard currency.

Unfortunately, there is now an awkward moment, where a Swiss lawyer expresses his condolences, and then informs the grieving children that they have a maximum of 48 hours to decide whether they want to start a career as tax evaders. What would you do? Particularly since Olaf’s fortune needs to be split up; a pot of $10m is a borderline ultra-high-net-worth account, but when you split it into units of $2.5m, and each of the heirs pays off their mortgage, what’s left isn’t so much of a fee income generator. And so the old European money which was the bedrock of Swiss banking profitability declines, and they have to seek out new markets.

17. Ithaca

The railways are, of course, a source of wonder to the rest of the world and no less so for being such a cliche. They don’t actually always run on time; mine were generally between five and ten minutes late. But they go everywhere; the SBB, great though it is, is not the real miracle of Switzerland compared to the dozens of little cantonal and sub-regional railways that serve even the smallest little towns on rails carved into the roads or running alongside them. This sort of infrastructure asset doesn’t depreciate if maintained properly, and it keeps providing the services for which it was intended in all economic climates. It’s a classic illustration of a point that John Quiggin has regularly made – that classic “risk-adjusted” discounted cash flow analysis will always overstate the risks of government spending and result in underprovision of infrastructure.

18. Penelope

As we drove from the airport, we turned away from Lake Geneva to go up into the Alps. Before the road turns up into the col, it goes along a valley floor, which stretches out ahead of you, seemingly endless until it turns up into forests and rocks. Way out in the distance, we saw a plume of white smoke rising, dead vertical in the windless valley. About half an hour later, we saw it was rising from a chemical refinery.

{ 53 comments }

1

AW74 08.26.14 at 10:05 pm

Superb article. I have to confess I hadn’t fully appreciated the reasoning behind the extensive range of goods from watches to tummy tucks in the Swissair flight magazine…

A few years back, a Swiss colleague explained one other arbitrage the Swiss have in their favour, namely a very conveniently placed set of hydroelectric dams. Given it’s hard to switch off nuclear power stations… with predictable regularity the French electricity system has a massive of power every night. Which the Swiss are happy to buy cheap, pump uphill and store for a couple of hours, then sell expensively to Italy when the public there switches on the kettle for a morning coffee. Regular as clockwork.

2

William Timberman 08.26.14 at 10:42 pm

Ditto on the superb. On visiting your money and pricey trinkets, it seems that the Oprah handbag contretemps might have had implications us lumpenproles missed entirely at the time. The world is mysterious.

3

nick s 08.26.14 at 11:41 pm

that watches are probably the best way known to man of smuggling a few multiples of the US$10,000 money laundering reporting limit.

There was a brand of Swiss watch called MuDu that was apparently created solely for the purpose of plausible deniability, as the watches made their way to the UK during the 50s and 60s via the docks and French onion sellers, and thus avoided import duty.

4

Joshua W. Burton 08.26.14 at 11:42 pm

Tourists often ask if the LHC is big enough to benefit nontrivially from ramping the main ring magnets up and down strategically. At 8 tesla, they are storing about 10 GJ of fully (and very rapidly) recoverable energy in the magnets, and another 0.7 GJ in the beams themselves. That sounds like a lot (3 tonnes) when you consider it as TNT, but at $0.10 per KWh-e it’s only a few hundred dollars, or a million-liter swimming pool times a kilometer of head — not much, compared to the dams.

5

Wallace Stevens 08.26.14 at 11:49 pm

Nice posting, thanks for this. I am a huge Joyce fan and I had no idea he was buried in Zurich. I’ve been so close and never realised. I will have to check out the grave site next time I am there.

6

Matt 08.27.14 at 12:01 am

Joyce wasn’t the only misfit and artistic oddity to wind up in Switzerland

Also, John Addington Symonds, the man with some claim to be the “inventor” of homosexuality, and close friend of Henry Sidgwick, who often visited him in Davos, where Symonds lived most of his later and most productive years.

7

Barry 08.27.14 at 12:26 am

Thanks for posting this, Daniel.

8

harry b 08.27.14 at 12:30 am

Wife out at a work meeting, one kid just off to college, another at soccer, the third destroying things with his best friend who just got back from Germany, so I make myself beans on toast with cheese on top and a cosmopolitan for dinner, put Janice Long on the radio — and I get to read this. Thanks Daniel.

9

MPAVictoria 08.27.14 at 1:58 am

A friend of mine just moved to Geneva to work with the OECD. As such I really, really enjoyed reading this. Much appreciation.

10

Joshua W. Burton 08.27.14 at 2:12 am

Einstein

Also the Bernoullis, Euler, de Rham, Schläfli, Borel. And Fritz Zwicky, and Niklaus Wirth, and part credit for Dirac and Pauli. Piaget, and two centuries of balloon Piccards. Albert Hofmann and the bicycle he rode in on was already alluded to. Also Paracelsus.

11

bad Jim 08.27.14 at 4:20 am

Bravo!

12

Jacob 08.27.14 at 4:28 am

This was a delightful read. However, you are sorely mistaken in neglecting local attempts at hip hop, which you might find give you even greater reason to respect the place! Take a listen to Kanal K or some of the acts at this recent event.

13

notsneaky 08.27.14 at 4:34 am

Wait. What? Sweden protecting Danish independence?

14

notsneaky 08.27.14 at 4:38 am

…and Lenin, you’re forgetting Lenin.

15

John Quiggin 08.27.14 at 5:29 am

And Lenin

16

John Quiggin 08.27.14 at 5:29 am

Snap!

17

Zamfir 08.27.14 at 6:04 am

As a Dutchman, I am always amused how similar Switzerland appears to be, on paper. A high portion of this (excellent) list could be turned Dutch with only minor changes. Down to the music choices in the Catholic and Calvinist cantons. But as far as I can tell, the Swiss and the Dutch typically can’t stand each other.

As a diversion: the Dutch Mennonites still exist, but over the century they turned towards freethinking. An optional believe in God, and they were the first to put a naked woman on TV. At some point, someone thought is nice if the world Mennonites convention was held in the mother country. It never happened again.

18

Allan Idalen 08.27.14 at 7:20 am

This sentence is wrong (one way to fix it would be to change likely into unlikely):
“[...] but it seems very likely to me that the development of the high-end watch market into basically a jewellery segment wasn’t substantially aided by the fact that watches are probably the best way known to man of smuggling a few multiples of the US$10,000 money laundering reporting limit.”

Interlaken is UP from Geneva.

19

djr 08.27.14 at 8:56 am

As a Dutchman, I am always amused how similar Switzerland appears to be, on paper.

In three-dimensional media, less so.

20

Jesús Couto Fandiño 08.27.14 at 9:14 am

My memories of Switzerland, Zurich in particular, are not so fun. Nice place, very clean and neat and all that, but the people … well, they were polite, some even friendly, but in general, I felt they were not particularly happy with me being there – must have something to do with walking under a big “WE DONT WANT INMIGRANTS” poster on a wall all day to work … getting them to teach me their jobs so I could do it when they were … let go.

Of course the most vicious (inside the boundaries of politeness but persistently annoying) of the critics was… the son of Spanish inmigrants. Boy, he did not miss ONE opportunity to tell us how he would NOT like us to consider moving there.

21

Dave Heasman 08.27.14 at 9:18 am

> Zurich was one of the places where he lived for quite a while – from 1915 to 1919 and then again from 1941 until his death.<

His second stay a short one , what with him dying 13 Jan 1941.

22

Jesús Couto Fandiño 08.27.14 at 9:19 am

BTW, there is some role of the Swiss in conspiracy theory… see http://en.wikipedia.org/wiki/Harold_Wilson and the “Gnomes of Zurich” thing.

Of course I got to know them via SJG’s Illuminati so I dont feel confident in saying more on the subject :P

23

chris y 08.27.14 at 10:58 am

Wonderful stuff! Keep up the good work. Section (book?) 4 reminds me of a colleague of my future wife in the early 80s, who remarked wistfully, “Of course I missed the permissive society. I was in Switzerland at the time.”

24

Tom Slee 08.27.14 at 11:14 am

A belated congratulations on your abandoning the iliad of modern banking for an odyssey, and I hope we hear tales from other ports of call. However, regarding Oxen of the Sun, not quite right.

25

Tom Slee 08.27.14 at 11:15 am

26

Niall McAuley 08.27.14 at 12:19 pm

chris y writes: Section (book?) 4

Episode 4.

Of course, it was originally just titled Ulysses when i first saw it in 1978, there was none of this Episode 4: Calypso subtitle stuff.

And Daniel shot first.

27

Mtrost 08.27.14 at 12:59 pm

Great post!

But this: The minarets ban was the proximate cause of the split between the Bourgeois Party and the Middle Class Party, but I can’t remember which one was against it.

That’s just wrong. The party system is organized on the level of the cantons. Under the leadership of the Zurich SVP (Christoph Blocher) the SVP drifted to the right during the 90s with Blocher getting a seat in the Federal Council. The Bern and Graubünden SVPs didn’t like that drift but were not able to change anything about it.

Then in 2007 the parliament (left and middle MPs) voted for Eveline Widmer-Schlumpf to substitute Blocher in the Federal Council (a thing almost unheard of: a standing member of the Federal Council willing to stay always gets reelected; plus: Widmer-Schlumpf didn’t hold any office on the federal level, only in Graubünden). The SVP under its Zurich leadership told her to decline the office or she would be expelled from the party. She accepted anyway, so the Graubünden and Bern SVPs (your Middle Class Party) formed the BDP (Bourgeois Party).

The referendum on minarets was later, in 2009.

28

jamie 08.27.14 at 2:05 pm

re: 9. Can’t remember where I read it but there is a theory that the reactionary movement of the 19th century was founded by diplomats and other political types who ended up in Switzerland for one reason or other and recoiled in horror at its extreme liberalism (for the value of extreme as understood by De Maistre and co).

29

rea 08.27.14 at 5:50 pm

Lenin and Joyce were in Zurich at the same time. (Einstein just missed them.) One could imagine casual, unknowing encounters . . .

30

PJW 08.27.14 at 6:39 pm

Mighty fine. The subheds are a nice touch. Looking forward to more entries.

31

TM 08.27.14 at 7:20 pm

Thanks for clarifying 27. The party is actually called Bürgerlich-Demokratische Partei, en francais Parti bourgeois démocratique (http://de.wikipedia.org/wiki/B%C3%BCrgerlich-Demokratische_Partei). The term “buergerlich”, which in German is distinct from “bourgeois”, is commonly used in Switzerland (and not in Germany) to denote rightist politics (or anti-socialist, in the days when there was still socialist politics).

As to the minaret ban, have you really heard people blaming it on the francophones? That would be ridiculous as the referendum map (http://de.wikipedia.org/wiki/Schweizer_Minarettstreit#Ergebnis_der_Volksinitiative) easily shows who voted how. The only states to not vote for the ban were in the francophone West. All Germanophone cantons voted majority yes, except the cosmopolitan city of Basel. The very same pattern has been observed over and over in referendums having to do with policies towards immigrants – Francophones always tend to be more open, more progressive, less racist (worth noting that the Francophones themselves are a minority and frequently feel dominated by the Swiss Germans; Italian speakers for some reason tend to vote with the latter).

32

TM 08.27.14 at 7:42 pm

Regarding point 17, it is worth mentioning to this audience that the Swiss railway system – SBB – is the result of nationalization of most of the existing private railway infrastructure, approved by referendum in 1898. Also worth mentioning that although there still exist many regional railways (sometimes mistakenly referred to as “private” – they are mostly under state and local ownership), they are well coordinated with the federal network so that from the passenger’s perspective it doesn’t matter whether one takes a regional or federal train. There is for example the very popular half-price card that gives a 50% discount on train tickets from almost all providers, including regional rail and even boats and ferries.

33

Peter King 08.27.14 at 7:43 pm

rea: See Tom Stoppard’s Travesties.

34

Matt Heath 08.27.14 at 8:10 pm

“Especialidades portuguesas” (unless there is a joke that I am missing)

35

Trader Joe 08.28.14 at 8:37 pm

The only thing your post does not cover, which I would dearly like to know, is how the Swiss manage to drink up all of the amazingly good wine they produce leaving not a drop for export. Said differently, if you ever find Swiss wine outside of Switzerland, don’t drink it, as its probably plonk.

The other thing, only briefly touched upon, is how a spot as naturally beautiful as Geneva could possibly have become one of the most dreadfully boring places on earth. A merger of Berlin’s nightlife and Geneva’s location would be worthy of the billions stashed in the vaults below.

36

Sean 08.29.14 at 12:03 pm

ruled by Austria
Actually, the Habsburgs began their modern existence in Aargau. Their first house is located in a village (Altenburg) absorbed into the city of Brugg. On a hill outside of the city is the town of Habsburg, home of *the* Habsburg. The Habsburgs began in Switzerland before moving onto Austria, so it’s not exactly historically accurate to claim that the Austrians ruled Switzerland. The Swiss always talk of them as the Habsburgs, and it’s rather obvious why (they began in CH).

37

Sean 08.29.14 at 12:18 pm

@TM / #31

The term “buergerlich”, which in German is distinct from “bourgeois”, is commonly used in Switzerland (and not in Germany) to denote rightist politics (or anti-socialist, in the days when there was still socialist politics).

Bürgerlich has the same connotation in Germany.

38

Daniel 08.29.14 at 1:18 pm

Thanks to everyone for correcting me on Swiss politics. I have been following the example of my heroes (aimed for Alan Whicker, settled for Friedman) and just writing down half remembered things from conversations in bars and between meetings. So either I misremembered, or correctly remembered someone who was talking rubbish in the first place. Probably the first. I’ll let the mistakes stand for the minute and maybe correct them later.

39

SamChevre 08.29.14 at 2:15 pm

I enjoyed the piece, so will criticize the history.

The Swiss (more precisely, the people of Zurich – one doubts that the rest of the Swiss cared) were persecuting the Anabaptists well before the Muenster Rebellion in 1534; Felix Manz was drowned in 1527.

40

Someone from the other side 08.29.14 at 2:59 pm

Lots of dubious information here and some flat out wrong (I won’t argue culture, Americans will never get that). However, on politics: BDP and SVP split because of the election of Evelyne Widmer-Schlumpf in place of Christoph Blocher, not the anti minarett initiative (though that indeed is classical SVP populism). And as someone already pointed out, Bürgerlich is more appropriately thought of as center-right or conservative though it is illustrative that those parties have always been much stronger in the Swiss German part rather than in the Romandie.

Also if you believe mythology, William Tell was active in 1291, so hardly a recent development. And as someone pointed out, the whole being ruled by the Austrians story is hardly correct, either.

For the wine story: even being a native, the wine story remains a mystery to me. It’s overpriced crap and I hardly ever even think about drinking local wine. I think it is not exported because nobody in their sane mind would pay the price.

As for one commenter’s point about the similarity with the Dutch, as a Swiss, I always felt same. Except I never encountered any mutual disdain (we reserve that for the Germans :)

The army ties have depreciated a lot. I never did any service and over the past 15 years I never once had the impression that anyone really cared (even people who had fairly high ranks), I doubt the topic even came up more than two or three times (and then mostly over beers).

Finally, Swissair has not been flying any planes for more than a decade now. At least get the name right. In fairness, I always thought of the referenced magazine as a dumbed down version of the FT’s how to spend it, it being mostly air miles in this case since it is damn well impossible to ever redeem them for flights.

41

TM 08.29.14 at 4:02 pm

37: In Germany, one could say that it has that connotation but you won’t hear that in political discourse (any more) whereas in Switzerland it is common to refer to political parties or candidates as “buergerlich”, without the slight negativity implied in the term “bourgeois” in German or English (but not in French).

42

Daniel 08.29.14 at 4:40 pm

I have to say that whatever the precise connotations of “buergerlich”, the party in question is pretty dang bourgeois by pretty much any standard.

(I’m not visiting Sweden, but recall a Swedish pal’s comment on the elections there; “you’ve got to remember what country this is. The Conservatives are really quite socialist and the Socialists are still pretty conservative”)

43

Sean 08.29.14 at 4:55 pm

The Swiss Social Democrats (SP) are not conservative, at least not the ones I’ve met. I’ll use Cedric Wermuth as an example. I first met him in 2004 when he was a teenager in cantonal politics. He’s now in Parliament and is certainly radical. He’s one the SP’s vice presidents and led the national Young Socialists (Juso) before that. If you look at where they stand on the issues, I’d argue that the SP is the most left of the German-speaking social democratic parties and to the left of the Swedish Social Democrats.

Bürgerlich is used much more in the Swiss context, I’ll grant that. If one reads the NZZ, it’s used in a very positive manner to imply conservative, not bourgeois. It’s not at all like “spiessig.”

44

James Breiding 08.30.14 at 8:17 am

neat !
I’m author of Swiss Made – The Untold Story behind Switzerland’s success’
Contact: R. James Breiding | Spyristrasse 2 | 8044 Zürich | +41 44 915 52 20 |

http://www.wirtschaftswunder-schweiz.ch/the-author

Interested to talk – meet ?
Best
James

45

Ellen Wallace 08.30.14 at 8:36 am

(also: ellenwine.com) Very enjoyable read and I like your remark about the mistakes. Austria ruling was a major puzzle and I suspect you were drinking wine in Graubünden when someone slipped that one over on you. Financial sector and GDP and your comment on the too big to fail banks glosses over a lot and I’d suggest reading Finma’s (supervisory body) paper on the issue. I’ve also enjoyed the comments. They often reflect the prejudices and clichés we all have about a place and underscore how tough it is to dislodge those.

I’m a journalist, with Swiss wines as a specialty. I just published the first book on them in English in 20 years because the change has been so dramatic (Swiss wines win a lot of international awards, for a start, and they are pioneers in quality organic, sustainable) – and the question keeps coming up about why only 2% are exported. Trader Joe and Someone, I hope you’re open-minded enough to reconsider and try a few more glasses, not the toughest assignment. Comparable decent wines are cheaper than those in France, so forget the overpriced idea unless you’re talking about a) plonk everywhere or b) buying Swiss wines in some foreign markets. The ones that are exported aren’t usually plonk, but they can get pricey due to taxes and distribution systems.

The old boys network from the army is a beloved cliché and like most, it still holds true to some extent although it’s changing (based on my son’s current army experience). What we hear less about is the old boys network created by universities: with only 10% of the population traditionally getting degrees this is a neat little elite whose ties carry on for their working lives, crossing all industry, journalism and social lines.

46

Someone from the other side 08.30.14 at 10:41 am

Ellen, happy to do so, can you point to a few reds (I never cared for whites, which maybe part of the issue here given relative Swiss production shares) that could be picked up at either Coop or Denner (can’t be bothered to deal with Moevenpick or any of the specialty dealers, really)?

Until further notice, I will consider Chilean and Argentinean wines the best overall value :)

I fully agree with Sean’s statement on SP and bürgerlich – arguably, NZZ is perhaps the best reflection of what bürgerlich is about (altho perhaps they are a bit more socially liberal than average).

47

Ronan(rf) 08.30.14 at 12:52 pm

“This is one of the very important points made by Taleb in “Antifragility” – that a good basis for guesstimating how long a political or social institution is going to last is to ask how long it’s lasted already.”

Is Taleb’s book good ? I was going to get it but just cant get past his clownishness which unfortunately leads me to be sceptical of everything the man says. His point that ‘a good basis for guesstimating how long apolitical or social institution is going to last is to ask how long it’s lasted already’ seems so obvious I’m not sure why he’d bother making it.
Of course I’m probably wrong on Taleb, who might just be too brilliant for my simple mind.

48

Ronald Brak 08.30.14 at 1:16 pm

With regard to the aluminium foil, the Swiss were really into aluminium and their production apparently peaked in 1980 at over 800,000 tonnes. They don’t smelt much aluminium themselves these days, as AW74 mentioned above it’s now probably more profitable to purchase electricity from France and sell it to Italy than to use it to smelt aluminium, but they are still heavily involved in aluminium manufacture and also aluminium in general world wide, so it is no surprise they still roll their own foil. And I presume its easy enough for them to import aluminium ingots from Norway.

As for economies of scale, I would estimate most of them would be captured by a plant that produced a few tonnes an hour or one million meters of kitchen foil a day. That would be 12 cm per Swiss person a day. But I presume they also export it. Perhaps to Norway.

49

James Wimberley 08.30.14 at 5:31 pm

“the in flight magazine of Swissair” : a collector’s item as the airline folded in 2002. Airlines go bankrupt with Trumpish regularity, and it was reborn as “Swiss”. (I claim the CT prize for most trivial pettifoggery on the thread).

When I was in Zurich in 1965 (I think) as a student intern in a bank, I was told that all Swiss bridges are built with shaped cavities for demolition charges. They were probably prewired too. Do they still do this? 1989-91 made the already very remote risk of invasion very much remoter. I assume Putin doesn’t have a plan to follow in Suvorov’s footsteps.

50

Ellen Wallace 08.31.14 at 8:45 am

Daniel, kind of you to let us discuss Swiss wine here :-)), slightly off topic maybe?

Wine for Someone: good time to ask about Coop, since they’re 20% off right now :-) I rarely buy Swiss wine at Denner, whose system is designed around wineries with excess stock. For reds, you need to know a bit about grape varieties to avoid disappointment (no idea if you do, so apologies if this is unnecessary). I love Swiss Pinot Noirs with roast chicken and Syrahs or Cornalins with steak, Merlot from Ticino with just about anything, to give an idea. And for the record, Switzerland produces and consumes more red than white wine, another cliché buster. Canton Vaud is the (big) exception. If you’re used to New World style wines, the J-R Germanier Syrah is probably closest to what you’d like, or the Roncaia Merlot Ticino DOC 2011.

Les Grands Dignitaires Provins Gloire du Rhône Dôle du Valais is CHF7.60, good value, easy to drink. Ditto for Hurlevent Charles Favre Dôle CHF11.60.

Coop reds, CHF10-20: J-R Germanier Syrah (2012 rather than 2013 if you find it), Roncaia Merlot Ticino DOC 2011, Tenuta Montalbano Merlot Ticino, Naturaplan Organic Cuvée Noble Rouge Domaine la Capitaine La Côte AOC (2012), Pro Montagna Pinot Noir Valais AOC from the St Jodernkellerai in Visperterminen which has amazing vineyards at 800-1100 metres, Jeninser Pinot Noir Auslese Obrecht, R. Gillard Dôle des Monts Valais, Saint-Guérin Pinot Noir Valais.

And if you want to splash out and you’re eating chasse/game, this is lovely, Coeur de Domaine Rouvinez Valais AOC, CHF38.40. Cheers! Santé!

Change of topic – more fugitives who made a mark while in Switzerland: Jean-Jacques Rousseau in Geneva and Richard Wagner, who wrote “Tristan & Isolde” while having an affair with his hostess in Zurich (he then fled Switzerland when the relationship came to light).

51

Dan Riley 09.01.14 at 3:36 am

Also Tristan Tzara. See Stoppard, Tom “Travesties”.

52

Trader Joe 09.01.14 at 7:28 pm

@Ellen Wallace

Thanks for the input. I agree entirely that the wines in-country are excellent.

I do try them when I see them, but its exceedingly rare. 2% might be the overall export figure, but I’d be curious what cut reaches the US (not that this should be the main concern, but that’s where I do my looking). My experience tells me its quite small, but perhaps it goes to markets I don’t frequent.

I’ll probably stick with just drinking as much as I can while I’m there and jealously hoarding my limit when I’m able to bring some out.

53

TM 09.01.14 at 8:08 pm

“2% might be the overall export figure, but I’d be curious what cut reaches the US”

Because of the immense red tape associated with wine import in the US, it is very difficult to find wines from small export markets. The same is true for most Austrian and German wines – you do get a few popular brands (sweet Rieslings rolleye) but the vast majority of the styles offered locally are never available in the US (e. g. German Frankenwein, bone dry and excellent). Of course, the central European climate simply doesn’t lend itself to mass production and oversees export. Most wines are grown by small producers in small quantities and consumed locally.

Ellen, what do you think of Delinat? I always enjoyed their quarterly surprises. I am in a country now where it is illegal to send or receive wine by mail. They say it’s the “freest in the world”.

43: Yes I was looking for that word, “spiessig”. Thanks.

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