Gregory A. Fossedal, Direct Democracy in Switzerland, 2002.

Foreword

Important books must either impart vital information or expose an important new idea. Interesting books must tell a good, human story. In Direct Democracy in Switzerland, Gregory Fossedal has done something rare -- he's done a bit of all three.

The result is a highly readable narrative, a tale of William Tell defying arrogant lords, and brave mountain men and women fighting off gangs to establish independent towns and villages. Some of these have enjoyed a substantial element of local autonomy or democratic practices, going back more than five centuries.1

At the same time, Fossedal tells how one of the world's countries least blessed with physical resources has come to be, arguably, the most successful economy in the world, and how a nation with pervasive religious and linguistic divisions enjoys profound social tranquillity -- information that is surely important to people around the world.

Finally, Direct Democracy in Switzerland raises important issues for the future of democracy itself. In this it resembles Alexis de Tocqueville's Democracy in America, which suggested the need for political freedom to a Europe straining under the dead hand of aristocrats and top-down, elitist politics. For, as Fossedal notes, the Swiss democracy is very different from any other system in the world. Switzerland's direct democracy -- in which the people, by initiative and referendum, wind up voting directly on a large number of policies that affect their lives -- is sufficiently different that it might be called, as the former foreign editor of The Economist, Brian Beedham, once suggested, a "different system" altogether.

Certainly, democracy in Switzerland is very different in some important features than democracy in America, Asia, or the rest of Europe today. Switzerland thus may function as a kind of laboratory. It has a purity in applying the democratic idea, and it has a long history as a functioning cluster of democracies. That history is more than three times as long as the next-longest-running democracy, the United States.

These attributes are precious because, as Morton Kondracke once observed, in political affairs it is impossible to set up scientific experiments and petri-dish control groups. Switzerland's long experience with its unique type of democracy, not always under the most favorable material circumstances, enables other countries with Swisslike diversity to make analogies to some of its experiences. "Like policies," as Abraham Lincoln wrote, "imply like results."

It is possible, Fossedal notes wryly, that even Americans might learn something from the Swiss experience.

In most Western democracies, the people make only a small number of decisions about economic or social policy for themselves. Instead, we hire experts and elect representatives to make many of these decisions for us. Every now and then -- every two, four, or six years -- we hold another election to review the last 10,000 or so decisions by those leaders, and, vote for one of two alternatives who will handle the next cluster of thousands of decisions.

Switzerland uses some of these devices too, but to a much greater extent than other democracies the voters make dozens and even hundreds of the particular decisions themselves. The Swiss have a highly devolved system of federalism in which many decisions that would be made by the federal government or "state" governments in other countries are made by cantons (some fewer than 100,000 in population) or communities (of which the average is about 3,000 persons). Where the Swiss do employ professional politicians, both their pay and their power pale against the clout and compensation of a typical state legislator or even city council member in much of the U.S. The federal parliament meets about twelve weeks a year, its members earn perhaps $40,000 in compensation, and they have virtually no full-time staff -- not even offices. The Swiss president is the chairman of a seven-member committee that alternates once a year. The supreme court is comprised of some four-dozen judges, many of them without a law degree, who have no authority to discard federal laws, even if they deem them unconstitutional.

At the core is the Swiss constitution, which, as Fossedal notes, is literally written by the people. More than half its provisions, as of the late twentieth century, were derived from popular ballot initiatives or referenda voted on directly by the people.

On the other hand, every male from age twenty to fifty, with a very few exceptions, is a member of the Swiss army. Although it is difficult to measure, the typical Swiss adult probably spends several more hours per week or month in volunteer service to the cantonal, or community government, than does his or her counterpart in Germany, Japan, Britain, or the U.S.

Does all this matter? Or does Swiss democracy differ from U.S. and European representative democracies only in trivial ways?

As Fossedal narrates the story, one comes to the conclusion that Swiss democracy does differ importantly. We tend to think of "democracies" in Europe and the Americas as more or less the same. There is, however, a different animating spirit to the Swiss democracy, and that different spirit produces different results.

By analogy, Fossedal reports, the representative democracies are closer in operation and spirit to the highly managed, traditional equities markets. Swiss democracy -- direct democracy -- is a kind of Nasdaq exchange, something familiar to me after many years as president of that market. In both markets, the investor is ultimately sovereign. But in the one he exercises sovereignty himself, while in the other his control is far more subtle and indirect, a sovereignty filtered through a large number of intermediary elites and institutions.

Nasdaq, then, provides an economic analogy to Swiss politics. To many people, markets are indistinguishable in the way they work. Yet, as Nasdaq shows, seemingly small structural differences can have profound implications.

Like Swiss democracy, Nasdaq is an open, inclusive system. Nasdaq permits investors to control pricing and trade executions directly. Traditional markets do not. Nasdaq insists on competition for every trade; no monopolies are awarded or permitted. Anyone can subscribe to the information on what is available to buy or sell, and can receive that information in real time. The investor is at no disadvantage to the professional.

While these differences among markets may seem trivial, the implications for the country, compounded over time, are significant. Nasdaq has become a key element in economic growth, a key element in the great American dream machine.

Nasdaq provides investors a way to participate directly in companies of all sizes and all industries. Nasdaq's managers make no judgments as to the investment merit of any company. Nasdaq provides a fair market; investors decide on the risks they are willing to take. The goal is to have the merit of an investment decided directly by investors, not by market managers.

Direct Democracy in Switzerland starts from this assumption that the differences matter -- and proceeds to narrate how and why they do. Switzerland might be called the Nasdaq of democracies. With its highly decentralized system, its easy access for new entrants, and its relentless focus on the citizen "investor," Switzerland functions as a highly efficient political market. It brings ideas to people faster -- and with fewer means of choking them off in transit -- than perhaps any other political system in the world. If only on material grounds -- even if we care nothing about treating investors equally as a goal in and of itself -- Switzerland has given ample reason why this very special direct participation bears close study.

Fossedal is a more than capable observer to tell this story -- the story of a people and a political economy. His book is part docudrama, part financial reporting; a mix of think tank statistics and affable vignettes.

The author's affection for his object is not hidden and is, in fact, a necessary part of telling the story of a country. Were there no respect, and even warmth here, such a book could easily become arid and antiseptic, a kind of literary social studies film.

At the same time, Fossedal is an acute and objective observer. He sees Swiss flaws and reports them. To be sure, he does so with a sympathetic eye that keeps such flaws in perspective. His chapter on Switzerland and the Holocaust -- on the Swiss resistance to Nazi aggression and its well-meaning but ill-conceived (and at times stubborn) oversights on dormant accounts after the war -- is well-reported and cogent. One might even call it moving, as he gets at the drama and emotion of an issue that cannot be discussed only in footnotes to 1940s bank balance sheets.

Above all, perhaps, Fossedal has an attribute all too rare among the modern journalists and authors: a self-critical faculty that enables him to suspect when his own observations are biased. Quick to observe and illuminate, he has a Tocquevillian caution about pronouncing final judgments, especially ideological ones. Throughout the book, one has the feeling that Fossedal's first interest and passion is actually democracy itself, the notion of how debates are settled politically, rather than any socialist or libertarian or any sort of agenda.

In much Western discussion today, a love of "democracy," as Tocqueville observed, is basically "a tactic" for advancing the interests of a group or the economic program of a party. It is a means, not an end. Fossedal, it seems, cares about democracy itself; political equality and popular sovereignty as an end, not a means. His interest is not any of the specific companies, so much as the science of how a market is best conducted so all ideas (or companies), and all investors, benefit as much as possible.

We may yet find, in our materialist age, that this focus on first things, on making decisions in a fair way, and in disciplining the caprices of the rulers to the wisdom of the people, winds up being the key to material prosperity itself. In any case, there is a certain refreshing quality about a book that talks about politics as something that matters, something vital -- even something healthy and positive. Is democracy, like a capital market, capable of evolution and perfection? The implicit answer of Direct Democracy in Switzerland is yes, it is.

Indeed, if we consider the advances made in information flow, in the rise of consumer and investor sovereignty through the growth of stock markets and Internet technologies, what is more remarkable is the extent to which our political market has remained unchanged. It may be that those very forces that have revolutionized the world economy will soon lead to demands for a comparable increase in the responsiveness of our institutions of government.

This evolution, as Fossedal notes, may or may not be towards the kind of highly populist, highly decentralized political market sketched by Direct Democracy in Switzerland. It may, furthermore, be highly desirable for other democracies to be more like that of the Swiss, or it might be highly inappropriate and undesirable.

In this extensive report on the world's most distinctive democracy, he provides a valuable service. He has taken apart that most delicate and complex of organisms, a political regime, and shown us what makes it tick.

No sooner has democracy triumphed on the world stage, as The Economist noted in 1991, than a great new debate has begun -- the debate over what democracy is, and what it should be; over what is a higher stage of democracy, and what is a regression. No sooner do nearly all men and women agree that the people should rule, than we confront the seemingly prior question of what this means, and how it can best be accomplished.

Direct Democracy in Switzerland does not settle that debate. The debate is only just beginning. It will never be finally settled because, as Fossedal writes, "there is no end of history." But it is a worthy start to the discussion, an acute and insightful report on a subject that is, as an economist might put it, "on the margin."

It is, as well, a compelling drama, a good story by a writer who combines high ideals with a human touch. A great nation deserves a great work that defines, explores, and elaborates its truths and myths. In Direct Democracy in Switzerland, a great nation has received the telling in history and the placement in history it deserves. It should be widely read in America and Europe, and will, hopefully, have a significant influence on man's understanding and practice of democracy itself.

Alfred R. Berkeley III


Note

1. Modern Switzerland, with its present borders and basic constitutional provisions, was founded in 1848 following the SonderBundkrieg, or Swiss Civil War, of 1847. The Swiss confederation extends back through 1647 (when the first unified military command structure was formed) to the year 1291 with the signing of the Bundesbrief, or "federal charter," by the three "forest cantons" of Uri, Schwyz, and Unterwalden. This charter was written in Latin, pointing south for the immediate origin of its political ideas in Renaissance Italy and, through it, in Roman Republican thought. In Roman times what is now Switzerland was inhabited by Celtic tribes of which the most important, the Helvetii, has given the country its Latin name: confederationus Helvetica. Julius Caesar found the Helvetii stalwart adversaries with a tendency to do away with overbearing nobles. However we date it, Swiss democracy -- a regime in what we now call Switzerland, as distinct from the specific national state now in place -- goes, in places, back at least 800 years. Its roots lead straight back to antiquity.