Dani Rodrik writes: For many, the nation-state evokes nationalism, the extremes of which have meant war and death to millions. But a corrective is in order, to remember not just the ideological excesses of the ‘nation’ part, but also the transformative, historic role of the state component. As scholars of nationalism like to say, the state usually precedes and produces the nation, not the other way around. The best definition of the nation remains that of Abbé Sieyès, one of the theorists of the French Revolution: ‘What is a nation? A body of associates living under one common law, and represented by the same legislature.’ Ethno-nationalists, with their emphasis on race, ethnicity or religion as the basis of nation, have it backward. As the historian Mark Lilla at Columbia University put it recently: ‘A citizen, simply by virtue of being a citizen, is one of us.’
Robust nation-states are actually beneficial to the world economy. The multiplicity of nation-states adds rather than subtracts value.
A principled defence of the nation-state would start from the proposition that markets require rules. Markets are not self-creating, self-regulating, self-stabilising or self-legitimising, so they depend on non-market institutions. Anything beyond a simple exchange between neighbours requires investments in transportation, communications and logistics; enforcement of contracts, provision of information, and prevention of cheating; a stable and reliable medium of exchange; arrangements to bring distributional outcomes into conformity with social norms; and so on. Behind every functioning, sustainable market stands a wide range of institutions providing critical functions of regulation, redistribution, monetary and fiscal stability, and conflict management. These institutional functions have so far been provided largely by the nation-state. [Continue reading…]