The fundamental error of hierarchical economic thinking is that good management at the upper level has any chance of working down to the lowest level. It does not. However good management at the lowest level has every chance of working its way up the food chain.
Now imagine a world in which tribes or ethnic groups establish nation states with little land attachment except to a designated city state to which all are enrolled as citizens. This even allows dual citizens at the least and arrangements such as made by italy with long gone non residents. After all this means exactly two things. One the right to vote and two the right to buy a property in the designated city State.
After all that the population goes where they are welcome and can prosper. The Swiss merely prove my point by having done just what i say.
Economics Everywhere, Politics Nowhere: The Benefits of Swiss Decentralization
October 4, 2018
https://www.lewrockwell.com/2018/10/no_author/economics-everywhere-politics-nowhere-the-benefits-of-swiss-decentralization/
Is there any hope in the Western World that individual citizens can
win some release from the relentless and imprisoning growth of
government? In the US, government spending,
a reasonable proxy for their power over us, increases every year,
except for a few minor blips. The citizens’ situation becomes more and
more dire. We have precious little say and little influence over our
taxes, our health care, our energy and water supplies and costs, not to
mention the social rules with which the government constrains us. The
number of rules and regulations, using the proxy of pages in the Federal Register, also increases every year, and very few rules are removed. The government closes in on us more and more every day.
There is one western country that we might look at to see a glimpse
of hope. That country is Switzerland. In a small landlocked country with
precious little in the way of natural resources except water, the
people have created a high level of prosperity based on innovation and
creative capitalism.
100% Economics, Zero % Politics
Prior to its 1848 constitution, Switzerland was a confederation of
states, each of which was sovereign and independent, bound together by a
treaty of mutual defense from external aggression. As a country, it was
the most economically developed in Europe. It was religiously and
ethnically diverse, highly innovative and highly productive. Huguenots
expelled from France in religious wars started the Swiss watch industry,
and German protestants escaping Catholic oppression founded major
industrial companies. There was a focus on knowledge and education to
compensate for the lack of natural resources, and the Swiss were
globally networked and energetic traders.
“Economics was everywhere and politics nowhere” was a phrase used to
describe this productive, energetic, innovative, decentralized trading
nation in the mid-nineteenth century. What a wonderful picture of
economic freedom unencumbered by political extraction is conjured up by
that description.
Switzerland has been able to retain some of these characteristics
despite the predations of the twentieth century. It stayed on a gold
standard until 1999, and resisted internationalization until it joined
the UN in 2002. In fact, internationalization is what has eroded
Switzerland’s uniqueness as a nation. The influx of
internationally-oriented MBA’s and the McKinsey mafia is dragging
Switzerland down toward the lowest common denominator of statism and
interventionism. The EU aims to get Switzerland to sign a bilateral
agreement which will inevitably lead to Brussels gradually imposing its
multicultural socialism, just as it did on the UK.
Nevertheless, Switzerland has at least six structural advantages
which will keep it ahead of its mediocre peers for a while longer.
1) Decentralization
Switzerland remains a confederation of 26 cantons. Its more
centralized than prior to 1848, but the functions of the central
government are limited. There’s a national constitution, a national
military and security force, a single currency and a central bank, and a
national foreign policy. But the people have been able to keep the
powers of the central government enchained to a greater extent than in
the US. James Madison promised, but his Constitution was unable to
deliver. The Swiss have done better.
2) Subsidiarity
Subsidiarity is the principle of
resolving all problems and issues at the lowest level. Most taxes are
imposed at the municipal and canton level. The federal take is limited
to about 20% of total tax payments. This starves the central government
beast. Citizens are more engaged around their local governments and
their taxing and spending decisions. And they can vote with their feet,
moving to another town or canton if they feel it will improve their
circumstances.
3) Direct Democracy
In Switzerland, the people are sovereign. One way their sovereignty
is maintained is through regular referenda, in which the people vote on
matters of national policy, laws, and proposed constitutional changes.
There is typically a high voter turnout for these referenda, and the
people take direct democratic control of their government seriously.
4) Free Trade
There is little debate about free trade in Switzerland. It’s an
imperative. It’s a country heavily dependent on imports of basics —
energy, food, commodities. It therefore developed a strategic exporting
industry strategy: unique high value products and services meeting
global demand. Watches are the famous example. Today, it’s biotech and
other technologies. Always, free trade has been the binding condition to
Switzerland’s prosperity.
5) Neutrality
In foreign policy and diplomacy, Switzerland is famously neutral and
non-aggressive. It goes with global free trade — creating enemies would
be counterproductive. Switzerland has a military, and compulsory
military service, but for defense against external invaders only. War is
the number one barrier to economic progress, and political
reconstruction after war is often a worse disaster than the physical
destruction of war itself. Switzerland has avoided all this.
6) Entrepreneurial innovation
Switzerland ranks fairly high in the list of countries for ease of doing business, although its ranking has deteriorated in
the 21st century. It’s easy to start a company, taxation is relatively
low and laws are transparent. Numerous international companies choose
Switzerland for their headquarters. Innovation is embedded in education
and in a network of research centers, representing investments in people
and knowledge. It’s in the individual psyche and the nation’s
institutions.
Not perfect, but better
Switzerland is by no means perfect as a nation-state. The whole
concept of nation-states is detrimental to the individual lives of the
people who live in them and form them, and the concept calls for a lot
of disruptive innovation. Maybe it’s the Swiss, with their tradition of
decentralization, subsidiarity, individual initiative and a free trade
in ideas who will be the ones to implement the innovation. That is, if
they’re not overwhelmed by the internationalists at the EU, UN, IMF and
McKinsey before they can break out. It’s economics versus politics. We
hope for economics everywhere and politics nowhere, but it’s proven
impossible to maintain. The fact that economics once prevailed in
Switzerland gives us hope to believe they could re-establish its
primacy.
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