Techne

Victoria Curzon-Price made a speech about Switzerland and how the confederation started. Switzerland's still radical decentralization is a very interesting topic, and the most interesting part was the referendum in Jura were individual communes could choose which canton they would belong to. Maybe in the future we will see more jurisdictions that are not connected by geography but by common ideas displacing the location for the flow? Curzon-Price might have a point that smaller countries make rent seekers more visible and have cleaner incentive systems. But alas, this is not always the case, as smaller countries often are more easy to rule and isolate.

Allow me to clarify my point through a comparision between Sweden and Switzerland.

Switzerland is culturally, linguistically and religiously one of the most heterogeneous states in Western Europe. Sweden is one of the most homogenous. Switzerland is a confederation. Sweden is a unitary state. Switzerland has one of the most inert; compromise filled and decentralized political systems in the world. Sweden is one of the most centralized nations in Europe. Swiss politics are down to earth and local. Swedish politics are national and visionary. In Switzerland plebiscites are binding for the politicians. In Sweden they are a tactical maneuver to disregard at will. In Switzerland a political proposition must pass a considerable amount of checks-and-balance before possibly becoming a law. In Sweden legislation is a straight highway for the parliamentary majority. Switzerland has one of the lowest fiscal pressures in Europe. Sweden has the highest. Switzerland is often at the top of statistics regarding economic freedom. Sweden ranks considerably lower.

Conditions for a centralized welfare state were thus particularly auspicious in Sweden. One could well say that if it did not succeed in Sweden, it would not succeed anywhere else. In Sweden, the people, its language, its culture and religion were homogenous. Centralized and egalitarian political structures need homogeneity in the population in order to be successfully implemented. Sweden was able to make its grand experiment since it had economic strength. But the experiment undermined the opportunities for growth and long range performance. Nowhere else the political class holds as much power over the citizens’ lives, but the development of citizens’ material standards has declined. If there is less to redistribute in total, everyone will loose eventually. The relative success of the last few years has been the effect of Sweden slowly leaving the cradle-to-grave welfare state behind and adapting to European conditions.

Thus it is not the size of a nation that matters, but its most fundamental principles of how it encourages experimentation, diversity, and liberty.

Mart Laar, former prime minister of Estonia, told us how Estonia emerged from the Soviet Union in a very impoverished state. But Estonia affected other ideas, and thus it took a different, liberal, path. It is not size, per se, that defines a country's course by ideas introduced. Sure, Laar is right that small countries have to be smart, dynamic, open and ready to learn to a higher degree than larger countries since they don't have the resources to fall back to. But yet again what is considered dynamic, open and what should be learnt from others is decided upon through ideas. Estonia has also enacted a very interesting experiment with e-government. It is an important move towards the 24h society and an impressive attempt to increase transparency, although I think that an unintended (?) consequence of cyberdemocracy will be that representative democracy will have a tougher time. In fact, coming from Sweden that has for a long time had a policy of transparency I have noted that much of the political proceedings then are made "off the record". Transparency must be followed by empowerment.

David Oddson, foreign minister of Iceland, gave an interesting speech on Iceland's economic woes (they had a 100% rate of inflation in 1983) and how liberalizations of the economy improved the situation. Certainly a inspiring speech, and we do need practical examples of liberalization, but I sometimes get the impression that liberals focus a bit too much on factors of the economy that are easy to measure with economics. Economistics is understandable, for such a long time we hade to fight the most economistic ideology the world has ever seen: socialism. But I feel that we need more to capture people minds for the cause of liberty.

I do have some thoughts upon the very national focus on the foundations of politics given in the speeches. I would like to point out the fact that perhaps it is the national state that has been a factor in the decrease of liberty. Its larger than the local level and makes it more impersonal, and open for rent-seeking, but still it responds very badly to our new globalised society. The future is not in small states, but in a clearly defined federalism (no, the EU is not even close to this).