Jakob Tanner's history of twentieth-century Switzerland shows that, at a time of widespread malaise in the West, discontent exists even in the richest small state in Europe. It explains how elites have used the complex machinery of Swiss democracy to acquire and concentrate wealth and power, as their counterparts did in other developed states, and how a sophisticated populist right has now manipulated that same machinery to wreck Switzerland's relationship with the European Union (EU) and with neighboring states. The Swiss Volkspartei (People's Party) has the distinction of being the first successful party on the European populist right to require its government to suspend an essential element of the EU's four freedoms, namely, freedom of movement. In 1991, under the direction of a Swiss billionaire, Christoph Blocher, an old party of the right transformed itself using elegant posters and sophisticated propaganda. It used the peculiar Swiss popular initiative of the plebiscite against all the things that such groups dislike: Brussels, the European Courts of Justice, human rights, Muslims, immigrants, and foreigners. That same year, the Lega dei Ticinesi, a right-wing party in Canton Ticino that uses satire and mockery to defame the elites, began its own campaign against the existing order. The People's Party initiative in February 2014 against the EU's freedom of movement passed with 50.3 percent of the vote. As a result, a successful initiative immediately became an article in the Swiss Constitution. The sensitive instruments of direct democracy make Switzerland a laboratory of the new world economy. In September 2016, Canton Ticino passed an initiative to require Swiss employers to hire “Our Own First”—and not the Italian workers who commute daily across the border to work in Swiss industries. This is another violation of Switzerland's agreements with the European Union.

Switzerland has a long and complicated history that is not easy to understand. Jakob Tanner takes for granted certain underlying historical factors; these nevertheless deserve explication because they reveal structural and historic attitudes that make Switzerland like no other place else but that, at the same time, embody trends in European history that its neighbors share. The first is communal democracy. Swiss history began with a unique act and a unique assertion by three mountain communities in 1291: “We have also vowed, decreed and ordained in common council and by unanimous consent, that we will accept or receive no judge in the aforesaid valleys, who shall have obtained his office for any price, or for money in any way whatever, or one who shall not be a native or a resident with us” (http://www.lexilogos.com/declaration/suisse_pacte_tableau.htm). The three communities that signed the agreement—Uri, Schwyz, and Unterwalden (now divided into Ob- and Nidwalden)—still exist and still reject “foreign judges” in their valleys, though now they call them the European Union. The Federal Charter asserted the sovereignty not of the individual but of the community, the Gemeinde, and the founding communities are still sovereign and still wary of foreign authority. Tanner shows how the new populists have used these traditions to strength anti-EU sentiment.

The second factor concerns the survival of ancient forms of rule. Modern Switzerland combines many archaic constitutional structures with some of the world's most advanced and democratic machinery. The third is the “bottom-up economy,” i.e., the weak growth of towns; the high degree of specialization; the concentration on goods that have high value but small factor inputs (e.g., watches); the slow spread of railways; the presence of water power and mills; the absence of coal; the high rate of savings; the geographical concentration of economic activities in certain regions where peasant households supply the work force; the accumulation of liquid capital in towns (and the development of banks to invest that capital); the absence of patent restrictions until 1907—all of this created an economy nestled neatly in the network of jurisdictions and authorities, communes, cities, and cantons that crisscross Swiss political reality. The fourth factor is the jigsaw puzzle of language and religions: the areas in which one of the four languages is spoken may not correspond to a religious community, while Protestants and Catholics frequently lived in the same canton. The autonomy of the village community adds to the complexity of language, religion, politics, and economic activity. The fifth and final factor is neutrality buttressed by a militia army: until recently, every adult male had to serve in the army and defend Swiss neutrality against aggressive neighbors.

Tanner takes a critical look at all five elements. Most of the narrative rotates around the complex questions of how and in whose interest Swiss government actually works and what changes allowed the elites to maintain their power from the late nineteenth century to the end of the twentieth century. Tanner explains how the business elites, members of the senior civil service, politicians, and professionals created a unique Swiss system of rule. Switzerland was the first country to develop an institution called Gesamtarbeitsverträge (Joint Work Agreements) between management and labor. Private agreements on division of markets and labor practice took the place of government intervention or legislation. An American study observed in the 1920s that nowhere else in the world was the “corporate form of organization” so widespread. No antitrust legislation disturbed the peace of these private Kartells. National business and trade organizations representing the various industries became an essential part of what is called Vernehmlassung: the compulsory consultation with the relevant sections of a particular agency, which the Bundesrat (Federal Executive) is obliged to conduct, by law, as a part of the drafting of new legislation. As Tanner explains, formal consultation by the government has allowed private Kartells to write their own legislation and present parliament with sophisticated drafts drawn up by the Federal Executive. Only in Switzerland does such an amazing procedure—where everybody is consulted, and all go away satisfied that the “Sovereign,” as the people of Switzerland are known, had approved the pro-business legislation—seem entirely normal. In other words, the Swiss use voluntary organizations to control the economy in a kind of private corporatism. It looks democratic and in a way it is, but it also assures that the position of the ruling elites has never been seriously threatened.

Uncomfortable moments nevertheless arose when the left demanded higher taxes on the rich. The perfect democratic answer, as Tanner explains, was the Finanzreferendum, a uniquely Swiss way to prevent direct taxation changes. Referenda and so-called initiatives require the support of not only a majority of the citizens but also a majority of the cantons. Rural, small, mostly Roman Catholic, mountain cantons are, as states are in the US Senate, grossly overrepresented. The tiny, twin cantons of Appenzell Ausserrrhoden and Appenzell Innerrhoden, with a total population of less than seventy-one thousand, elect two members of the Upper House—as does Canton Zürich with almost 1.5 million citizens. The rural cantons loathe taxation and normally join together to create a majority to block a tax proposal. The complexity and responsiveness of Swiss institutions make the simplest reform very difficult, which is why it took nearly fifty years for a unified penal code to be adopted and seventy-one years for the Canton Ticino to adopt the metric system.

The Swiss state was cheap to run, not least because of a natural acceptance of pro bono public service. In fact, free or voluntary service was part of the normal activities of various members of associations or bureaucracies. Compulsory military service for all adult males provided a model for public service as a civic duty; in fact, service in the cantonal parliament and even on the national level offered no salary. Some elements of that simplicity survive. The two houses of the legislature only meet four times a year for short sessions, and, until recently, most members claimed only modest expenses. The end of the Cold War made the large standing army superfluous. Now that it has shrunk to one-quarter of its former size, it no longer functions as a unifying experience because everybody is no longer required to serve. The militia politician on the local level who served pro bono in the Gemeinderat as a part-timer has become less common. Many communes have become too small, in fact, to bear the burden of independence and have consequently voted to merge with neighboring communities.

Tanner's analysis and narrative are rich. His treatment of the years from 1914 to 1945 is exemplary. There are passages that explain how the Swiss government managed to maintain neutrality in both World Wars. He devotes more space than most modern works do to the disgraceful collaboration with the Nazi regime during the years 1940 to 1945, and to the scandalous treatment of Jewish refugees. He shows how the postwar boom—a time when the Swiss could sell anything and everything to a ruined Europe—made the Swiss very rich, and how the end of that boom in the 1970s created an economic crisis and led to the destruction of traditional small enterprises and the emergence of big conglomerates. He also reveals how international neutrality turned into a tacit alliance with NATO until the collapse of the Soviet system.

Tanner provides an excellent, concise description of the destruction of the old business model in the 1990s and its replacement by a new type of self-enriching entrepreneur—men like Christoph Blocher and Martin Ebner, self-styled pioneers of “shareholder value” but actually the first Swiss entrepreneurs to pay themselves huge salaries. Tanner calls them Abzocker-Pioniere, or “rip-off pioneers.” Shareholder value, the key neoliberal slogan, and management buyouts literally destroyed the traditional Swiss business model of ownership. After 1988 a quarter of a million workers thus found themselves working for new owners. Famous names vanished: Sulzer, Saurer, Swissmetall, SIG, BBC, Alusuisse, and Swissair. By 2011, 42 percent of CEOs and 36 percent of board members were no longer Swiss. Viktor Vekselberg, a Ukrainian Jewish billionaire on the edge of legality for years, used the huge assets of his Renova group to buy the venerable Swiss firm Sulzer, founded by Salomon Sulzer-Bernet in 1775. Since the Tanner book went to press, Russian billionaires have been outdone by Chinese billionaire Ren Jianxin, whose ChemChin company paid $43 billion for the Swiss company Syngenta, one of the world's largest agrochemical companies. This is, no doubt, just the beginning of the Chinese takeover of Swiss businesses.

Switzerland has infamously become the prime example of a hypocritical society whose wealth rests on money laundering. Tanner fully describes the resulting scandals in the book. Union Bank of Switzerland (UBS), one of the largest banks in the world, had to be saved after it got involved in the American collateralized mortgage swindles, and the US government has pursued Swiss banks relentlessly. Bank secrecy was abolished in October 2014, after eighty years in which it had been a criminal offense to reveal the beneficial ownership of a bank account—and through which billions of dollars of client money was able to evade taxation. The humiliation of UBS (the flagship of Swiss banking), the vast sums paid out to tax authorities, and the intervention of the Swiss National Bank to keep UBS in business all began a process that ended with some of the oldest Swiss banks and most of the famous ones admitting guilt and paying large fines.

Tanner ends his book on an optimistic note: Swiss scandals have come to light, and the Swiss have faced their past with courage. They will likely face and overcome the present crises without the need for regime change. If Tanner's hopes come true, Switzerland will have managed once again to be the European Sonderfall, i.e., the historical exception to European-wide developments.