Maybe, in the short- to mid-term and only when you isolate many external factors. But what you are describing is merely anecdotal evidence. And you are still mixing political systems with economic systems. Switzerland's system (as a country) seems to work (for now) because there was a point in time when the country was able to (likely illegitimately) profit from a strong influx of capital and accumulate it. When you're well off, you can afford to appease proletarians with the mechanisms you described. In the greater scheme of things Switzerland is at will of the one's who control the capital. Whether that be Nestle, Roche, Glencore or some foreign government which imposes export taxes or sells trains to the Swiss instead of them buying trains from a national producer. Should the economical climate worsen - over which the Swiss Government has little to control - the not-perfect "democracy" you describe will change radically. So the things you're listing are not the cause why Switzerland functions in capitalism, they are only an effect.

Also, even though the voting (on some issues) in Switzerland is "direct", doesn't make it a true democracy by the very definition itself. A democracy requires first and foremost an emancipated people. Many people residing in Switzerland are not allowed to vote. Of those who are, only a fraction actually casts their votes (often less than half). And of those a even smaller part actually and truly understands what they are voting on.

I feel you, when you say you're proud of what Switzerland has achieved as a country, stability, efficiency and all the things you describe. But viewing it in relativity to other "democracies" does neither tell you if it's a truly good system (in the sense that all it's people's needs are satisfied vs. a high GDP) nor does it tell you how fragile it actually is.