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“The power of judgement, which is called ‘reason’ or ‘good sense’, is the most equally distributed in all of us from birth. Most of us think we are so full of this power that we do not require a larger measure of it than we already have.

What sets us apart from each other, however, is in the way we utilize the reason and the sense that we possess.”

– René Descartes (1596-1650), mathematical genius and philosopher, in his “Discourse on Method of Rightly Conducting Reason and Seeking Truth in the Sciences”

I always thought that the Swiss are really smart folks, possessed in abundance with René Descartes’s ‘good sense’ and ‘reason’.

Stealing millions in cash, gold and art that had been confiscated from Jews by the Nazis and left in Swiss bank vaults guised as safe havens at the end of the Second World War, now that took real smarts. Pioneering the concept of a no-questions-asked repository for ill-gotten gains from around the world salted away in anonymous numbered accounts, man, that was brilliant.

In the early 1930s when Nazism reared its head, many Jews in Central and East Europe sought to protect their assets by depositing money in Swiss accounts, and their valuables in Swiss safe deposit boxes. To encourage such transfers, in 1934 the Swiss even strengthened special banking secrecy laws which facilitated preservation of depositor anonymity.

For a while, the Swiss National Bank looked to Europe’s Jews the way the tablet on the Statue of Liberty looked to “the wretched masses”.

To the delight of the Swiss, most of the Jews who transferred their assets, did not survive the Holocaust. The Swiss were very happy to accept Jewish capital but not as happy to accept Jewish refugees, some of whom were often their own depositors. Jewish refugees attempting to flee Germany and occupied parts of Europe were blocked from entry.

In 1938, the Swiss requested that Berlin mark the passports of Jews with a “J”, so that German Jews could be instantly distinguished from German gentiles – and be denied admission to Switzerland. Indeed, the great majority of those denied sanctuary in Switzerland perished in the German death camps.

As the war raged, Switzerland turned into a repository for Jewish assets smuggled out of Nazi Germany and its satellite states. Vast quantities of gold and other valuables plundered from Jews and others all over Europe landed up inside Swiss banks. Right up until the end of the war, Switzerland laundered those assets feverishly. Gold bars with the swastika on them were melted down and re-embossed and went into anonymity around the central banks of Europe, each of whom knew full well where the gold was really from.

It is estimated that the loot was worth more than 500 billion in today’s US dollars.

The Swiss skulduggery didn’t go unnoticed. The US President Roosevelt declared Switzerland a war profiteer and by 1944, when it became clear who in the end the losing side would be, the Allies threatened to freeze all Swiss assets in Britain, France and the US and announced a blanket boycott of all Swiss industries that had done business with Germany, unless the Swiss froze all Nazi assets in Swiss banks.

Then came VE Day and all over Europe, the guns fell silent. Deafeated, Nazi Germany was no longer able to claim the loot it’s elite had stashed in Switzerland.

To the Allies, the Nazi riches in Swiss banks were their’s to disburse, not just from a legal but a higher, moral, standpoint. They decided that after repatriation of specific assets such as jewelry, pieces of art and property to their rightful owners, the sizeable balance in hard currency and raw precious metals such as unidentifiable gold and silver bars would be compensation to the winning side for their economic losses and reconstruction costs.

Smooth move. The age old dictum – To the victor goes the spoils.

Now for the real genius of the Swiss……

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At the war’s end Switzerland successfully fought Allied calls for the repatriation of plundered assets to their rightful owners and that’s where Swiss bureaucracy stepped in, pointing to Swiss law and demanding proof of ownership, death certificates and proof of identity as the legal heirs. Thanks to the wipe-out by the Nazis, almost all proof of legal right to the assets had been destroyed, either deliberately or in the bombings.

In 1946, the Allies signed a document called the “Washington Agreement of 1946” which was seen as a capitulation to Swiss’s position. The Allies contented themselves with acceptance of a mere 12% of the stolen gold. Holocaust survivors and the heirs of those who perished met an implacable wall of bureaucracy. A handful managed to reclaim just a fraction of their assets.

At the time the Washington Agreement was signed, there were numerous rumours that the lead negotiators on the Allied side (and their leaders and their political parties) were personally rewarded by the Swiss with bulging numbered accounts of their own. Political donations skyrocketed.

Further doubling down on the steal, the Swiss utilized the funds in some of the dormant accounts to satisfy claims of Swiss nationals whose properties had been seized by Communist regimes in East Central Europe.

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What takes the Swiss into the realm of pure genius beyond anything that even Descartes could have imagined is the way they project themselves as a pink-cheeked, cute and cuddly nation with it’s picture-perfect hills that serve as settings for Bollywood song and dance sequences, it’s chalets, it’s cheeses, it’s pastries, it’s chocolates, it’s fine watches and all those other things in the world that we associate with innocence. Man, that requires real brains.

Ask anyone in the west and he will be aghast at the idea that Switzerland can be branded a rogue criminal state, intent upon stealing, defrauding hapless individuals. To him, Switzerland is nothing but a bunch of poor misunderstood white guys in wealth management, who are just being resourceful.

Everyone loves the Swiss and what is more important is that the Swiss believe that everyone loves the Swiss. Switzerland conjures up an image of purity, a 99.99%-oxygen air, plump goats sampling organic grass on green rolling meadows, stretching as far as the eyes can see.

And of course, unadulterated, organic hospitality. If you are rich, Switzerland is a joint where you can get away from your conflicts and just relax, like you would in an exclusive spa, The snowy peaks that surround you will make you feel like you’re in a Catholic confessional. You can scream out your sins to them and the breeze will exorcise you, wiping you clean. After two weeks, you are good as new, back in Manhattan, paying a lobbyist to pay a congressman to skirt the law.

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Let’s go back a bit……

After the First World War, the victors (the French and its allies) decided to build an international organisation that would ensure that another world war didn’t happen. This was where the Swiss displayed their smarts. Already known for their tranquility, they volunteered to be the base for the proposed entity. Geneva, their second largest city, was chosen as the Headquarters of the organisation that was named the “League of Nations”.

Besides boosting tourism (just like the UN does in New York City) the ‘League of Nations’ did jack shit, bupkis, zilch, you get it, nothing. Just like the UN. It certainly didn’t prevent world wars. To Switzerland however, the presence of the global HQ of the League of Nations made it the world’s go-to place for settling disputes. It gave the Swiss prestige.

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Switzerland displayed its smarts in other ways too, such as the deft handling of its more powerful neighbour, Germany, starting well before and right through the Second World War. Correctly foreseeing the upsides of neutrality, it declared itself a neutral country, ensuring it would remain a haven of tranquility, a sovereign state at a time when Germany was gobbling up it’s neighbors. A neutral country pledges to remain neutral in all conflicts and to not join military alliances like NATO, CSTO, etc. In return it is guaranteed non-aggression by all sides.

Just as passive income investors invest in dividend stocks, the Swiss have invested in neutrality and it is a very smart investment indeed. Your stock portfolio might halve in value in a market crash but Switzerland’s investment always wins. During conflict, warring sides threatened by invasion need a haven for their liquid assets and for the safe-keeping of those assets, they are willing to part with a percentage of their net value. That has been the ROI of the Swiss.

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During the initial years of the Second World War, the Swiss allowed bomber overflights from both sides but after 1942, when the Nazis sensed the tide beginning to turn against them, they threatened Switzerland with annexation unless it made overflying allied bombers either land or turn back.

Scared shitless, the Swiss acceded to Hitler’s demands but here’s where their deftness in playing both sides showed. To calm hurt feelings among the Allies, allied airmen who landed or bailed out over Swiss territory were returned unharmed. Likewise, escaped Allied POWs who made it to Switzerland were given medical attention and repatriated unharmed.

WW2 ended in 1945 and while the rest of Europe looked like a post-apocalyptic hellscape, one country remained standing, unscathed. You guessed it – it was Switzerland. Except for damage from a few accidental bombings from both sides, Switzerland remained materially untouched, while economically, it resembled Yukon during the gold rush.

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Other European nations too designated themselves as neutral in the 2nd World War but they ended up either taking sides and/or letting the Nazis use their territory for logistics/troop transit or having the output from their mines diverted for the Nazi war effort, in exchange for the assurance that they wouldn’t be invaded.

Switzerland not only avoided annihilation, but it actually prospered, its banks filled fit to bursting with gold bars, recast with the swastika stamped on them, jewelry, hard currency, priceless art, even gold tooth fillings extracted from incarcerated Jews. If there were descendants, freshly liberated from concentration camps, they were barely alive. Psychologically broken, they had neither the paperwork to prove they could claim those assets, nor the will to go looking for them.

In the closing weeks of the war, even corrupt Nazi big shots began transferring truckloads of snatched valuables in their personal possession to Swiss banks, from which those banks are reported to have earned a cut of up to 50% of their value.

Today Switzerland is the fourth richest country in the world, with a per capita personal annual wage income of $73000(USD) and the third in terms of per capita GDP ($103,000(USD).

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Another facet of Switzerland’s genius is it’s pragmatism.

In spite of its neutrality and in spite of a population of only 8.9 millions to protect, Switzerland has built itself a strong modern military, its army equipped with the latest hardware money can buy. Battalions of armoured corps with Leopold Pz-7 Main Battle Tanks, squadrons of F18 Hornets, you name it they have it. With a penchant for producing intricately crafted machinery, the Swiss excel in small arms. Manufacturers such as SIG and Oerlikon are household names, their annual arms exports to military and law enforcement agencies all over the world topping $2 billion.

The martial ethos is drilled into Swiss males at an early age. Military service is mandatory for all male Swiss citizens from 16, up to the age of 34. All of the population within this demographic undergo an 18-week basic training and two-thirds end up as conscripts.

Here too the Swiss have displayed immoral genius – exporting arms to all sides in a conflict. It is an open secret that Swiss-made small arms and infantry rifles have been supplied through middlemen to all sides in Syria, Yemen and Libya in the aftermath of the Arab spring.

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What can one call a country so seeped in criminality? The French essayist, Charles Baudelaire(1821-1867), once said, “The greatest trick the Satan ever pulled was convincing the world that he didn’t exist”.

Let me tweak Baudelaire’s quote to read…

“The greatest trick the Satan ever pulled was convincing the world that his representatives are unrecognizable as what they really are.”