On June 14, Switzerland will vote on a referendum to cap its population at 10 million. Current projections don’t put the Swiss population crossing that number until 2035 or 2040.
This proposal would sharply restrict immigration once the population hits 9.5 million, followed by automatically withdrawing from EU freedom-of-movement agreements at 10 million. This represents the rural-urban divide in Switzerland; the more rural areas remain skeptical about immigration due to fear of cultural and demographic change, and the urban areas rely on immigrants for high-skilled labor.
The Swiss confederal system enables votes like this to happen. While this proposal may have meaningful support, Switzerland’s economy would be severely damaged in the process.
Hey, all. Peter Zeihan here. Coming to you from Colorado. Today we’re talking about Switzerland. We have a referendum that is coming up on June 14th, where the Swiss will vote to limit their population of the country to about 10 million. Right now, the population is just a hair over 9 million. And at current rates of population growth and immigration, they anticipate they’ll probably hit that 10 million number between 2035 and 2040.
The issue is twofold. Number one, the Swiss very, very, very jealously guard the right to have citizenship, and are notoriously, strict about it. So if you are from elsewhere and you want to become Swiss, it’s a very long, long, long process. There’s really only two routes these days. Option number one is family reunification.
For someone who happens to work in Switzerland and has achieved, citizenship. So somebody who’s gone it the hard way can then bring in their family. And then second, of course, is immigration via asylum claims. This is going to sound a little blanket, but as a rule, when you’re talking about Germans, they’re really, really not into outsiders. And when you talk about rural people, they’re really, really not into outsiders. And the population demographic overlaid with geography in, Switzerland means that the Germans, have a lot of rural territories in the north of the country, whereas the French, who live in a single corridor, it’s mostly urbanized. And the Italians who live up in the mountains, don’t really have much of a rural section at all.
So the cities think this is a horrible idea, because the Swiss economy basically is a services economy that deals with some of the most skilled labor in the world, and a population of 9 million is really can’t support that. So they really are dependent on high tech, high skilled labor coming in. And family reunification is a piece of that.
The rural regions see it more as a population swamping issue, because they’re not the ones who decide what happens day to day. Also keep in mind that this is not unique to Switzerland. This is a real issue across the entire world, especially in Europe. Despite what you might hear in the United States from the far right.
The Europeans are deeply, culturally wed to their, superiority. Which is a nice way of, say, kind of racist.
What is different about Switzerland versus the rest of Europe? Is most of the countries in Europe have what we would call a unitary government, where all the decisions are made in the national capital and that capital can impose their views upon the entire country. And so it tends to be more urban, tends to be more evenhanded. And from the point of view, if you happen to be on the hard right, tends to be a little bit more liberal.
You do have some countries that are federal, like, say, Germany. The U.S. system, by the way, is federal, where you’ve got a balance of regional and national powers, where you can have a more patchwork. But that’s not Switzerland. Switzerland is Confederal, and that means that the regions and sometimes even the individual cities actually have more power in many cases than the national government.
And this is why the Swiss are always, always, always, always having plebiscites like this. Because it’s really easy to get on the ballot and the federal government can’t do much to stop it. You also have to have a degree of unanimity among the cantons whenever something is up for debate. And in this case, that means the plebiscite really has an uphill path ahead of it.
But it only takes one canton to really make something a national issue. And that’s exactly what we’re seeing here. Support for this, plebiscite is reasonably strong. It has a decent chance of passing. That doesn’t mean it would be a good idea for Switzerland from an economic or political point of view. Part of it is the lack of details in the text of the plebiscite itself.
It says that when the country hits 9.5 million, the, government needs to simply remove, asylum as an option for even coming into the country. Now, that doesn’t have necessarily a national disaster in it. That’s more of a political issue. But if the country hits 10 million people, then Switzerland is supposed to automatically withdraw from all freedom of movement treaties it has with the European Union, which means overnight, the entire Swiss advance industry, banking system, research system, medical system would basically crawl to a halt because they wouldn’t be able to get the stuff that’s necessary to maintain the economy in its current form.
Also, this is a plebiscite. So it’s not like a 14,000 word document. It all fits into a couple of paragraphs. And that has the problem of basically throwing the ruling council of Switzerland to into a bit of a tizzy, because if this passes, they then need to come up with legislation that would pass them all the current ones.
So, its opponents have called it the plebiscite of chaos because it would basically absorb all political bandwidth of the country between now and when they hit 10 million. And there’s really no clear way to have their cake and eat it, too. If this was pass, it is the end of Switzerland as an advanced economy over the long run.
Now, over the long run doesn’t start until they actually hit that number. That number will probably not be met until after 2035. So it isn’t flipping a switch. But this is a great example of how populist pushes, especially on things like migration, don’t necessarily match very well with a policy that can allow the economy to continue at the growth rates and the wealth levels that they’ve enjoyed for the last century.
So I’m going to be watching this very, very closely. It’s a fascinating example of how political structures deal differently, based on how the constitutional order functions.
Yeah. June 14th, big day.
