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I think if you are talking about Nationalism in the terms of patriotism we have to say that is good, we have always embraced patriotism. However if we are talking Nationalism in the form of our nations interest with no concerns for other nations it is not a good thing.
Patriotism is one thing, loyalty to country is one thing, but nationalism, to me, represents an extreme sentiment. It's the idea of "my country, right or wrong".
Every country acts in its own self-interest, to be sure, but this is not nationalism, rather, it is realpolitik. We cannot reasonably expect that nations and governments will act out of simple goodwill, or altruism. Individuals, groups and churches do all the time. The individual is motivated by different factors and acts differently than government, which is my point.
I do not think we should embrace any nationalism at all. We should not follow our leaders or support their policies blindly, without a healthy amount of criticism and skepticism. This is how we will protect individual rights, human rights and a measure of democracy. Nationalism, on the other hand, encouraged both World Wars and have led to some of the most destructive and inhumane policies in human history.
To me, there is good nationalism that should be embraced and bad nationalism that should not be. The good nationalism makes people proud of their country and inspires them to work hard to improve it. The bad kind makes them think that their people or their country is superior to others and influences them towards conflict with other countries.
The perfect example of the bad nationalism can be seen in the actions of Japan and Germany in the time leading up to WWII. Both countries had people who saw themselves as superior and used that feeling as a reason to conquer other countries. This is clearly not helpful.
On the other hand, pride in one's country is a good thing. I think that you can see this to some extent with the rise of China. As Chinese people take more pride in their country they push it to become economically stronger and away from feeling like a second rate country. (We still have to see, though, if they will push it towards conflict with other countries.)
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