5 - How Will Nationalism Evolve?

Summary

The biggest trick that the nation-state concept has pulled on modern man is the proposal that there is an essential line between the external and the internal.

Sovereignty over precisely demarcated territory is the underlying notion. It is here the nation-state is most easily understood. And so, in all countries, the Home Ministry and the Foreign Ministry are powerful institutions, alongside the Defence Ministry. Here lies the hardware of the nation-state, where protocol and ceremony blend with threat of violence and incarceration to secure the state apparatus inwardly and outwardly.

Domestic peace and international security exist in apparent separation, making up what is commonly called politics. No line is deemed clearer politically than the one between citizen and non-citizen, except perhaps that between ethnic groups in the case of Malaysia.

However, what is external and what is internal become more difficult to distinguish once we move to the economy. No doubt, the management of the national currency and fiscal policies seem definable as internal matters. But once we move to economic growth and the balance of payment, and are aware of the mobility of capital and skilled and unskilled labour, the blurriness of the line becomes blinding.

Today, Gross Domestic Product no longer reflects the health or wealth of the country's economy the way it used to. This is because MNCs are now extremely mobile, and tend to enjoy tremendous tax exemptions, and the labour employed and resources used can be largely imported. To a substantial extent, their long-term contribution to a country's nationbuilding is no longer easy to ascertain.

This increasing mobility of capital and labour mounts a profound challenge to the nationalist mindset. For one thing, national policies have to compete through accommodation to global capital and mobile labour. Compromises are made between the basic state duty of benefiting citizens on the one hand, and the need to attract globally capital and labour by lowering demands for contributions to long-term nation building on the other.

Secondly, governments are enticed to act as major capitalists in highflying global markets. In the process, the logic of profit maximization in gigantic government-linked companies grows to distort the idea of citizen ownership of national wealth.