Nation-states as historical constructs

Another question that requires consideration is that some may argue that the very idea of the nation-state is a historically specific construct, relevant only to a certain period (for example modern capitalism).

Only since the second half of the eighteenth century did it gradually take on the significance that it has for us today... The word and concept nation belong completely to the modern sphere of ideas of political and philosophical individualism.

(von Mises, 1983, 34)

In the Middle Ages, people identified more with local or regional identities rather than clearly- defined nations, and in the future the individual nation-state (it is alleged by some) will become ever more eroded, as economic globalization proceeds apace.

A famous article on this topic from the late nineteenth century entitled ‘What is a Nation?’ by Ernst Renan explained that:

The modern nation is therefore a historical result brought about by a series of convergent facts. Sometimes unity has been effected by a dynasty, as was the case in France; sometimes it has been brought about by the direct will of provinces, as was the case with Holland, Switzerland, and Belgium; sometimes it has been the work of a general consciousness... as was the case in Italy and Germany... But what is a nation? Why is Holland a nation, when Hanover, or the Grand Duchy of Parma, are not?

(Renan, 1882)

Renan’s answer was that a nation was ‘a soul, a spiritual principle’, a unity of past legacy and present consent based partly on common ancestry and heritage, and partly on ‘a daily plebiscite’ of common agreement. This wide conception of national consciousness could encompass entities as disparate as twenty-first-century Germany within Europe and the nineteenth-century Zulu nation in Southern Africa. Obviously these two constructs were very different in many important ways, but they both had some variant of what Renan called ‘a unity of heritage and legacy’.

Another very different conception of the nation-state proposed by contemporary Marxist dependency theorists such as Samir Amin is that ‘the formation of what are today called nations is closely linked with the crystallization of a state and the centralized circulation at this level of a specifically capitalist surplus’ (Amin, 2009, 256). That is, the nation-state is merely a ‘bourgeois’ class construct designed to control the surplus product generated by the global circulation of capital operating through trans-national companies. Although this ‘nation = capitalist state' conception has some interest as a point of comparison, it cannot by itself explain the frequent coincidences between nation and language/cultural identity, except of course entirely as ‘false consciousness', as opposed to the ‘true universalism' or internationalism that is often hypothesized by Marxists in its place.

One problem among many with this ‘true universalist' approach is that whenever it has been attempted in practice, it has invariably broken down along some previously existing cultural/ religious/ethnic/national fault-line that had been assumed away by its advocates, but which turned out to be of greater resonance than the proposed comradeship of the globe. If national consciousness is merely false consciousness, then the crafty spell that has been spun to promote it is an unimaginably powerful one. Another argument against Amin's critique of what he calls ‘Eurocentrism' is the actual geographical centre of the trans-national capital that he blames for under-developing the exploited periphery, which has for the second half of the twentieth century been located a whole continent away from Europe in the United States of America. Shouldn't ‘late capitalism' be more accurately labelled as North America-centric?

But why examine economics within such disputed national bounds? One answer would be that the nation-state has for a long period been taken as the defining geo-political construct, either positively by nationalists or negatively by Marxists, despite there being periods before (and perhaps after) when it was/will be less important.

Schumpeter's answer was that nationality affected the general social philosophy of economists more than their technical analysis, and that some classical economists like Nassau Senoir commented ‘on the behavior of Dutchmen and Englishmen and Indians of Mexico' under the wider category of matters of observation (576). Once nationality becomes a matter of empirical observation, however, further issues then arise: how many Dutchmen must be studied to achieve a representative picture and over what period of time? Might the culture and traditions of Dutchmen evolve alongside the Dutch nation itself?

It should not be forgotten that, although it is not always emphasized by commentators, the most famous single work in political economy is entitled An Inquiry into the Nature and Causes of the Wealth of Nations, not The Wealth of the World. For Adam Smith the ‘hidden hand' of the market was a universal mechanism, but the nations in which it operated were separate and distinct entities. And Joseph Dorfman began his magnum opus The Economic Mind in American Civilization with the statement that: ‘In America as elsewhere, economic thought is an integral part of culture' (Dorfman, 1947, ix): it is clear from what followed that he meant American culture. The implicit contradiction of applying Smith's ‘universal mechanism' within a ‘disparate nations' approach is brought out clearly in a book entitled British Economists, which begins with the absolutely certain declaration that: ‘Economics is a science, and in general science knows no national boundaries' (Hood, 1931, 1): the author then immediately adduces reasons why the focus will be exclusively on British economists.

Here is found a mirror image of Amin's paradoxical critique of international Eurocentrism: if a unified geographical entity called ‘Europe' is really the power-base for global capital, as Amin suggests, then this would heighten the significance of national/continental identity, it would not prove it to be a mirage. Finally, not even Ptolemy could square this ‘national versus international' circle, assertively declaring in his Cosmographia that he would treat the physical geography of nations by:

... spurning the multitudinous traditional farrago concerning the peculiar qualities of their different inhabitants, except that, in the case of qualities renowned by general report, we make a short and suitable note on the religion and manners.

So, not quite ‘spurning the farrago' of peculiar national manners then. Despite these contentious issues, some of which remain unresolved, it is clear that understanding to a greater degree the national focus or national origins of economic ideas is potentially a very fruitful undertaking.