Bauer defines natinal character as ''the complex of phyisical and mental characteristics that distinguishes one nation from others...'' It is not an explanation, but something to be explained. It's is not physical, or 'natural', but cultural- the precipitation of a specific history. Capitalism levels people, uprooting them and homogenizing them through popular education, military service, and equal suffrage. It also limits the growth of national communities in order to protect its own privilege. A community of destiny therefore creates the nation, a community of character.
Instead of there being an eternal Volksgeist, Bauer believes that nations are products of history, and built on the sexual and social mingling of different groups. History in that a shared destiny specifies the direction of a shared will. Specifically, the nation is a product of the Great Transformation which produces an industrial society with a solidarity rooted in an abstract, literacy-based culture.
But capitalism also prevents the access of these people into the upper and middle-class created cultures. ''Since the national cultural values are not in the possession of the proletariat, national revolution is not in the proletarian valuation.'' It is therefore socialism's historical task to help them break out of this darkness to Enlightenment. But Buaer doesn't think that socialism will produce flat cosmopolitanism because all nations experience industrial production in similar ways, but not in common. Commonality, linking specific groups together in a 'community of destiny', creates national character. This is cultural and so separate from the State, which it is assumed will wither away. Neither Nation nor State is natural.