The raison d'etre of the nation-state is the ideology of nationalism. Yet, nationalism is a complex notion which encompasses the society, the state and the economy. It comprises of a complex nexus of multiple loyalties of an individual as a member of the society, duties and rights of the citizen in a reciprocal political arrangement with the state, and the role of the individual as a producer and consumer in the economy. While the balance among these different aspects of nationalism evolved historically, in the present area of globalization this balance seems to be shifting in favour of global market forces. Its consequences for the nation-state, and the new role that it needs to define for itself, especially in terms of economic policy, is the theme of this paper.