A concept of national identity can draw a group—even a very large group—of people together and give them a sense of pride. It unites people around ideals that are larger than the individual and offers a sense of deep kinship with others who seem to share the same values and aspirations. For example, the entry in World War II brought the American people together to fight a common foe and to stand for values such as democracy, freedom, and human decency.
On the other hand, a "national" identity presupposes that other nations are different and outside the circle of identity. This can lead to a "them versus us" mentality, and the idea that people of other nationalities are the enemy. This can make international cooperation difficult. Highly nationalistic countries, such as North Korea, can view other nations with great suspicion and turn in on themselves, becoming isolated from the larger world community.
Also, if national identity is too rigid and exclusive, it can lead to defining groups within the nation as alien to that identity and treating them as second class citizens or worse, up to and including deciding these groups must be eradicated.
The concept of a national identity can unite those who fit the national identity and divide those who do from those who do not.
The "in group" can be strongly united by their national identity. We saw this, for example, when Germans were tied together strongly by their national identity in the Nazi years. More benignly, there are countries like Japan today where the people share a strong sense of unity. This brings them closer together than is possible in more diverse cultures like the US.
But national identities also divide people. In Nazi Germany, "Aryans" were divided from everyone else and the Jews were separated and treated in the most horrible manner imaginable. In Japan, the strength of Japanese national identity can serve to exclude people like Koreans who were born and raised in Japan but do not fit in to the national identity.
In these ways, a national identity both unites and divides people.
In a country like the United States which is made up of such a diverse group of people finding a true national identity without offending some group of people is sometimes difficult. As mentioned above, we usually see that in times of crisis we are able to unite under one identity for a period of time.
I would add, too, that even people who are American sometimes feel like outcasts in their own country. They are embarrassed when their neighbors put out American flags or signs which have the Ten Commandments printed on them. They may be disgruntled if they belong to a minority group which does not "fit in" with the majority.
It goes along with the saying, "One can feel very alone in a crowd."
Clearly in our globalised world where pretty much every nation has a number of immigrants in it, national identity is going to be a hot potato that will simultaneously unite and divide those people that make up a nation. That is because any issue that unites Americans together, shall we say, is going to automatically make non-Americans feel left out. I always find it interesting whenever the Football World Cup (proper football, not American football) is on, as suddenly you have people supporting different nations as they play each other. Something that should unite nations, actually paradoxically divides them, as supporters of England are ranged against citizens of Britain who may have other loyalties.
I think that Post #2 has it exactly right. Whenever a people come to feel that they have something in common, they tend to exclude people who do not share that trait. This tendency can have very bad consequences. The most obvious historical instance of such consequences is the anti-Semitism that led to the Holocaust. The German people were encouraged to feel a sense of national identity and that identity helped make them strong. At the same time, though, it allowed the to see Jews as so completely "other" that they did not deserve to live.
A strong sense of national identity can unite people by making a group of individuals feel like part of a cohesive whole. For example, after the terrorists attacks on 9/11, this country experienced the strongest sense of national identity I have personally ever witnessed. Every car had a flag attached to the antenna, every shop had a collection jar to help fellow Americans, and so on. A strong sense of national identity helped American heal from our wounds. We were all proud to be Americans.
However, all of this good feeling had a downside. People who were NOT Americans, especially Arabs, were immediately suspect, an "Us-versus-Them" mentality quickly set in. Mosques were vandalized, threats were made, and a sense of foreboding and prejudice against anyone who looks to be Middle Eastern continues to this day.
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