On the significance of direct democracy to ensure social peace (part 3)

On the significance of direct democracy to ensure social peace (part 3)

How can we protect direct democracy in difficult times?

by Dr rer. publ. W. Wüthrich

In Part 2 of this series of articles the reader learned about the economic constitution of Switzerland in the Federal Constitution of 1874. Basically it still rests on three columns: 1. On the freedom of trade (now economic freedom) as a civil liberty of the citizen; 2. on the principle of freedom of trade and commerce as a guiding principle for the development of the economic system; and 3. on direct democracy – to provide a voice of the people in defining the key elements of the regulatory framework and setting the course for the future. The interwar period with the Great Depression of the 1930s and also the time of the Second World War were special epochs, because the foundations of the economic constitution were under discussion at that time. Peace agreements in the metal industry were settled and a total of ten popular initiatives were launched: five alone were about the preservation of direct democracy – especially in the economic field. The other five initiatives raised fundamental questions of economics. Are Adam Smith’s ideas still suitable even in these difficult times? Or is John Maynard Keynes the new shining light showing the way to the future? Or do Karl Marx or the Pope have ideas on how the grave economic crisis could be solved? Is it possible to implement the human right of the “right to work” in a liberal economic order? If so, how? Such matters were severely discussed and debated and finally voted on.
The following lines are an introduction into the topic of how to preserve direct democracy in difficult times. The other topics will follow in the next article.

Is direct democracy possible in the field of economy?

There were doubts about and even attacks on direct democracy after the First World War, not by extremists, but by the Federal Council and Parliament. Many federal politicians raised the question: Is the people – even in difficult times – really able to have a direct say in demanding and sometimes complicated economic issues and to decide on them?
The constitutional starting point of this dispute, which should last for the next 30 years, was as follows.
Article 89 of the Federal Constitution of 1874 regulated the optional referendum as follows:

“Federal acts and generally binding federal decrees that are not urgent must be submitted to the people for approval or rejection if 30,000 Swiss citizens entitled to vote or eight cantons so demand.”

This per se important detail of “urgent” federal decrees in the Constitution had not been taken note of for a long time, because it had almost never been applied before the First World War. That changed after the First World War.
Federal Council and Parliament declared more and more business drafts as urgent, and exempted them from the referendum and thus from the decision of the people. The problem was that nowhere had there been clearly defined what “urgent” actually meant. The proposals and drafts declared as “urgent” were usually limited to two or three years. The deadline, however, was often renewed repeatedly so that such a law or a regulation often remained in force for years – without a referendum. This was contrary to the basic principle of direct democracy. Alfred Kölz, professor for constitutional law, wrote in his book “Neuere Schweizerische Verfassung” (Modern Swiss constitutional history) of 2004, “Right was set which for years remained in force without full legitimacy.” He counted 151 proposals in the 1920s and 30s, which Parliament had declared a matter of urgency and implemented them bypassing the people without a referendum, which were exclusively of economic nature – a fact that was particularly striking. In the years 1929 to 1933 alone, there were 92 of such proposals. The “back door” that would allow Parliament to implement a proposal without referendum had become a wide “barn door”. Alfred Kölz writes, “Thus, a significant portion of federal decrees on economic issues was unconstitutional in three respects: They were exempted from the referendum, they contradicted the principle of freedom of trade and commerce and they were contrary to the federalist order of competences.” (p. 768) The main argument supporting this unconstitutional practice was – according to Kölz – that economic measures should not be exposed to the “randomness of a plebiscite”. This idea was also expressed in a debate that took place in the National Council at that time. (Protocol National Council 1933, p. 217) It was justified from the perspective of civil rights – according to Kölz – to speak of a “partial
collapse of the political system”.
Some examples: In order to protect the retail trade, the opening of new stores was banned in 1934. This decree was clearly directed against Gottlieb Duttweiler, who had begun to build up the Migros chain of stores. As a profiled personality in business and politics Gottlieb Duttweiler would certainly have taken the referendum against this decision. However, it was denied to him because this decree was classified as urgent by Parliament. With the same manoeuvers the imports of goods were limited, tariffs raised, the “Eidgenössische Darlehenskasse” (Federal Credit Bank) established, prices monitored, private railways and ship companies subsidized, the watch industry and the embroidery industry supported and much more. The respective decrees were limited, and were then partially renewed repeatedly. Gottlieb Duttweiler was not discouraged by the official ban but drove his mobile Migros shop into towns and urban quarters.
The Federal Council explained its attitude to the Council of States in 1937 as follows, “The economic crisis of hitherto unsuspected extent has shaken the basis of existence for large sections of the population and undermined the foundation of our economy so that a serious danger is threatening our country. In such times, extraordinary measures must be taken for the preservation of the state. Everything is focused on the capacity of acting rapidly and thoroughly without being obliged to comply with all the normal constitutional means.” (quoted in Kölz 2004, p. 827) This is blatantly obvious. In order to uphold the rule of law and protect the rights of the people, an emergency article with a clearly defined procedure would have had to be introduced in the Constitution.

Alarm among the population – many popular initiatives

When the Federal Council’s and Parliament’s practice of emergency legislation became increasingly blatant, the population was alerted. Numerous popular initiatives were submitted. The policy “bypassing the people” should be terminated and a stop should be put to the attempt to introduce representative democracy through the back door. The founders were assisted by a part of the constitutional law professors – especially by Zaccaria Giacometti from Zurich. The list of five popular initiatives that all pursued this goal, is so impressive that I would like to list them below. The many citizens who collected signatures did not want to abolish the emergency legislation but reform it so that the people’s law and the rule of law were observed.

  1. 1934: A civic committee submits the popular initiative “In order to safeguard the people’s right in tax matters” successfully. The Federal Council deferred it – in political jargon, this meant to put it on cold storage. (It was withdrawn in 1953 (!) because it was out of date.)
  2. 1936: A committee with the Migros founder Gottlieb Duttweiler launched the popular initiative to “Safeguard the constitutional rights of citizens”. The initiative was rejected by the people on 22 January 1939.
  3. 1936: The Communist Party of Switzerland collected signatures for the initiative “Urgent federal decrees and safeguarding the democratic rights of the people”. It was clearly rejected by the people on 20 February 1938 – especially because certain passages in the text sounded somewhat Marxist. Among others it spoke of the “werktätiges Volk” (working people).
  4. 1938: The “Landesring der Unabhängigen” (Ring of Independents) – also with Gottlieb Duttweiler – submitted the popular initiative “Emergency legislation and urgency”. The initiative was withdrawn many years later.
  5. 1938: Different groups of social democratic and trade union circles collected almost 300,000 signatures (six times as much as necessary) for the initiative “Restriction of the urgency clause’s usage”. They demanded a qualified majority in Parliament for urgent, generally binding federal decrees, i.e. two-thirds would have had to agree and such a decision was to remain in effect only for three years. This popular initiative prompted the Federal Council and Parliament to draft a counter-proposal and to meet the legitimate concerns of its founders at least a little. This counter-proposal significantly lowered the obstacles for an emergency legislation decree. The people voted on 22 January 1939 only on this counter-proposal and agreed. The popular initiative itself was not put to the vote on that day, which must perhaps not be held against the federal authorities in the uncertain times before the Second World War. The initiators withdrew their original initiative after the war.

Conclusion: Of the five popular initiatives aiming at reforming the emergency legislation, three did not come to vote because the Federal Council postponed them or because the Second World War broke out. The last was withdrawn in 1953. Two initiatives were rejected. Only a toothless counterproposal of Parliament was adopted. It turned out that it was not so easy to find a convincing legal basis for the emergency legislation.

Should judges decide the constitutional conflict?

Another popular initiative must not be omitted. A committee including a number of constitutional law professors – including Zaccaria Giacometti and Fritz Fleiner – proposed the establishment of a constitutional court to resolve this and other similar conflicts. A bench of judges should decide what was urgent and what not. This committee, too, collected signatures and submitted a popular initiative. It was voted upon on 22 January 1939. We do not want a state ruled by judges, was the tenor of the opponents’ statements. Especially in Hitler’s Germany one could observe how quickly judges aligned with the zeitgeist. It was the people that was the best guardian of the Constitution and the fundamental rights. This task belonged to the people’s right to self-determination and to their sovereignty. It should not be handed over to someone else. With a 71 per cent majority the voters said a clear No to a constitutional court. Also all cantons voted No.

Plenipotentiary regime during the Second World War

During the Second World War, the situation deteriorated. On 30 August 1939, Parliament unanimously adopted the so-called Plenipotentiary Decree (Federal decree on measures to protect the country and for the maintenance of neutrality), which provided mainly the Federal Council as executive with far-reaching powers so that it could take necessary measures in times of war and put them into effect immediately. Federal Council and Parliament adopted about 600 plenipotentiary resolutions at that time – exempted from the referendum. Especially Zaccaria Giacometti monitored this practice critically. Whilst during the First World War the people were still able to vote on the introduction of the so-called War Tax (income and property tax) and approved it by more than 90 per cent, Parliament introduced the “Wehr- und Warenumsatzsteuer Wust” (military tax and the commodity sales tax) (today’s direct federal tax and VAT) during the Second World War without asking the people. As an emergency measure, the people still had the Constitutional Initiative at their disposal. The Federal authorities, however, dared not to ignore popular initiatives despite the plenipotentiary regime, which is why even during the war signatures were collected and referendums were held. So in 1943, when one of the most brutal battles in world history was going on in Stalingrad, signatures for two popular initiatives on the “right to work” were collected in Switzerland. The soldiers in active service helped the two initiatives to come about and be voted on immediately after the war, with an impressive number of signatures.
Overall, the population largely accepted the limitation of the people’s law during the war as inevitable.

Return to direct democracy

The debate on the emergency legislation and the safeguarding of the people’s law was immediately revived after the war because the Federal Council and Parliament refused to refrain from emergency legislation, immediately. On 6 December 1945, the Federal Assembly passed a “Federal decree on the elimination of the extraordinary powers of the Federal Council”. In it, the Federal Council was authorized to adopt urgent measures only exceptionally if they “cannot be taken by way of ordinary legislation because of their urgency”. (Kölz 2004, p. 780) The term “exceptionally” aroused suspicion. Vaud Liberal Unionists and the Liberals (Ligue Vaudoise) launched the people’s initiative “Return to direct democracy” a few weeks later and submitted it on 23 July 1946. Its text reveals the handwriting of Professor Zaccaria Giacometti, who was a member of the initiative’s committee. The text of the popular initiative was adopted unchanged when in 1999 the Federal Constitution underwent a total revision. It reads:

Art. 165 Emergency legislation

  1. Federal acts whose coming into force cannot be delayed (emergency federal acts) may be declared urgent by an absolute majority of the members of each of the two Federal Constitution Councils and be brought into force immediately. Such acts must be of limited duration.
  2. If a referendum is requested on an emergency federal act, the act must be repealed one year after being passed by the Federal Assembly, if it has not in the meantime been approved by the People.
  3. An emergency federal act that does not have the Constitution as its basis must be repealed one year after being passed by the Federal Assembly, if it has not in the meantime been approved by the People and the Cantons. Any such act must be of limited duration.
  4. An emergency federal act that is not approved of in a popular vote must not be renewed.

The initiative met with no agreement in “Federal Berne”. The National Council significantly rejected it by 84 to 43 votes without drafting a counter-proposal. The Council of States rejected it even more clearly with 19 to 1 votes. All four government parties expressed their strong opposition to the initiative. The referendum was held on 11 September 1949, and a situation came about which is not at all exceptional in Switzerland. Although the entire “political class”, that is all major parties, the parliament and the government, spoke up against it, the people and the canton said Yes to the initiative, ending an at least 20-year-long wearing discussion on the protection of direct democracy in difficult times. This popular initiative enshrined the emergency legislation in the Constitution, which is still unchanged. It is a milestone, and even more so a lighthouse in the history of direct democracy.

Zaccaria Giacometti – Appreciation of a great personality

The role of Zaccaria Giacometti (1893–1970) has to be highlighted and appreciated. The Zurich constitutional law professor who comes from the famous Bergell family of artists, had significantly influenced the discussion since the 1920s. Giacometti saw himself as a guardian of freedom and democracy and repeatedly committed himself to the Swiss national character in his works. The argument of the Federal Council (according to which the circumstances justify emergency legislation) was contrary to the constitutional principles of Switzerland. He spoke of the corrosion of Switzerland’s federalist and democratic-liberal system of government.
Over twenty years, Giacometti always supported direct democracy courageously, loudly and clearly and called for a constitutional article about emergency legislation that did not undermine the rights of the people but involved them. If higher reasons of state required emergency legislation, the procedure would have to be regulated. He spoke vehemently of a “chaotic, unprincipled practice” that would lead to a “parliamentary absolutism”, even to a “parliamentary dictatorship”. Again and again he warned against the “abuse” of emergency legislation. For Giacometti the reason was that the federal authorities ultimately distrusted the people and did not want their laws to be jeopardized by a referendum. The authorities ultimately distrusted the people. The referendum – Giacometti said – had always fully proven successful in the state’s practice. It did not prevent the necessary adjustment to necessities. The referendum had also proven “the cantons’ protection against a strong centralization” and “a cement to cohere national unity”. It was “doubtful whether the urgency practice would be able to pass before the forum of history”. Switzerland would lose its inner sense with the abandonment of the “co-operative, individual and political freedom. That would, however, mean for the Confederation that its reason for existing would fall apart and it would therefore be hardly viable in the long run.”
Such strong language at a time when democracy was little appreciated should give reason to pause for thought today. Giacometti was appointed Rector of the University of Zurich in the 1950s.
(Read more in Giacometti Zaccaria, “Staatsrecht der Kantone”, Zurich 1940, pp. 552, 769, 776; Alfred Kölz, “Neuere Schweizerische Verfassungsgeschichte”, pp. 768; Andreas Kley, “Von Stampa nach Zürich – Der Staatsrechtler Zaccaria Giacometti, sein Leben und Werk und seine Bergeller Künstlerfamilie.”)

Living democratic culture

One thing needs to be added here: Giacometti could express his massive criticism of the policies of the Federal Council and Parliament without being reglemented. The freedom of expression and press freedom were not affected by the emergency legislation, which was not at all self-evident in these times. During the Second World War there were indeed attempts to restrict the freedom of the press, so as not to provoke those in power in Berlin, as the Federal Council explained. In general, however, the freedom of expression and press freedom were maintained even in those years.
The constitutionally supported regulation of the emergency legislation – as a result of the 1949 popular initiative – was a major step in the history of direct democracy. This great achievement would not have been possible if the citizens had not repeatedly expressed how important popular law was for them. The number of signatures, with which the most popular initiatives were filed in the 1930s, may serve as a proof. They were often a multiple of the number required by the Constitution. When it was about the preservation of direct democracy, the entire population collected signatures – even with communists under Moscow’s spell and with Frontists aligned to Germany. Even a lost vote was quickly forgotten and made interested citizens soon think about the next project with which they wanted to make a difference in the world. – This common concern proved to be the pin that held the population together and let them go in the same direction. “Collecting signatures” moves the people emotionally. They are active, talk to their fellow citizens and try to convince them. Politics thus becomes a living thing, with the people being directly involved and sharing responsibility. The leader-ideology of Hitler, which transferred one hundred per cent of the responsibility to a parent person or entity and obliged the individual citizen to absolute allegiance, had therefore never had a chance in Switzerland.
Anyone who follows the debate on direct democracy in the 1930s will inevitably think of today’s current debate. While the authorities then repeatedly referred to the difficult circumstances of the time to make decisions without the people or bypassing the people, there are arguments like “human rights”, “international law”, agreements with the EU among others that serve as a justification, today. Yet today it still takes many citizens who work with passion for direct democracy, as Zaccaria Giacometti then did in an outstanding manner, for decades.

Test for the new process during the economic boom

The new regulations for emergency legislation were soon to be tested in practice and Zaccaria Giacometti could experience how Federal Council and Parliament treated numerous submissions under emergency legislation by the new process. Many expected an economic development in 1949 similar to the one after the First World War – with inflation and a hesitant recovery. It turned out quite differently. An unprecedented economic boom occurred and the authorities were soon busy with the excesses of a booming economy. In the 1960s, temporarily less than a hundred people were registered as unemployed in the country. Those who lost their jobs usually found a new one within hours and were able to choose among ten offers. Working overtime became a steady condtion with negative impact on family life. Economists spoke of a “Konjunkturüberhitzung” and over-employment. Hundreds of thousands of foreign workers were contracted to keep the economic engine running – at first from Austria, then from Italy and later from other southern countries. The housing problem assumed dramatic proportions temporarily. The entire infrastructure such as roads, sewers, schools, public transport and more could no longer meet the increased social demands and the necessities of a fast-growing economy by far. New schools and water treatment plants had to be built, public transport modernized, motorways built and much more. The authorities were greatly challenged. The water pollution, for example, had become so bad that people could no longer swim in the lakes of Zurich or Lugano. Due to the increasing demand at home and abroad prices rose massively, as well so that inflation assumed threatening proportions and increased by 12 per cent annually in the late 1960s. Flight capital and speculative funds from abroad exacerbated the situation.
Much like in the thirties the authorities resorted to emergency legislation. Only this time it was different: There were ten referenda. This time it was not about fighting unemployment but about slowing down the hot current “economic engine” and subduing the economy. Federal Council and Parliament enacted ten urgent federal resolutions, most of which were not covered by the Constitution, and each time there was a referendum.

  • On 13.3.1964, the Federal Assembly adopted two urgent federal decrees on fighting inflation by measures in the fields of money and capital markets and the banking system as well as in the field of the construction market. The two decrees were limited to two years and were approved by the people and cantons on 28.2.1965.
  • In 1964, the people voted on a constitutional amendment which allowed the temporary continuation of price controls.
  • In 1971, the Federal Assembly adopted two urgent federal resolutions – one to stabilize the construction market and the other to protect the currency (which enabled the introduction of massive negative interest rates on foreign speculative funds). Both were limited to three years and were approved by the people and cantons on 4.6.1972.
  • On 20.12.1972, the Federal Assembly adopted four urgent federal resolutions (which were not covered by the Constitution) on monetary policy, on the monitoring of prices, wages and profits and the price monitoring. These four decrees were limited to three years and were also approved by people and the cantons on 2.12.1973.
  • On 19.12.1975, Parliament adopted two urgent federal decrees (which were not covered by the Constitution) again on monetary policy and price monitoring. They were approved by the people and cantons on 5.12.1976.

Golden Years – a satisfied Swiss people

Democracy worked excellently. There was no one who complained. The people were called to the ballot boxes ten times, and rendered their approval to the measures of the Federal Council and Parliament each time. Although the voter turnout declined in individual votes to less than 30 per cent – far from the 85 per cent vote on the crisis initiative in 1935. Most of the Swiss men and women and also the immigrants had a good life. Wages were fine. However, the constant overtime was a burden to family life. Amenities in the home such as refrigerators, washing machines, for many the first car, the TV, bigger apartments and many more made life easier. More holidays and the transition to the five-day week changed life to what it is today. We, the post-war generation, knew the phenomenon of unemployment only from our parents’ and grandparents’ stories. We had the privilege of growing up in a altogether different world.
As a part of this series of articles we say goodbye again to the golden years of the post-war period and go back to the year 1937, when the peace agreement between the unions and the employers‘ associations of the metal industry was signed. This agreement and numerous referenda in connection with the economic crisis helped to consolidate social peace – until today. Read more about that in the next article.     •
(Quotations translated by Current Concerns)

“Human Rights, these are freedom rights, they are supposed to protect the freedom and dignity of man against the state’s power, to enable the free development of the personality, and thus form a protection barrier against the omnipotent state. Yes, Switzerland represents a unique case of democracy, where the people itself as the legislator is the guard of human rights and thereby she delivers the living proof of the possible existence of a genuinely free anddemocratic state.”

Exerpt from the commemorative speech “Die Demokratie als Hüterin der Menschenrechte (Democracy as the guard  of human rights)”
by rector  Zaccaria Giacometti at the  121st endowment celebration of the University of Zurich in 1954
(Translation Current Concerns)

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