The Global Currency Plot

There is no such thing as chance; and what seem to us merest accident springs from the deepest source of destiny.78
– FRIEDRICH SCHILLER

With the help of the logic of human action we can explain the origin and meaning of nation and the nationality principle.

Looking back far into the history of humankind, it can be seen that people first came together in small units (first in nomadic clans, later, when they settled down, in village communities), because they recognized that the division of labor was useful. The division of labor and the trade in goods produced by the division of labor are particularly supported by the development of a common language. A small unit organized according to the division of labor therefore becomes a language community (and usually also a community of rules and values). This is the birth of the nation.

The core of a nation is a linguistic community. The origin of the nation can be traced back, by means of logical considerations of action, to the human insight into the higher productivity of acting together and working together through the division of labor. In that sense, the nation is indeed something natural. In Europe, the nation appeared as a political phenomenon when, in the eighteenth and nineteenth centuries, people began to rebel against foreign rule—to which they were exposed from within as well as from without—and to assert their right to self-determination.79 The nation as a political phenomenon has its roots in the struggle for its own freedom. The formation of the nation is not per se associated with hostility between different nations.

THE NATION AS A LANGUAGE COMMUNITY

Is it convenient to link a common language with the core of the nation? First of all, the enormous importance of language for thinking, for the exchange of ideas, for togetherness in daily life speaks in favor of this. Thinking cannot be communicated other than linguistically. And language is not a private matter. The philosopher Ludwig Wittgenstein (1889–1951) has shown that there can be no such thing as a private language (which only I understand and which I cannot share with anyone). Language guarantees the possibility of intersubjectivity; it presupposes a communication community—speaking with others.

Perhaps there is still reluctance to see the essence of the nation in the linguistic community? This may be mainly due to some apparent demarcation difficulties, which, however, can be resolved. Nation and language are not unchangeable categories; they can change over time.

The mastery of language determines the degree of belonging to a nation. The educated are fully a part of the nation, the less educated only as far as the understanding of language is accessible to them.

Most people belong to only one nation. But there are also people who have mastered several languages and can think in, and speak, them almost perfectly. They then belong to several nations or language communities.

The nation does not entail the need for different parts of the nation to converge to form a unitary state. From this point of view, for example, English and Americans—who both use the English language—can be seen as one nation.

This also applies to Danes and Norwegians. After the separation of Norway from Denmark in 1814, an attempt was made to revive the Norwegian language. Since this is strongly based on Danish, this was mainly done by enriching Danish with some expressions from Norwegian dialects. Although today they form two politically separate states, Danes and Norwegians belong to one language-nation.

In Ireland, almost all inhabitants now speak English. Gaelic, which was still dominant in Ireland at the beginning of the nineteenth century, was afterward strongly suppressed for various reasons and, despite strong promotion after Ireland’s independence, could no longer regain its former status. The differences between the Republic of Ireland and the United Kingdom’s Northern Ireland are social and religious, not national.

Different nations will enter into a peaceful and productive division of labor with each other when the conditions for this division of labor are in place. This observation comes from the British economist David Ricardo. He showed that it makes sense for people in the respective nations to concentrate on producing the goods in which production they have cost advantages. And that it makes sense to enter into the division of labor even when people in one nation can produce all goods at the lowest cost. It is advantageous for the nation which is superior in all areas of production to turn to the production of goods for which its superiority is greater, and to leave the production of other goods, for which it is also, but to a lesser extent, superior, to the less favored nation.

The problem of aggressive rivalry between nations only arose when the state—understood as the territorial monopolist of the final decisions on all conflicts in its territory—seized the nation by roping it in for its own purposes. The buzzword at this point is the nationality principle: Every nation should have its own state. While the nation, as already mentioned, has a natural origin, the nationality principle is a purely artificial product. The nationality principle is not natural, it cannot be justified logically, it is rather a phenomenon that stems from political and ideological considerations.

The nation is an obstacle to the attempt to place different nations under a central authority, a unitary state. Even the German philosopher and poet Johann Gottfried Herder (1744–1803) knew about the unreasonableness of wanting to place national character traits under a unified state leadership. He wrote: “A people/nation [Volk] is both a plant of nature and a family; only one with several branches. Nothing, then, seems so obviously contrary to the purpose of governments as the unnatural enlargement of states, the wild mixing of human ethnicities under one scepter.”80

The proponents of democratic socialism, therefore, want to bear down on the nation and the nationality principle. They wish to abolish national sovereignty and shift it to supranational levels. For example, for decades, the aspirations of the “political globalists” in Europe have aimed to remove the nationality principle from the world, in order—ultimately—to create a “United States of Europe”: a construct in which the rights of national parliamentary self-determination are abolished and replaced by a central government power.

The effort to relativize the nationality principle or to abolish it in the long term is also evident at the global level, in the political efforts to increasingly coordinate national policy fields—such as monetary and fiscal policy. These include, for example, the G20, which since 1999 has represented nineteen independent states and the states of the European Union—and thus the most important industrialized and emerging countries in the world. The G20 is not a world government, but in the longer term its political thrust is tantamount to the desire to establish a world government, a world state.

The bond between the nationality principle and the nation is much less close than it may seem at first glance: the nationality principle needs the nation, but the nation does not need the nationality principle. While it is politically possible to eliminate the nationality principle—especially since this is only a politically arbitrary institution—this does not apply equally to the nation—whose existence has an action-logical foundation.

Is it conceivable that the nation—understood as a self-contained language community—would dissolve, that at some point the multitude of nations existing in this world today would form themselves into a single nation, in the course of a voluntary decision by the people? Under what conditions would that be possible? One force of change that needs to be considered in this context is the long-term impact of the international division of labor.

It has already been mentioned that David Ricardo explained the division of labor between people from different nations through the theory of relative cost advantages. However, Ricardo’s theory is based on a very important assumption: labor and capital are internationally immobile. But what if capital is mobile and labor immobile? In this case, capital moves to the regions of the world where it can achieve the highest yield.

It is removed from regions where it is relatively abundant and generates relatively low returns and shifted to regions where it is relatively scarce and can generate relatively high returns. The redistribution of capital leads to a global alignment of the marginal efficiency of capital. Because the labor factor is immobile, there will continue to be areas that are relatively densely populated and areas that are less densely populated. Consequently, there will be no equalization of wages for equal work in the world: wages will tend to remain lower in densely populated areas and higher in less densely populated areas.

This scenario does not lead to an equalization of wages for equal work in the world, but it does lead to a more efficient allocation of capital and thus to a welfare gain. Although it is conceivable that the intensity of the division of labor and trade will also increase, it is assumed that there will be no immigration or emigration in the respective national territories. In this scenario there is no need and no incentive for people in the respective nations to turn away from their national affiliation and identity. In other words: in a world where capital is mobile but labor immobile, people tend to remain loyal to their nation, not to turn away from it. But what if capital and labor were mobile?

If not, only capital migrates to the regions of the world where it achieves the highest returns, but if labor can also move unchecked to where it achieves the highest wages, the question arises: Would the disappearance, the dissolution of the nation take place under the condition of international capital mobility and unchecked migration? Would, sooner or later, something like a worldwide united nation emerge, playing into the hands of democratic socialism? The following chapter provides an answer to this important question.

• 78Friedrich Schiller, Wallensteins, Tod (Berlin: Aufbau Taschenbuch Verlag, 1999), p. 381.
• 79The foreign domination to which an individual is exposed exists externally and internally. Then as now, internal foreign rule is usually less obvious than the external.
• 80Johann Gottfried Herder, Ideen zur Philosophie der Geschichte der Menschheit (Karlsruhe, Germany, 1794), p. 315. With regard to Europe, the French writer Michel Houellebecq (b. 1958) expressed himself entirely in line with Herder’s thoughts: “It is my conviction that we in Europe have neither a common language nor common values nor common interests, that, in one word, Europe does not exist and that it will never form a people/nation or support a possible democracy, simply because it does not want to form a people/nation. Europe is just a stupid idea that has turned into a bad dream from which we should perhaps wake up.” Quoted in Hannah Lühmann, “Europa, eine dämliche Idee,” Die Welt, Dec. 14, 2017, www.welt.de/kultur/literarischewelt/ plus185548620/Michel-Houellebecq-Europaeine-daemliche-Idee.html.