Volume 7 I've Been Here Chapter 1024: The Past and Present of IMF
In the colonial era, the great powers fought blatantly, and finance was a supporter of war and piracy, as well as a sharer of the profits from plunder.
In the era of industrial capitalism, in pursuit of excess profits brought by trade, currency and finance are tools for exporting commodities. The competition for monetary and financial status among the great powers is also for the purpose of gaining commodity profits.
In the era of financial capitalism, the pursuit of trade benefits has transformed into the pursuit of excess seigniorage benefits. Powerful currencies use their absolute advantage to not only profit from occupying other countries' resources, goods, and labor, but also from influencing the rise and fall of global financial prices, and even from the process of easily destroying a country's economy.
When it comes to plundering wealth, people easily think of pirates, including gentleman pirates and royal pirates.
Europeans usually refer to pirates supported by a country's government or royal family as royal pirates or gentleman pirates. During the Age of Exploration, based on the discovery of the New World and the expansion of colonies, various ships loaded with gold and cargo were sailing on the oceans of the world, so sea robbery became a profession.
This was originally a criminal act by civilian bandit gangs, but the old European empires deliberately nurtured pirates and even legalized it in order to strengthen navigation technology and expand colonies.
The most typical case is the British Royal Pirates, and the most famous person is probably the British navigator Francis Drake. In April 1581, Queen Elizabeth I of England personally boarded Drake's ship and bestowed him with the title of Royal Knight for his two circumnavigations of the earth in 1577 and 1580.
However, this hero in the minds of the British and the Hawkins Fleet he led were actually a pirate gang chartered by the British Royal Family. He turned every £1 investment of the British Royal Family into a profit of £47.
In 16th century Europe, Spain was the pillar of Catholicism and the world hegemon, while Britain was insignificant. However, during this period, religious revolutions were surging, reversing the political landscape of the entire Europe. Henry VIII of England founded the Church of England and broke away from the Roman Catholic Church, making Britain one of the earliest Protestant countries.
After Queen Elizabeth I of England came to power, she consolidated the status of Protestantism internally and supported the independence of Protestant countries such as the Netherlands externally, trying to turn Britain into a Protestant empire. As a result, the conflict between Britain and Spain became increasingly fierce.
Economically, Spain and Portugal made huge profits from colonization, which made Britain jealous. But as early as 1496, King Henry VII of England also hired the Venetian navigator Cabot to search for the New World. His footprints covered Newfoundland, Hudson Bay and Virginia in North America, and Guyana in South America, but he did not find any gold or silver treasures, and he lost all his money again and again.
How could they be willing to see such a huge investment go to waste? Since they couldn't find it themselves, they might as well rob the merchant ships that were returning with full loads.
From 1585 to 1604, Britain established armed merchant ships, which sailed nearly 200 times a year, specializing in plundering Spanish transport fleets in the Atlantic and Caribbean Seas, and captured an average of about 200,000 pounds of property each year. This was a considerable income at the time, and in order to expand the results of the war, Elizabeth I had the idea of piracy and issued privateering licenses to the fleets led by Hawkins and Drake, who hated Spain, authorizing the fleet to legally rob merchant ships of other countries.
Thanks to the funding from the British royal family, Drake began to sail armed merchant ships in the Caribbean Sea in 1572 and became the "Black Pearl" that the Spaniards feared at the time. He also became a household legend in Britain and plundered countless wealth for Britain.
In 1577, Drake received intelligence that a Spanish transport ship, the Cacafugo, loaded with gold and silver treasures, was sailing from Peru to Panama City. So Drake set up an ambush off the coast of Panama and captured the Cacafugo on March 3, 1579, robbing 80 pounds of gold, 20 tons of silver, 13 boxes of silver coins, and many pearls and gems at one time.
In addition, Drake used the nautical charts obtained from the robbery of the Caccafeo to sail westward across the Pacific and Indian Oceans, and returned to Britain more than a year later, becoming the first British person to sail around the world.
On September 26, 1580, Drake's fleet, loaded with treasures, sailed into Plymouth Harbor and was warmly welcomed. Queen Elizabeth I of England boarded the Golden Hind, the flagship of Hawkins' fleet, to honor Drake and appointed him mayor of Plymouth.
Drake Mingli displayed pirate behavior of killing and looting, but behind it was hidden elementary financial behavior.
During the Age of Discovery, whether it was ocean trade or piracy relying on force, there had to be strong capital support behind it. And behind the pirate ships (armed merchant ships) there was the shadow of shareholding financing and the shadow of venture capital.
Drake can be regarded as an entrepreneur. In the early days of his business, he only had an armed merchant ship. After a sea robbery, someone found him and wanted to invest in him. Drake's single sail then turned into a pair of ships.
After two or three perfect "businesses", Drake welcomed more investors to invest in rounds A and B, and he was able to establish the Drake Fleet. As the Drake Fleet's "business" grew bigger and bigger, the harvest from each return voyage also increased.
However, a voyage takes two to three years, and the risks of sea voyages at that time are enormous, and it is common for merchant ships to be sunk at sea. This means that huge profits are accompanied by huge risks. For this reason, some people, after tasting the sweetness once or twice, stop while they are ahead and sell their "shares" to others, that is, cash out the shares. The person who takes over the shares may make a fortune, or may lose everything.
The Age of Exploration was also accompanied and connected to the colonial period. In order to colonize a piece of land, the colonists would use financial weapons in addition to swords, guns, sticks and clubs.
In 1840, before the outbreak of the First Opium War, there were two currencies circulating in the Qing Dynasty's commodity market. Large transactions and official transactions used silver in units of liang, while ordinary people and small businesses used copper coins for settlement of daily transactions.
At the same time, there was a fixed ratio between silver and copper coins. However, due to various economic and monetary reasons, and because officials at all levels took advantage of the devaluation of copper coins against fine silver to profit, financial contradictions became very prominent and the problem of high silver prices and low copper coins existed for a long time.
On the one hand, the vast majority of ordinary people could hardly afford to exchange silver and could not rely on silver to preserve their wealth; on the other hand, the Qing Dynasty was a silver-poor country in its early years, and silver production relied on silver mines in Yunnan Province, Myanmar and Annan, but these places could not provide a stable source of silver, which made the source of official silver heavily dependent on the market, and had to rely on official copper coins to be exchanged in the market.
Under such circumstances, the market credit of copper coins was greatly reduced, which left opportunities for foreign commercial and financial forces to take advantage of.
During the reign of Emperor Kangxi, the Qing Dynasty had become the main supply base for tea, silk, and porcelain for European countries such as Britain, the Netherlands, and Denmark, and foreign companies such as the British East India Company purchased large quantities of goods in China.
The problem is that Europe and North America have a huge demand for Manchu goods, but the Manchus have little demand for imported cotton cloth, woolen textiles, metal products, spices, pepper, sandalwood, etc. For example, in the 13 years from the 46th to the 58th year of Qianlong's reign, the total value of British goods exported to China was only 16.87 million taels, which was only one-sixth of the value of Manchu tea exported to Britain.
Faced with such a huge trade deficit, Britain adopted two strategies. The first was to impose high tariffs on imported tea, and the second was to develop addictive special opium and carry out organized and large-scale smuggling of special opium to the Qing Dynasty.
This move reversed the trade pattern in a very short period of time. The opium trade led to a large outflow of silver. At this time, the American independence movement led to weak demand for tea and raw silk in the international market. The Qing Dynasty's silver supply chain was almost interrupted, making silver more expensive and money cheaper.
At this time, a unique currency phenomenon emerged. During the five years from 1833 to 1838, Lin Zexu, the national hero who destroyed opium at Humen, conducted a follow-up investigation and found that foreign money had flooded many coastal areas such as Guangdong Province, Hu Jian and Zhejiang Province.
In Jiangsu and Zhejiang, there were many merchants who specialized in using foreign silver to purchase national silver, and foreigners deliberately suppressed the exchange rate between national silver and foreign silver. According to the calculations of Jiangsu and Zhejiang at that time, for every one million taels of foreign trade transaction volume in Zhejiang Province, the Qing government had to pay an additional 100,000 taels of national silver due to exchange rate issues, and the country's foreign trade lost more than one million taels of silver due to exchange rate issues.
According to the Complete Works of Lin Zexu, foreigners "did not buy goods, but only bought silver, which was consumed secretly, causing the amount of silver in the mainland to decrease day by day, and the amount of foreign currency to increase day by day."
Foreigners minted a large number of silver coins without the control of the Qing court, and used them to arbitrage a large amount of national silver exchange differences. At that time, the serious outflow of wealth in the Qing Dynasty had led to financial and economic crises, which was also an important economic background for Emperor Daoguang to make up his mind to send Lin Zexu to ban opium.
Later, Lin Zexu destroyed opium in Humen. British capital saw that financial means through exchange rate differences were no longer profitable, so they put aside their "civil" efforts and took up "military" struggle.
What's funny is that Britain's war expenditures throughout the Opium War were obtained through exchange rate differences, which means that the Qing government was indirectly responsible for the logistics of both sides.
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During World War I, the United States declared war on Germany in 1917, but in fact the United States had already been involved in World War I in 1915.
On August 4, 1914, the day when World War I broke out, US President Wilson immediately declared that the United States would maintain a neutral position. On August 19, he called on the United States to be impartial in thought and action.
In January 1915, in order to avoid conflict with the neutral position of the United States, Britain sent a heavyweight businessman to New York and appointed him as the British commercial representative to the United States. This person was J.P. Morgan, a well-known financier and head of the Morgan Consortium, who had close ties with both British and American leaders.
J.P. Morgan was in New York at the time, so it is not appropriate to say "came", but there was another person who was responsible for the connection and did come to New York from London. His name was Rothschild.
In the United States, J.P. Morgan helped Britain raise war funds through large-scale debt, and used the raised funds to purchase large quantities of military supplies in the United States on behalf of the Allies. This business model made American financiers and industrialists earn a lot of money.
On August 12, 1915, U.S. Treasury Secretary McAdoo wrote in a letter to President Wilson that the sale of industrial products to the Allies had ushered in an era of great prosperity for the United States, but in order to make the prosperity last, the United States must openly provide loans to the Allies.
On December 8, Wilson formally approved the federal loan, and over the next year or so, the United States provided the Allies with tens of billions of dollars in monetary loans and materials.
In January 1917, German submarines once again massively blocked the sea transport lines between Britain and the United States, and claimed victory in the war within six months. If this war lifeline was cut off and Germany won the war, the United States' tens of billions of debts to the Allies would be wiped out.
In desperation, on April 6, 1917, the United States was forced to formally declare war on Germany. Yes, it was forced. The United States did not want to fight personally, but hid behind the scenes and watched coldly, selling goods and lending money, feeling very happy. Unexpectedly, Germany not only made harsh remarks, but also wanted to destroy its "good brother". How could the United States not be furious?
No problem, just chop it to death.
During the five years of World War I, the total industrial output value of the United States increased from less than 25 billion US dollars to 64 billion US dollars, an increase of 156.7%; the number of American millionaires increased by 17,000. Mellon, then US Treasury Secretary, admitted that the profit rate of the United States from the war trade was as high as 80%.
In addition, when Europe was unable to take care of the Latin American and Far Eastern markets, the United States' trade with Latin America expanded from less than 80 million US dollars to 3.4 billion US dollars; the United States has basically controlled Mexico's oil and rubber, Bolivia's tin mines, Chile's saltpeter and Brazil's coffee; and the output of American private capital to the Far Eastern market increased from 3.5 billion US dollars to 7 billion US dollars.
More importantly, gold flowed from Europe to the United States. In 1919, the United States' gold reserves were equivalent to 40% of the total gold reserves of all countries in the world. With the proceeds from the war, the United States redeemed more than $2 billion of U.S. debt from overseas investors, turning itself from a debtor country into a creditor country in one fell swoop.
As the US Ambassador to Britain Page predicted in a letter to US Presidential Advisor House on October 11, 1914: "After the war, almost all European countries will be on the verge of bankruptcy, and there will no longer be Germany on the sea. Ten years later, the future of the entire world will be in our hands. This is a very rare opportunity."
It can be said that the reason why the United States was involved in World War I was entirely because it was led by capital, or in other words, faced with the increasingly corrupt "British companies" that were suspected of being in trouble and collapsing, "American banks" had to send "business elites" to help them turn losses into profits in order to consider the loans they had lent.
With the help of American banks, British and French companies joined forces to seize the market of German companies. However, in the process of the struggle, the two companies also suffered heavy losses and their working capital was in danger of being cut off at any time. Therefore, the three parties joined forces to force German companies to "Versailles".
French and German companies have a lot of overlap in the market. Taking advantage of the big victory, French companies want to completely kill German companies and become the dominant force in the European market.
The British company does not think so. Its main competitor is the French company. If it were not for the German company clamoring to swallow up the markets of both of them, the British company would like to see the other two companies fight each other. Therefore, it does not want to see the German company fall into decline. It would be better if it could remain half-dead and always hold the French company back.
Moreover, the British company also wanted the German company to be "Versailles" and it also expected the German company to help it repay the loan from the American bank.
The German company suffered a major defeat. Not only had its working capital been exhausted, but it was also burdened with the huge "Versailles". The pressure was too damn great. This company was so boring that it might as well just give up on running it.
The French company agreed to the German company's idea, but the British company did not. Neither did the American bank. As the German company started to run low, the loan might become non-performing. After much deliberation, the American bank concocted the Dawes package repayment plan.
Simply put, the so-called Dawes Plan was that international financial institutions led by Britain and the United States provided loans to German companies to help them recover their economies and enable them to pay war reparations; German companies would pay war reparations over five years, with the final deadline being September 1, 1929.
In order to ensure the smooth implementation of the Dawes Plan, the British and American Bank established an office in Berlin and appointed Parker Gilbert, a partner of the Morgan Consortium, as the general agent for reparations, who was responsible for handling all financial affairs related to the reparations.
So, British and American banks lent money to German companies, and Gilbert would immediately turn the money into war reparations and return it to British and French companies; British and French companies would then use part of the money to repay debts to American banks and the other part to import American goods.
At the same time, in order to maintain the smooth implementation of the Dawes Plan, the Federal Reserve kept the U.S. market interest rate very low, which greatly increased the attractiveness of high-interest German corporate bonds, thereby ensuring that U.S. private loans continued to flow to German companies.
On the surface, the Dawes Plan restored the economies of Britain and France, enabled the American manufacturing industry to obtain orders from Europe, and created financial prosperity. However, this was due to the continuous increase in the scale of German debt, which inevitably sowed the seeds for future crises.
In 1925, Britain, which should have been fully focused on restoring its economy, was anxious to save the declining status of the pound. Its Chancellor of the Exchequer Churchill ran around trying to rebuild the pre-war strong gold standard status of the pound and the fixed exchange rate of 1 pound to 4.86 US dollars.
Under his strong persuasion, the exchange rate between the British and American currencies was fixed at 1:4.86. However, the exchange rate of 1:4.86 before the war was changed to 1:4.86 after the war. According to the economic strength comparison between Britain and the United States at that time, the value of the pound was seriously overvalued, so British exports became difficult, and the British were more inclined to hold US dollars, resulting in a large amount of European gold flowing to the United States.
This situation was unbearable for Norman, the Governor of the Bank of England, but he was unable to persuade Churchill to allow the pound to depreciate and abandon the gold standard.
In the spring of 1927, Norman, along with the central bank governors of France and Germany, came to the United States to try to persuade the Federal Reserve to lower interest rates and prevent further gold from flowing into the United States. The Federal Reserve gave in and, against all odds, lowered the federal benchmark interest rate from 4% to 3.5%.
This interest rate cut was later regarded by many economists as "one of the stupidest actions in the history of the Federal Reserve", and Herbert Hoover, who was elected the 31st President of the United States a year later, defined this interest rate cut as an "act of treason."
Stimulated by low interest rates, the U.S. economy is booming.
On December 4, 1928, the 30th President of the United States, Calvin Coolidge, delivered his last State of the Union address during his term of office. He told members of Congress that the United States was experiencing an unprecedented and inspiring era of prosperity.
Although Coolidge's optimism was criticized by a whole generation of economists, objectively speaking, the US economy did make rapid progress in the five years from 1924 to 1929.
In 1924, it was still a novelty for Americans to own a radio, but by 1929, more than 10 million households in the United States owned at least one radio.
During this period, the United States invented consumer credit, and as a result, annual automobile production increased from 2.9 million in 1924 to more than 5.3 million in 1929; during this period, U.S. steel production grew at an average annual rate of 8%, while the U.S. GDP increased from US$60.8 billion to US$68 billion, while per capita GNP increased by 25%.
Of course, we can also see that the Wall Street stock index, the price index of 25 industrial stocks, rose from 106 points at the end of May 1924 to 378 points on October 21, 1929.
In the second half of 1928, the White House had noticed the crazy speculation driven by the stock market and the credit market, but because of its commitments to Britain, France and Germany, the Federal Reserve did not dare to easily abandon its low interest rate policy.
On February 7, 1929, while the United States was still considering whether to curb market speculation by raising interest rates, Britain took action first. On that day, without the United States knowing, the Bank of England unilaterally raised the bank discount rate from 4.5% to 5.5%.
This move suddenly changed the flow of capital, and a large number of investors began to exchange US dollars for gold and then remitted it to London; this move instantly led to a contraction of US dollar liquidity in the market, and as a result, the Wall Street stock market could not bear it.
On February 14, 1929, the Federal Reserve held an emergency meeting to discuss whether the Federal Reserve Bank of New York should raise the rediscount rate from 5% to 6% to prevent the sharp decline in gold reserves, but the meeting ended in failure because the participants believed that raising interest rates would suppress the stock market and domestic manufacturing.
On the afternoon of March 26, 1929, when short-term lending rates on Wall Street climbed to an unprecedented 20% and a serious shortage of funds occurred in the U.S. financial market, Bank of England Governor Norman appeared in the United States again. However, this time he came to ask the Federal Reserve Bank of New York to raise interest rates immediately.
On August 9, when the New York Federal Reserve raised the rediscount rate from 5% to 6%, the Wall Street stock market began to collapse. On October 24, 1929, the Wall Street stock market collapsed, and British Finance Minister Churchill happened to be standing on the stands of the New York Stock Exchange. He witnessed everything that happened that day and sighed like a weasel to the pheasant in its mouth: "Oh my God, poor Americans."
The scene of Churchill at the New York Stock Exchange did happen. As for the sigh, it was something Nan Yi imagined after reading the information, but it was not something he came up with casually.
In two years, Britain forced the United States to cut interest rates, inflating the US economic bubble, and then forced the United States to raise interest rates to burst the US economic bubble. This is most likely a means for Britain to deliberately suppress the United States in order to maintain its own status.
If this speculation is true, Nan Yi's imagination is also meaningful.
The Great Depression of 1929 in the United States did indeed curb the rising trend of the United States' international status, but at the same time a chain reaction occurred and Pandora's box was opened.
According to the Dawes Plan, Germany's war reparations were turned into a short-term foreign debt of 18.5 billion Reichsmarks. The Great Depression in the United States also caused British and American banks to withdraw funds from Germany, forcing Germany to once again walk the tightrope of corruption.
Although the Dawes Plan was a poison pill and Germany's debt kept increasing, debt is a mysterious thing. Some people do not have a single penny of debt, but are so poor that they have no money to eat and lose their hair every day due to worry; some people carry hundreds of billions of debts, but it has no impact on their lives. They eat and drink as they please and live a comfortable life.
Germany was originally the latter. Although the country was burdened with huge debts, the people were still able to make ends meet and did not have to worry about starvation. If things had continued to go on peacefully, perhaps World War II would not have happened. However, the collapse of the situation may not necessarily start from within, but may also come from outside.
After World War I, the Treaty of Versailles dismembered the Austro-Hungarian Empire under extremely harsh conditions, cutting off the most valuable economic circulation chain "resource supply" between Austria and Eastern European countries such as Hungary, causing Austrian industry to be reduced to ruins and never recover.
However, repaying war reparations was an inevitable obligation. At this time, the Credit Bank of Vienna, supported by giants such as the Morgan Consortium and the Bank of England, became the most powerful financial institution in Austria. The reason why the British and American consortiums supported the Credit Bank of Vienna was to let it play a very special role - acquiring small and medium-sized banks in Austria and high-quality assets that the Austrian government had to sell to repay debts.
The Vienna Credit Bank did not make any profit during this period. It only relied on cash liquidity provided by domestic savings and short-term foreign debt to maintain its operations. The funds needed to acquire assets all came from short-term financing from British and American consortiums.
It can be said that the Vienna Credit Bank is just an empty shell and will collapse at the slightest breeze.
During the Great Depression in the United States, British and American financial groups withdrew their funds and contracted their battle lines. The liquidity of the Vienna Credit Bank was immediately interrupted, but it could still be maintained in the short term.
In the early spring of 1931, Austria and Germany took advantage of the fact that Britain and the United States were preoccupied with their own affairs and re-formed a trade and customs alliance, which seriously irritated France. France believed that the German-Austrian commercial alliance would inevitably lead to the resumption of political and military alliances, thus posing a threat to the security of the European continent.
To stop this alliance, in March 1931 France ordered a drastic reduction in short-term financing to the Vienna Credit Bank.
Moreover, in order to defeat the German-Austrian alliance, French newspapers released a false news that "Vienna Credit Bank is experiencing a run on the bank." Unexpectedly, France's move not only backfired, but also triggered a credit crisis that shocked the entire European and American financial markets.
With the collapse of the Vienna Credit Bank, the German banking industry began to suffer a full-scale run. On July 13, 1931, the Darmstadt Nationalbank, Germany's second largest private bank, declared bankruptcy. Soon, people began to doubt that Germany could no longer pay war reparations, which led to a run on banks in France, Britain and even the whole of Europe...a credit crisis occurred.
After the crisis in 1929, Hoover had actually taken many measures to stabilize the US economy. He even required industrial giants not to lay off workers or cut wages in order to maintain market vitality.
At the end of 1930, the U.S. economy turned around, and the stock market recovered the losses of 1929 in March 1931. But at this time, the European credit crisis suddenly broke out, and the well-informed Wall Street tycoons once again frantically sold stocks.
After 1929, in order to strengthen investor confidence, the "rescue fund" funded by the Morgan Consortium and Wall Street financial institutions was completely liquidated.
The vicious cycle of mutual drag between Europe and the United States led to a four-year global economic depression, during which there were too many tragic tragedies.
On September 22, 1931, Britain defaulted on its contract, abandoning the gold standard and the fixed exchange rate between the pound and the U.S. dollar. At the same time, it raised interest rates again to support the strong pound. Financial institutions in various countries worked even harder to recover foreign debts. The global debt chain was completely broken, and the economy was further deteriorating.
The German economy collapsed completely and society fell into chaos. The German public was completely furious when they saw Britain's breach of trust. At the same time, France also collapsed. From 1921 to 1931, Germany was able to pay war reparations in full and on time, which had been supporting France's economic expectations. But now, this expectation has been completely shattered, and the French economic depression has naturally become a reality.
The United States was also in a miserable situation. The economic hopes that Hoover had worked so hard for were completely thrown into the abyss by Britain's domineering financial practices.
16 million people were unemployed, and millions of people had to rely on slop for a living; agricultural product prices fell sharply, and many farmers killed their livestock and threw them into mountain streams; owners could not repay bank loans, and banks could not pay depositors' deposits. By November 1932, the U.S. banking system had completely collapsed.
Despite the administrative intervention initiated by the new President Roosevelt, more than 9,000 banks in the United States were still liquidated by March 1933.
Even more unfortunate than the economic disaster in Europe and the United States was that a group of Jews in Germany took advantage of the national disaster to make a fortune. Under their operation, the price of bread in Germany rose from 100,000 marks to 500,000 marks. Although the German people could not afford a bread of 100,000 marks, there were still a few middle and upper class people who could barely support it. When it reached 100,000 marks, this group of people could not support it anymore.
These people are the backbone of German society, and each of them has the "right to speak". The injustice of 100,000 marks and the fact of 400,000 marks have been combined into one pot, and the Jews have to bear the blame.
When German people were facing the crisis of hunger, an Austrian art student who failed the college entrance examination stood up and took the lead in humming: "I am a deadbeat, I am a deadbeat, I won't pay back the money, I won't pay back the money..."
World War I and the turbulent decades after the war were all related to finance. If it is a bit far-fetched to say that World War I was caused by finance, then World War II can definitely be said to be caused by finance. Although the United States was on the sidelines and made huge sacrifices in World War II, it undoubtedly gained more.
When World War II was still going on, some people (Qiu and Luo) were considering the need for post-war reconstruction in Europe and economic recovery, and whether the world would have to return to the economic chaos that followed World War I.
The answer is naturally no. The disorderly competition for interests between Europe and the United States is the direct and important cause of the repeated wars. Therefore, the European and American powers accepted Keynesianism - since a country's internal economic activities need to be regulated by the authoritative hand of the government, then when dealing with international economic affairs, shouldn't there also be a supranational power to maintain stability and continuity?
