Should Switzerland’s ‘happy capitalist’ model be the gold standard?

Sweden and Switzerland often get confused but a recent op-ed in the New York Times raves about the Alpine nation as the less socialist but more successful utopia. Should Switzerland’s model of capitalism be an example for the world?

© Keystone / Laurent Gillieron

The postcard of a rainbow soaring above the snow-capped Alps is the quintessential imageExternal link of Switzerland. While the country has its problems, the author of the opinion piece is right: the people are richer, and the income gap is pretty narrow relative to most countries.

But this isn’t the whole story as the more than 1,000 reader comments pointed out. One wrote the Swiss “miracle” is built on “tax avoidance and funneling of global business revenue through this singular little country”. Another reader notes how slow progress has been on gender equality with the last canton giving women the right to vote as late as 1991.

What is perhaps the most overlooked reality is that the capitalist model might be working for Switzerland, but it hasn’t always been so easy on other countries. The country has a history of turning a blind eye to some shady company dealings beyond its borders (see here the latest on the multi-million-dollar Anglo Leasing corruption scandal in Kenya.)

Several Swiss companies have said that things need to change. The CEO of Geneva-based commodity trader Sucafina, recently admitted in an interview in Le Temps, that we need to reinvent capitalismExternal link. 

What do you think of the op-ed? Should Switzerland be a model? [e-mail]

And in other news:

Indigenous people’s representatives from Brazil are calling on Switzerland to back away from the planned Mercosur free trade agreement, arguing that signing it amounts to “genocideExternal link” as forests burn in the Amazon. Swiss commodity traders are square in the middle of this as land is being cleared to make way for gold, soy and palm oil production.

An in-depth investigation by the New Yorker found that indigenous lands in the Amazon are under more threat by the expansion of illegal gold miningExternal link, much of which ends up in refineries in Switzerland. While big companies profess ethical buying practices, the author writes, “Brazilian government’s unwillingness to regulate the supply chain insures that “dirty gold” finds its way into the market, much as blood diamonds do.”

Pharmaceutical companies are going to court in the US and Spain over R&D costs. In the US, the government has accused American drug company Gilead Sciences of profiting from taxpayer funded researchExternal link for its HIV-prevention drug without paying royalties. In Spain, Swiss company Novartis has filed an appeal over a decision by a federal agency to make public the information about the therapeutic and financial criteriaExternal link used to come up with the price for its immunotherapy Kymriah.

This is triggering a larger discussion about drug pricing transparency as well as who pays for and who benefits from the millions invested in R&DExternal link for expensive treatments.

What’s coming up? I’ll be writing the next newsletter from the UN Business and Human Rights Forum in Geneva.

Keep in touch.