Andrew Oswald: What we can learn from the Swiss

I did not expect to be living in Switzerland in the month the world's financial system splintered. This episode has reinforced in my mind the need for disinterested intellectual leaders who can offer reliable advice in a crisis. These rare people are all trained in universities, and many work in universities. Whatever one's view of the causes of the crash – and academic economists have to take a share of the blame – it has shown that society needs astute thinkers to help get us out of the mess.

Few Britons or Americans realise that Switzerland has more resident Nobel Prize-winners per head of population than any country. It has three universities among the world's top 100, according to the World Academic Ranking of Universities, produced by Jiao Tong University. Yet Switzerland has a population about one-fiftieth the size of that of the United States – and its universities are home to some of Europe's best economists.

What is Switzerland's secret? First, the country runs on high degrees of trust and common sense. I see this every morning at my tram stop. The Zurich trams run every six minutes and on time; their numbers are colour-coded; the signs clearly show where the trams are going; there appear to be no ticket inspectors, yet everyone buys a ticket. Because the trams are clean, reliable and quiet, it is pointless to drive. So the air is clean. Perhaps that is why almost everyone looks healthy.

Crucially, the educated middle classes here happily travel on the trams, and a virtuous equilibrium is the result. This prevents the erosion of quality and behaviour that happens routinely in nations where middle-class people disdain public transport.

Second, Switzerland's universities have a sensible autonomy that a British university would envy. Universities here have freedom and, being run by fine scholars, use it shrewdly.

Third, Swiss universities are the product of an unusually democratic structure and this leads to consistent funding from taxpayers. There is agreement about what counts as a desirable outcome. Professor Uschi Backes-Gellner of the University of Zurich has argued persuasively that Switzerland's universities are successful because they are pragmatic and have good quality-control. They are plainly committed to excellence. I have attended seminars of fantastic quality. The nation has accepted that it wants world-class universities and will pay what that takes. Faced by the size of countries like the Usa, or even the UK, this takes courage and thinking through; Switzerland has that and has done that.

Fourth, even though, in human relations, trust valuably begets trust, it's necessary to have checks. Swiss higher education is carefully evaluated. There is formal comparison against international standards. Quality audits occur every six years. But, importantly, there is nothing as overpoweringly bureaucratic as the UK's Research Assessment Exercise, which exemplifies the low-trust model. In Switzerland, an independent unit is responsible for much of the evaluation. It uses judgement, bibliometric measures from the Web of Science, and much else. Almost everyone I speak to thinks this natural and that assessments are done in an even-handed, professional way – and, unlike in Britain, quietly. Switzerland runs on compelling logic, not compulsion.

Fifth, the salaries are good. But they are also remarkably flat at the top end. As far as I can tell, a Nobel Prize-winner does not earn much more than a regular professor. Whether that can be maintained remains to be seen. A key element is that both young and older scholars are paid well. Postdoctoral researchers can make £40,000 a year in their twenties. This is obvious good sense.

Switzerland offers a glimpse of the way a civilised nation, and university system, can be organised. Small countries need to make it with their heads. This one does. The UK is not the only country that could learn from it.

The writer is professor of economics at the University of Warwick, and visiting professor at the Socioeconomic Institute, University of Zurich

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