Nationalism, according to Geller

I have some issues with Geller's thesis on the relevance of nationalism in the industrial state. He alleges the following: group identities arise because individuals and collectives need to associate with the bureaucracies of an industrial state. If a group controls the bureaucracy, it gets favored status. If not, its identity forms around its isolation from the mainstream.

The problem with his point is that he fails to acknowledge other, countervailing tendencies on the issue of nationalism. Markets in particular tend to break down artificial barriers of discrimination. What Geller is referring to is not the capitalist state, but one that unites economic and political power in a single body (some, including Mussolini, called this fascism). The market and the bureaucracy, in the non-'fascist' state, are inversely proportional. So long as economic forces outpace political forces, nationalism shoud decline rather than grow. In other words, Geller is referring to a particular political situation that can increase nationalism--the fusion of economy and state into one Leviathan. As long as capitalism proliferates faster than bureaucracy, we should be able to avoid this situation.

An example of how markets are anti-discriminatory: let's say I'm a greedy capitalist pig. I want to pay a worker who's real wage value is $15 as little as possible. In this case, say the most I can get away with is $7. My competitor, however, also a greedy capitalist pig, realizes that I am underpaying my workers. They offer to pay my workers $7.01 or something like that. The logic of the capitalist will lead the nominal wages of the workers to steadily approach $15, their real worth.

"But wait, what if they're bigots?!?" All this model assumes is that not all employers discriminate homongenously. Varying levels of discrimination mean that the less bigoted are rewarded and the more bigoted are punished. It may take longer, but the same process will occur.