Britain has lost its sense of identity, argues Keith Hart, who predicts that this country is on its last legs.

Western values have officially remained more or less the same since the liberal revolutions of the 17th and 18th centuries, whereas society has been transformed - first by industrial capitalism and the nation-state, and then by multinational corporations wielding increasing influence in an integrated world economy.

For at least a century, Western societies have been based on impersonal principles (the state, capitalist markets and science). This has placed an intolerable strain on the idea of personal agency, which underpins what we are told is our way of life. The result is confusion, a mixture of passivity in the face of anonymous forces and a craving for recognition as a unique personality. This existential crisis sometimes takes the form of questioning national identity.

There is no such crisis in India, China, Brazil or South Africa. North America's brand of business-driven government linked to an aggressive nationalism resembles the fascist regimes of the 1930s. Everyone in the former Soviet Union and its satellites, from peasant parties to former communists and even the KGB, wants to wrap themselves in the flag.

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Emigrants from African countries, for all their ethnic pluralism at home, invariably assume a national identity abroad, just as Europeans did in the 19th century. If there is a crisis of identity, it is in Western Europe and especially in Britain - where the UK shows signs of being on its last legs after only three centuries of existence.

The revolutions of the decades around 1800 unleashed a new universalism that found its counterpart in the international movement to abolish slavery. Society was on the move everywhere, propelled by Napoleon's armies and British industry. But this also provoked a reactionary backlash: nationalism and reinforcement of the security state. The idea of being a nation represented an escape from modern history, from the realities of urban industrial life, into the timeless past of the volk, of the people conceived of as a homogeneous peasantry, living in villages near to nature, unspoiled by social division, the archetype of a community united by kinship. Before nationalism, Western intellectuals compared their societies to the city-states of the ancient world. Now they fabricated myths of their own illiterate ethnic origins in primeval forests. Traditional society was conceived of as being outside the social forces that made the modern world, in time and space. Romantics drew on rural imagery to invent a national culture capable of resisting these forces by slowing them down. Their slogan could have been "Stop the world, I want to get off". This is why Western agriculture carries a political weight today far beyond its economic importance.

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Modern states have appropriated the rhetoric of democracy while reserving real power in remote bureaucracies. We are all equally free and are committed to democratic principles. Yet we must justify granting some people inferior rights, otherwise functional economic inequalities would be threatened.

This double-think is enshrined at the heart of the modern nation-state.

Nationalism is racism without the pretension to being as systematic or global. Nations link cultural difference to birth and define citizens' rights in opposition to all-comers. The resulting identity, built on regulation of movement across borders, justifies unfair treatment of non-citizens and blinds people to humanity's common interests. So, apart from the state as a social form, one problem to overcome is its culture.

State, society and community have been merged in the nation to create a highly tenacious master concept.

There are at least four types of community incorporated into the idea of the nation-state: a political community monopolising relations with the outside world and providing money and law at home; a community of place, a nested hierarchy of territories; an imagined community, constructing cultural identity through symbolic abstractions of a high order; and a community of interest, uniting people in trade and war for a shared purpose.

In the 20th century, most people experienced society at every level through the lens of national identity. But the world economy has been turned upside down since the watershed of the 1970s. Manufacturers have been relocated to Asia, especially China, and information services are finding their way to India. The Third World has been through an urban explosion to match its population growth and, in the form of debt repayments, has transferred unprecedented sums to the rich countries, notably the US, where the digital phase of the machine revolution is concentrated. World society has been formed as a single interactive network through a combination of neoliberal economics and the internet. The rise of transnational corporations, with their slogan "you can't buck the markets", has been accompanied by the dismantling of welfare states.

This new world market is an engine of stark inequality. The egalitarian premises of nation-states, seeking to curb capitalism's polarising tendencies, have given way to a world in which "the rich get richer".

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We could regard this as humanity being temporarily caught between national and world forms of society. Or we may have reverted to an imbalance between market and state typical of the 19th century, before national regulation aspired to curb domestic capitalism.

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If capitalism is out of control, what political units and strategies would make it more democratically accountable? We could put our faith in reinforcing the powers of the nation-state against globalisation; in developing regional federations, such as the European Union; or in strengthened global institutions and networks. The problem is that each of these makes bedfellows of interests that have been traditionally opposed as right and left. Thus nationalism throws together greens, the unions and racist anti-immigration groups.

In regional federations the voices of popular interest groups are drowned by those of the member-states and big money. A global strategy juxtaposes the transnational corporations, the International Monetary Fund and the strongest states with democratic associations, such as the World Social Forum. "Civil society" is thus split in ways that defy traditional classification, thereby adding to the political confusion.

This development is most apparent in Western Europe, where the political experiment of the European Union has provoked a crisis of national sovereignty, especially for the peoples of the Northern fringe. Countries with ageing populations and no experience of colonial empire are responding to intensified Third-World immigration with hysterical concern for recently forged national identities. But the prime example of neurotic preoccupation with these issues is Britain.

Britain also has a creeping constitutional crisis with so many dimensions as to be almost invisible because it is all-pervasive (see box). Britain is falling apart. It is not surprising that the threat of all this unravelling would provoke a conservative backlash, fuelled by governments of the right and left and by the media. Yet, contrary to Victorian imperial propaganda, the British are a revolutionary people with a taste for violence and a disciplined passion for fairness. If any three or four of the dimensions listed above became critical at once, the balloon really could go up.

The idea Britain as the most unstable major polity in the world today is counterintuitive. Even so, it is reasonable to speculate on how it all might end.

I once had a dream in which a middle-class woman in a kaftan knocked on my door. She said: "We have occupied St. Luke's nursery to keep it open. We have put up barriers on Hertford Street to slow down traffic. And we have started a tax strike for decent public education, health and transport. Are you with us?" "Yes", I replied, "I will help organise the email campaign."

You can be in my dream, if I can be in yours - and Bob Dylan said that.

Keith Hart teaches anthropology part time at Goldsmiths College, London, and lives in Paris.

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THE CREEPING CONSTITUTIONAL CRISIS

Being British - Index page