Swiss Secrets of Low Unemployment and Low Crime
American politics – and the politics of much of the rest of the world – consists of arguments about which political party will produce the lowest unemployment, and which political party will produce the lowest crime. Other questions exist in particular settings. People argue about the relative rewards accruing to different ethnic groups; they argue about the division of wealth between rich and poor; they argue over religious differences; they argue over foreign policy; they argue about corruption; they argue about the personalities of different leaders.
But virtually everyone agrees that they want low unemployment and low crime. Politicians claim that they have superior programs to achieve these goals; supposedly, the policies of the other party are terrible.
How come Americans never look at other countries to find out what brings those countries low unemployment and low crime? Politicians are self-interested actors who represent everything they espouse as being wonderful. Why not look at the data from the rest of the world to find out what actually does lower unemployment and what actually does lower crime?
If you are looking for the ideal case of low unemployment and low crime, one country you might want to consider is Switzerland. Since end of World War II, Switzerland had been one of the richest nations in the world. It is well known for its high level of social consensus and low level of internal violence. If you only had three seconds to pick a nation that would be likely to have an outstanding record, you would usually do well by picking Switzerland.
The next tables put Switzerland’s excellent performance on creating jobs and providing for personal safety in international perspective. The first table shows the most recent data for unemployment rates and crime rates for a number of well-known wealthy nations, with China, India, Poland and Colombia thrown in to show what statistics look like in less prosperous settings. To show that the 2023 data are not a fluke, I include a second table with data from 40 years earlier, 1983. This was the first year for which Switzerland published crime data using international statistical standards – homicide data in this case. There are a smaller number of cases in the 1983 table – because many nations did not have good data for the year 1983. However, the basic patterns are the same in the two periods.
The main point of both tables is that Switzerland has some of the most favorable unemployment and crime rates in the world. For both periods, Switzerland is the number one or number two country in the list. Significantly, Switzerland outperforms the United States for every indicator and every year. To be fair, the United States is well known for its high crime rates, rates which are unusually high for a rich nation. But Switzerland generally outperforms the United States economically as well as on questions of criminal justice.
Switzerland is not the absolute best performer in the world. That honor goes to the
Emirates. The above table shows the data for Qatar. However, Dubai and Oman’s statistics are essentially the same. Life is wonderful in the Emirates. This is not because the governments there have some wonderful magical government policy. If your country is sitting on top of unbelievably vast amounts of oil, and your population is miniscule, you can pretty much take care of everyone nicely with oil revenues. Most of the rest of the world is not sitting on top of enough oil to make everyone in their country zillionaires.
When you look at statistics that do not include the Emirates – and you skip a few very poor countries that keep low quality statistics – the three consistent winners in global rankings tend to be Singapore, Japan and Switzerland. This essay could have been written about any of these three. Japan and Singapore may easily get their own essays on this website in the future. The Swiss case is a good one to look at because the American readers of this website probably know very little about Swiss history. Switzerland has a reputation for skiing, hot chocolate, and banks. There is a lot more to Switzerland than skiing, hot chocolate and banks.
There are many ingredients that contributed to Swiss success. Many of them stem from the one factor that is too big to ignore: the Alps. Switzerland is the only large nation that is 100 percent Alpine. France, Germany, Austria, Slovenia and Italy all have some Alps, but are mostly flat. Liechtenstein is too small to have an independent economy.
The Alps are particularly mountainous and steep. They are an enormous protection against foreign invasion. More importantly, they also protect against civil war. In modern history, Switzerland has been successfully invaded only once – by Napoleon in the nineteenth century. Long before Napoleon was defeated at Waterloo, he voluntarily restored the sovereignty of the Swiss cantons. Switzerland was too hard for even Napoleon to control militarily. Napoleon tried and failed to control Switzerland. Hitler did not even try to take over Switzerland. Even though Nazi Germany conquered most of Europe, Germany judiciously respected Switzerland’s independence.
The difficulties of waging war meant that there has never been a Civil War in Switzerland. Nor has there been a Switzerland-wide Revolution. Contrast this with the American Civil War, the Revolutions in France in 1789, 1830, 1848, 1870, and 1936, the English Civil War and wars against the Irish, the Welsh and the Scotch, the Wars of German and Italian Unification, and the five civil wars in Spain.
The military inability of a national government to impose its will on a Swiss region means that the Swiss Cantons are extremely autonomous. They are far more autonomous than would be the case for an American state. The Federal Government in Switzerland is extremely small. It narrowly regulates foreign policy, the military and banking. Virtually everything else – which includes most of the functions of government - is handled at the canton level. French cantons get to speak French. German cantons get to speak German. Southern Switzerland is extremely religious and conservative. Northern Switzerland is liberal. The differences between the Southern and Northern cantons are similar to those found in the United States between red states and blue states. The federal government has no ability to impose liberal laws on conservative cantons or conservative laws on liberal cantons. As a result, Switzerland does not have the hostility to the federal government that one finds in the United States. Everyone gets to live in a canton governed essentially by people like themselves.
The high similarity of people within cantons and the high level of difference of people between cantons leads to high social conformity within one’s canton and high levels of tolerance for people coming from other areas. People who speak other languages, or people who are more liberal or conservative than oneself are unlikely to affect what goes on in your home canton. So, people are highly comfortable with strong regulation and social control locally, since the regulation is done by people who share the same outlook and values as oneself. They are highly tolerant of people with other languages and cultures because they have no fear of being displaced.
There is another consequence of the difficulty of fighting and the absence of civil war. It was very difficult for warlords or aristocrats to seize large amounts of land for themselves. The inability of rich landowners to monopolize the control of land meant that landholding in rural areas was fairly egalitarian. Equality in land led to equality in income. This is not to say Switzerland has no inequality at all. Historically, there were aristocrats. One canton, Neuchatel, was ruled by a Prince for a long time. Swiss bankers and industrialists are richer than the rest of the population. However, there were not the large scale latifundists (landowners with gigantic holdings) or superpowerful magnates that characterized Spain as a whole or the East of Britain.
Low rural inequality led to low urban inequality. Switzerland lacked a strong conservative landowning class that could block the provision of government welfare for the poor.
A long tradition of social peace also led to easy unionization and the provision of workers’ rights. A country of non-violence and tolerance did not have the stomach for general strikes, lockouts and the use of private armies to bust unions. Workers, after extensive peaceful demonstration, tended to get what they wanted. Generous labor laws and support for unions meant that Swiss wages became fairly high. High wages meant low rates of poverty.
Let’s put all the elements together.
Low levels of poverty and a large middle class
An absence of a tradition of Swiss against Swiss violence
A high willingness to be regulated by the people in one’s community
A high tolerance of people with other cultures and languages.
All four of these factors stimulated economic growth, reduced unemployment and reduced levels of violent crime.
Low Levels of Poverty and a Large Middle Class – Low Unemployment
A country with social equality will grow more than a country with high inequality – even if those countries start with the same level of GDP. Consumer demand and consumption is much higher in the equal country than in the unequal country. Very poor people make poor customers. They cannot afford housing, medical care, automobiles or in some cases – even food. Moving people from very poor to poor or from poor to lower-middle-class increases purchases of housing, medical care, automobiles and food. This is all consumer demand which in turn leads to higher GDP. The super-wealthy consume too. However, they consume a lot of imported luxuries. They travel overseas and buy foreign assets, On the plus side, the wealthy save and those savings represent the basis of capital and investment. But recessions and depressions are generally caused by insufficient sales – which means insufficient consumer demand. As long as inflation does not get too high, one wants the vigorous spending of a working class with money. Switzerland’s high level of equality was a form of insurance against acute depression.
Low levels of poverty led to high levels of entrepreneurship. Switzerland’s early wealth came in part from middle income yeoman family farmers who had just enough extra money to do some investing. Switzerland’s family farmers are the basis of both Swiss Cheese and Swiss Chocolate. Mountainous areas are good for dairy farming. Cows can eat the grass of high mountain meadows. Plowing and harvesting the highlands is labor intensive and difficult.
Swiss cheese and chocolate are both product line extensions from simple dairying. Before the days of widespread refrigeration, it was hard to trade milk over long distances. The milk would go bad within a few days of being produced by the cow. The difficulty of transporting raw milk limited the money that could be made by a traditional dairy farmer. Rounds of cheese on the other hand can last a long time. They are expected to age. They are also easily portable. Enterprising Swiss farmers generated recipes for making cheese that were not duplicated in the cheese made in neighboring countries. Emmenthaler and Gruyere cheese allowed middle-sized farmers to become rich.
The same story can be told about chocolate. Switzerland is justly renowned for its chocolate. (This author vastly prefers Lindt to just about any other brand of chocolate, including Godiva. If you buy your chocolate freshly made – which is the way to eat Godiva – you will still find that most Swiss cities have chocolatiers who can give the Belgians a run for their money.) If you think of chocolate in terms of cacao beans, it makes no sense that Switzerland would be a leading manufacturer of chocolate. Cacao is a tropical product. Chocolate trees do not grow in the Swiss Alps.
What makes Swiss chocolate so distinctive is the milk. This is why the Swiss became first renowned for making milk chocolate. Dairy farmers looking for a way to sell more milk found that mixing milk with chocolate into bars provided a way to sell milk that required absolutely no refrigeration whatsoever. The product could be wrapped in the factory and sold in stores without the store having to cut it into small pieces. Furthermore, everyone loved milk chocolate.
The Swiss chocolate industry was predicated on the existence of a large class of sophisticated middle-income farmers who could use dairy science to produce large amounts of high quality sweet milk. Dairy farming requires care and attention to individual animals that is difficult to provide in a large-scale plantation. Until the late twentieth century, when the food industry industrialized the production of milk, there were no large plantation economies that produced any form of global excellence in milk production. For a dairy industry to survive, one needed middle-sized farms, not giant landholders.
The Swiss Watch Industry worked the same way. Watch making and clock making are distinctive Swiss specialties. Switzerland has long been known for precision high quality clocks and watches. The watchmakers were highly educated, highly skilled upper-working-class/lower-middle-class people. Firms were small because everything required intensive personal attention from the master craftsman. An uneducated poverty population does not produce the master craftspeople required for precision machining.
Low Levels of Poverty and a Large Middle Class – Low Crime
This one is pretty obvious. Low levels of poverty reduce crime.
No one has to steal in order to survive. Swiss in economic distress qualify for free medical care, public housing, and a government check to pay for living expenses.
Poverty produces marginalization and feelings of exclusion from society. This creates rebels who strike out at members of mainstream society, vandalizing property and victimizing “oppressors”. If people aren’t poor, then people aren’t marginalized.
Women who have to work multiple jobs and can’t afford day care can’t watch their children. Unsupervised children are more likely to be delinquent, if anything because they find delinquent friends. Europe in general, and Switzerland in particular, have readily available publicly funded day care. This reduces the unwatched child problem.
An Absence of Swiss Against Swiss Violence – Low Unemployment
Gregory Hooks, the development sociologist, argues that “War is Development in Reverse.” Civil wars and popular insurrections undo generations of economic growth. Spanish economic development was continually set back by its non-stop wars between monarchists and secularists. The final Spanish Civil War, the one in the 1930’s that brought Franco to power, was particularly bloody. The American South was gutted by being the battlefield for the War Between the States. Sherman’s March to the Sea was not wonderful for the Georgia economy. The long tradition of peace in Switzerland meant that Swiss economic growth could continue with no interruptions.
An Absence of Swiss Against Swiss Violence – Low Crime
This point speaks for itself.
A High Willingness to Be Regulated by People In One’s Community – Low Crime
Switzerland is a conformist society. Rugged individualism and just-for-the-hell-of-it deviance are not appreciated. Wild-man behavior is generally condemned. This explains in part why Switzerland has very few gun deaths – despite virtually universal possession of firearms. All Swiss males are required by law to serve in the Swiss Army. Their military obligation includes keeping a combat rifle and ammunition within their household. The Swiss keep their guns in secure lockers, and only use them for military purposes or hunting. Americans leave guns loose around the house or in night tables. They get drunk and play wild shooting games. They wave guns around in domestic arguments. No surprise – a lot of Americans get shot.
One indicator of socially responsible behavior is safe driving. Switzerland has one of the lowest rates of automobile fatality of any country.
No nation on the table has lower rates of road death than Switzerland. The United States has more than five times the rate of automobile fatalities that Switzerland has. Americans love speeding. Americans love drinking and driving. Americans love talking on their phones while driving. The Swiss don’t do that. Now, arguably Switzerland has more mountain roads than the United States does. People drive more carefully when there is an open cliff on one side of them. However, most people’s driving is in valleys or in cities. Responsible driving tends to be an internalized habit. Strong social conformity and strong moral regulation makes Swiss behave themselves on the road. The United States is the country of Fast and Furious, Death Race 2000 and the French Connection. Our heroes drive on the wrong side of the highway at 120 mph. Our heroes also take justice into their own hands, because everyone knows the cops are incompetent wimps. A culture of the good-guy-who-breaks-all-the-rules is going to be a culture that creates a lot of deviance.
A High Tolerance of People with Other Cultures and Languages – Low Unemployment
Americans worry that immigrants will take jobs away from native born citizens. Levels of hostility to immigration are very high. Switzerland in contrast is by international standards extremely friendly to foreign immigration. Over 25% of their population is foreign born. In Europe, only Luxembourg has a higher rate. Luxembourg is very small. In the United States only 14% of the population is foreign born Many people think that number is much too high.
Immigration has been central to Swiss economic success. Immigration was the basis of their most important industry – watchmaking. During the era of the religious wars in the 1500’s and 1600’s, Geneva had a reputation for religious tolerance. The other major center of religious tolerance was Amsterdam. Jews fleeing persecution went to Amsterdam. Protestants fleeing persecution in Catholic countries went to Geneva. (Switzerland had Catholic cantons too for Catholics who wanted safe havens.) There were two major waves of Protestant immigration into Geneva, one in the late 1500’s, the other 100 years later around 1685. The Protestants were Huguenots, who came from France.
The Huguenots were skilled artisans. Some were goldsmiths. Some were weavers. Some made the elaborate ornamentation used in courtly costumes, such as braids and embroidery. All of these occupations required some ability to both use machinery and to make machinery. The machinery had to be able to handle small parts. It was a natural transition from making machines that could make three dimensional ornaments out of thread to making machines that could make gears for clocks.
The Huguenots were also bankers. They were instrumental in establishing Switzerland as a leading international center for finance. Furthermore, the elaborate connections between Huguenot communities in Switzerland with those in the Netherlands and Britain facilitated Switzerland’s entry into trans-European trade.
Immigration has been good for Switzerland historically. The synergy between the Swiss economy and migrants bringing skills continues to the present day.
A High Tolerance of People with Other Cultures and Languages – Low Crime
It would be too extreme to say that the Swiss are never racist – or that the Swiss are completely free of ethnic prejudice. There have been referenda to restrict immigration into Switzerland; those referenda lost by a wide margin. Where ethnic intolerance and racial hostility exist, they contribute to a culture of marginalism. Marginalizing people encourages them to become deviant.
Switzerland’s high level of tolerance reduces the salience of these kinds of factors. One obvious indicator of this is that French speakers do not particularly fear German speakers. German speakers do not particularly fear French speakers. Compare this with Protestants and Catholics in Northern Ireland, or Arabs and Jews in Israel. Northern Ireland and Israel have long histories of ethnic violence. Switzerland has almost none.
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The Swiss formula could not necessarily be mindlessly applied to other nations. Swiss culture and social institutions come from a long history – a history in which the Alps played a significant role. That said, many of the features of Swiss society are quite admirable.
Much of the rest of the world adopts American culture and institutions. Americans are often happy to adopt the music or the food from foreign countries. Maybe we should think about adopting social institutions too – if those social institutions can be shown to work.
A lot of what makes America great was born on American soil. But this does not mean we cannot learn from others. Switzerland outperforms us in so many ways, they must have SOMETHING we can borrow.