Switzerland was in no position to take sides even if they wanted to. Bad example. What if England chose to remain neutral in WWII?
To answer your scholastic question about the needs of human nature I'll refer to Maslow since he is the simplest to argue. As long as physiological, safety, interpersonal, and esteem needs are met, people will thrive. It should be our goal to create a community that fosters these to the best of our ability. The rewards for doing so will be ever improving technology.
Switzerland's a perfect example of exactly how a libertarian nation or AnCap region would handle being surrounded by warring nations. "Well, I suppose my people would have to shoot twice."
OK, now, how does libertarianism fail to meet those needs?