Nationalism is similar to democracy ("The worst form of government, except for all the others that have been tried from time to time"-Churchill) in that for all its flaws, it remains far superior to the alternatives. A world organized into nation-states presumes a certain level of nationalism to function. Countries like Canada and Belgium are no exception-they are not de-nationalized states, but rather weak states polarized between two opposing nationalisms. More common are the 'state-nations' of Africa, the Middle East and much of Latin America, where the absence of any nationalism leads to rampant corruption and makes a democracy no more than a fig-leaf for oligarchial rule by native elites and foreign investors.
Nationalism is often blamed for war, but it is usually a scapegoat for other causes. Only when nationalism is combined with a racist belief in a 'chosen people' destined to rule over others, or exterminate them (WWII), or a militarized aristocracy spoiling for a fight (WWI) does nationalism turn ugly. In our own time, a deficit of nationalism is far more likely to cause conflict than the reverse. This is true most of all in the Middle East, where religous fanaticism is filling a nationalist vacuum. Unless monarchies and caliphates make an unexpected comeback, nationalism is here to stay; the best option is not to condemn or ignore it, but rather channel it away from war and towards peaceful competition. There are countless bad books about nationalism; one rare good one is Greenfield's 'The Spirit of Capitalism: Nationalism and Economic Growth', which explains how nationalism was indispensable to the economic development of England, Japan, Germany and the US over the last 200 years.