Why is Switzerland so successful

theme - wealth

“More alms recipients from Switzerland - another shipload on the way.” This was the title of a short message in the “New York Times” of March 3, 1855. In fact, more Swiss people left their homeland in the middle of the 19th century than ever before. Due to population growth and structural change, countless people could no longer find work in agriculture and became impoverished. Job seekers fled to the cities, where initially there were not enough jobs either. The beggars from all corners of the country were sent back to their home communities, some of the needy were also locked up in poor houses and banned from marriage so that they could not pass their misery on to future generations.

Today the world looks different: The Swiss are the richest people on earth. The average net wealth of an adult is more than half a million dollars, as calculated by Credit Suisse in its “Global Wealth Report 2016”; the Swiss are now eleven times more affluent than the world average.

The rise of the country began in the second half of the 19th century when, in the course of industrialization, railway construction and factories created jobs. In addition, a system of social insurance was set up to protect workers and farmers from poverty. But that in itself is not so unusual - something similar happened in neighboring countries at the time.

What fundamentally differentiates Switzerland from its neighbors and what still distinguishes it today is its foreign policy situation. At the Congress of Vienna in 1815, the surrounding great powers declared Switzerland a neutral buffer zone in the middle of Europe. This turned out to be a great advantage, because it kept Switzerland largely out of armed conflicts.

In 1880 the children's book “Heidi” was published, which described Switzerland as an idyllic mountain country, and the country was already on the way from a farming state to a trading nation. Without having to take into account political and military alliances, one exported its products all over the world and bought raw materials internationally. “Swiss entrepreneurs, mostly family-run, built up global market observation capacities throughout Europe and also successfully expanded their business in America, Asia and Africa,” writes historian Jakob Tanner.

Economists and historians are relatively in agreement: The early internationalization of Swiss industries and access to foreign markets, goods and services made Switzerland rich. While other European nations were involved in wars, the country was calmly building its economy. Political neutrality ensured stability and a hard currency: the franc.

However, Switzerland was also involved in European colonialism through its trade connections. They did not own any colonies, but Swiss companies cultivated plantations in South America and Africa. And when the major European powers decided to abolish the slave trade at the Congress of Vienna, Switzerland was unimpressed. As early as 1740, business people from Basel were trading slaves and cocoa for the export hit chocolate. And Alfred Escher, the founder of the Schweizerische Kreditanstalt (today Credit Suisse), was the offspring of a patrician family whose family tree extended to the highest political levels. The money that Escher had available to set up his business came from his father's grocery trade, and there is evidence that it also came from a coffee plantation where slaves worked.

The stability of Switzerland was particularly beneficial for the banking sector. In addition, there was banking secrecy, which made the Swiss banks a place where foreigners could hide their money from the tax offices in their countries. In addition to the European money nobility, dictators and corrupt politicians also hoarded illegal funds in Swiss accounts, such as the former Filipino presidential couple Ferdinand and Imelda Marcos, the former Haitian president Jean-Claude Duvalier and the Nigerian general Sani Abacha. In the past few years, when data records about assets parked in Swiss banks were stolen several times and offered for sale to foreign tax authorities, this led to violent disputes with countries such as the USA and Germany, who accused the Swiss of aiding and abetting tax fraud. In addition, the Swiss banks were repeatedly criticized for their role in World War II because they enriched themselves by managing the assets of victims of National Socialism. This chapter of Swiss economic history was not dealt with until the 1990s.

In addition to the banks, Switzerland is now home to many large companies, such as the chemical and pharmaceutical industries. Two of the largest corporations, Roche and Novartis, are based in Basel. There are also successful companies in the light metal industry, electrical engineering, mechanical engineering and the food sector: Today, the Nestlé Group is considered the largest food manufacturer in the world, which is constantly criticized by human rights organizations, among other things because in some poor countries it is an expensive product made from water has made.

In addition, many foreign companies have settled in Switzerland, which appreciate the low taxes and the business-friendly politics. The companies with the highest turnover in Switzerland are the international raw materials traders Glencore, Vitol and Cargill. They often make their billions without the raw materials ever touching neutral Swiss soil - and in return, for example, in African mines, let workers toil under inhumane conditions, which regularly earns them criticism from NGOs.

But there is still the right of the population to have a say. In 2018, citizens are expected to vote on whether Swiss companies must comply with binding rules for the protection of human rights and the environment in their activities abroad - as they already exist in Switzerland. If the majority votes in favor, Switzerland would be one of the first countries to legally enshrine the UN Guiding Principles on Business and Human Rights. And that in turn would not be atypical: After all, the success of the Swiss economy also requires a good deal of innovative spirit.

The American Express: James Dimon (61), banker

James Dimon has been at the helm of the major US bank J.P. Morgan Chase & Co. He is one of the highest paid top executives on Wall Street. As early as 2011, he received $ 17 million in bonus payments on top of his $ 1 million base salary. After a bachelor's degree in psychology and economics from Tufts University and an MBA from Harvard Business School, Dimon made a steep climb, with positions at American Express, among others. In 2005 he moved to the helm of J.P. Morgan and maneuvered the bank as one of the few major US banks without a loss due to the financial crisis. However, this success did not come completely out of nowhere, because Dimon had a family background: even his father and grandfather were securities dealers. In 2012, however, James Dimon's reputation suffered slightly after J.P. Morgan dealers speculated about $ 2 billion within a few weeks and the bank also had to pay $ 13 billion for questionable mortgage deals. The past financial year (2016) J.P. Morgan then completed more successfully than ever before: Dimon received a total of 28 million dollars for this - and on top of that, he increased his equity capital by more than 150 million dollars, as the shares of American banks rose rapidly after Donald Trump was elected.