BUSINESSWEEK ONLINE : AUGUST 30, 1999 ISSUE

Two forces that were supposed to unify the world are actually helping nations to splinter: The Internet and the global economy

In 1950, there were 58 nations in the U.N. Today, there are 185. If that rate of proliferation continues for another century, the U.N. or its successor will have nearly 2,000 members. Imagine some of the new governments, replete with flags, anthems, national birds, and Olympic bobsledders: Scotland. Quebec. Palestine. Kosovo. Tibet. Kashmir. South Ossetia. Kurdistan. Timor. Biafra. New York City.

Countries are fractured into new nations by two global forces that were supposed to pull everyone together: the Internet and the global economy. The Net, often seen as a force for universalism, actually makes nationalism easier to express and share. Basque or Quebecker Web pages abound, concentrating the power of breakaway elements.

At the same time, the globalization of the economy enables small fry to go it alone. With open trade, countries with something valuable to sell can break away from bigger neighbors and support themselves. They don't even need their own money supplies. Even old-time powers like France and Germany are dropping their national currencies. And with regional security umbrellas, small countries needn't bother with their own armed forces.

If the Basques of northern Spain won independence, for instance, they would promptly file for membership in the European Union, adopt the euro as a currency, and maintain virtually open borders with neighboring Spain and France. Little would change. In fact, the clamor for independence is intensifying. Already, the Basque language, after being suppressed by dictator Francisco Franco, is flourishing.

NEW BALKANS. The problem is that Spain won't let them go. If the Basques are allowed to break off, the Spanish government argues, then the Catalonians (centered in Barcelona) and the Galicians will want out, too. Suddenly, Spain could be torn from top to bottom by ethnic rivalries.

Too often in the 21st century, the birth of nations will be violent. The same welling up of nationalism that gives rise to new countries also produces a reaction from mother countries that don't want to give up parts of themselves. China refuses to cede Taiwan. Israel hangs on to the West Bank, Indonesia to East Timor. Imagine the horror of Yugoslavia's breakup repeated over and over in the century to come. If every would-be nation in the world were to assert independence, the bloodbath would be ''unimaginable,'' says Boston University international relations professor David Fromkin, author of The Way of the World: From the Dawn of Civilizations to the Eve of the 21st Century.

All this talk of blood and soil seems irrelevant to globe-trotting multinationalists, whose world revolves around conference tables, laptop computers, frequent-flier miles, and stock options. These globalists speak the cool, rational language of money. But such people are in the minority. Nationalists, like Yugoslavia's Slobodan Milosevic, speak of ancient loyalties and grievances, and theirs is the language that stirs the blood among people whose allegiances are local and tribal.

It may be possible to accommodate nationalistic fervor in a relatively civilized fashion. Great Britain, for instance, has granted a form of home rule to the Scots and Welsh without undue trauma. But even in Britain, there are fears that one effect of the semisplit will be to isolate Scotland and Wales from the world economy.

The risk is that as advanced information societies such as the U.S. and Western Europe form transnational confederations, regions that are left out of the confederations will go in the opposite direction. They may become even more nationalistic, more torn by violence. The poor nations of the world could break, like vases on the floor, into thousands of pieces.

By STEPHEN BAKER

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