Why is Switzerland the richest country in the World?

The richest country in the World

The answer to this question is simple, although the majority of people will answer something totally unrelated to it, mixing the consequences of the richness with its causes.

This seems to be an illness of the modern world where things seem to be upside down and causes and consequences are confused. Consequently, the great success of the socialist and egalitarian ideologies.

Normally, people think that the welfare state in Switzerland is responsible for the richness of that country. Arguing that other countries, like the Africans, would enjoy similar prosperity if they had similar welfare states.

The reality is just the opposite: Switzerland has a rich and generous welfare state because the country is rich, in other words, because there is “capital” to share.

If the welfare state and social policies were the cause of the prosperity then the Soviet Union, North Korea, Ethiopia or Albanian in communist times, Cuba or Venezuela would be the most prosperous and rich countries in the World.

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Swiss Franc, the strongest currency of the last 50 years. Image via tradingeconomics

After all no other place have so many welfare policies as a communist country, supposedly.

The problem with those communistic societies and with everything that is too “social” is that they never were rich in first place, let alone the richest societies on Earth.

For instance, the emigrants of Communist Vietnam never thought of going to China or Cuba but to Australia or the United States.

As well as in Switzerland, those two countries have vast welfare states because of the fact that they have something called companies (for now) from which they can subtract all the taxes necessary to pay for the welfare programs.

The existence of such companies is previous to the payment of those social programs.

During the XVIII and XIX centuries those companies were created and only later the welfare state appeared.

Those societies with more and better companies and more savings – citizen’s savings – were able to have more prosperity in the long run.

Such is the case of the Swiss, one of the richest countries in the World.

As we can see the strongest currency of the last 50 years does not belong to a country that exports a lot.

The key of that richness does not come from any imperialist mentality since the Swiss have not invaded any country in the last several centuries.

They are not rich because of having the biggest oil reserves in the World either.

They are rich for other and simpler reasons: such as the respect for private property in that country. Although they are not without their share of socialist mentality, the truth is that the Swiss is one of the countries where the socialist mentality is less strong.

To say it in some way, the percentage of Swiss people with a little common sense and knowing that choosing policies against property is bad is bigger than in most of the rest of the World.

The proof?

The main proof is that it is one of the three richest countries in the World in salaries, and the fact that private property is well respected there.

In fact there has not been any sort of leftish revolution there in the last 200 years.

Their system, on the contrary is based on political stability. A stability with less “progress” than many would like ant that has been key for Switzerland to maintain its Worldwide position.

A good proof of the Swiss people common sense was the referendum about the minimum wage in 2014.

They preferred to vote no.

The first thing that people think nowadays to sort out the crisis is to vote in some sort of referendum, thinking that if we had referendum such as the Swiss one often all problems would be sorted out.

Nothing farther from the truth.

As I said before, the relation cause-consequence is important here.

The Swiss still can resort to that kind of thing with some success for a simple reason: they are Swiss, and being Swiss means that the tendency to adopt bananan republic policies is smaller. We could say that the Swiss tend to vote with their heads.

Such a regime would not work in countries such as Spain, Greece, Italy or any other from South America, where bananan republic policies would win easily in every referendum.

In other words, the Swiss do well despite the referendums, not because of them.

The result of that referendum was that 77% of the Swiss rejected the proposed increase in the minimum national wage.

Their instinct told them that applying that rise would have been detrimental for the overall health of their prosperity as a nation.

If the referendum would have taken place in Spain the result would have been opposite with at least 77% of the people voting “yes” to the proposed increase in salaries.

This is because the bureaucratic and socialistic mentality is much stronger in Spain than in Switzerland.

If the country was one of the South American ones, like Venezuela, Colombia, Peru or Bolivia it would be similar.

What the masses of those countries do not understand is that it is because such measures that they do not have the prosperity the Swiss have.

Comparing Venezuela and Switzerland

In Venezuela it is forbidden to dismiss someone or to get rid of a defaulter, or to put your own prices. Result: total economic and societal collapse.

In Switzerland, on the contrary, you can do all that and quite easily. Result: one of the richest countries in the World for 200 years.

In other words, in Switzerland, where there is no dismissal cost there is almost no unemployment and there are big salaries.

On the other hand, in Venezuela, where it is forbidden to dismiss someone, the unemployment rate is quite high, but the salaries are low.

In Spain, where to dismiss someone is very costly, the salaries are average but the unemployment rate is devastating.

What the majority of Spanish do not understand – or Venezuelans – is that in order to have low unemployment and high salaries you have to have less social and protectionist policies.

They should stop having so much fear.

Or Switzerland or Venezuela.

Or more or less socialism.

Or more or less misery.

What cannot be is a lot of socialism, high salaries and no unemployment.

You can have socialism without unemployment, but you cannot have it with high salaries, at least for the majority of the population.

That is physically impossible.

If the socialist mentality has conquered the masses in the West, there is not much to do.