While capitalism is responsible for this positive development, it cannot realize the potential for international understanding, cooperation and peace that economic interdependence offers. The profit system demands economic competition, even when it is destructive and no longer necessary for industrial development. Rulers and would-be rulers thus look to nationalism to create states that will ensure them a piece of the profit pie. Even in nations that are ethnically homogenous, such as Japan, there is still division and conflict in society because the owners make profits through exploitation, taking the wealth produced by the workers. This is why there is poverty amidst plenty, why there is unemployment, insecurity and stress at the same time the means exist to secure every individual's well-being.
Exploitation makes nationality irrelevant.
Serbian capitalists and state bureaucrats exploit Serbian workers, while Croat owners exploit Croat workers. Each group of thieves wants the opportunity to exploit the other's workers even more intensely than it's own and uses its own nationalism against the other's nationalism as its excuse to do so. It only changes who does the exploiting. Genuine freedom means ending exploitation. Since workers of all nationalities are exploited, they have a common interest in uniting to resist and overthrow exploitation.