The Future of the Dollar
U.S. Financial Power Depends on Washington, Not Beijing
Since the French Revolution, nationalism—the idea that state borders should coincide with national communities—has constituted the core source of political legitimacy around the world. As nationalism spread from western Europe in the early nineteenth century, it became increasingly ethnic in nature. In places where the state and the nation did not match up, such as Germany, Italy, and most of eastern Europe, the nation tended to be defined in terms of ethnicity, which led to violent processes of unification or secession. At the beginning of the twentieth century, ethnic nationalism came to disrupt political borders even more, leading to the breakup of multiethnic empires, including the Habsburg, Ottoman, and Russian ones. By changing the size of Europe’s political units, this undermined the balance of power and contributed to two world wars.
But then came the liberal norms and institutions established in the wake of World War II.