National identities are fates, not choices. Being Czech or German, Christian or Jewish, is not a matter of how one conceives of oneself but of how one is perceived by others. Only rarely is belonging to a nation the result of a voluntary decision.

For Europeans with plural inheritances this abstract-sounding proposition carried life-and-death implications in the period before and during the second world war, as it does today in the Balkans. The shadow cast by nationalism - the doctrine that a homogenous culture is the precondition of political order - is exclusion. Such thinking helped to make the Holocaust possible, and it underpins ethnic cleansing in former Yugoslavia.

Ernest Gellner, who came from a Jewish family which spoke both Czech and German, was well placed to understand nationalism, and particularly its darker side. Born in 1925 in Prague, at that time one of Europe's most cosmopolitan cities, he was forced to flee Nazi-occupied Czechoslovakia in April 1939. It would be easy, particularly after Gellner's experiences, to review the history of Europe in the 20th century and conclude that nationalism is a barbarous relic of tribal life whose persistence in modern societies is a lamentable anomaly. Gellner, however, rejected this commonplace view.

Determined to face facts and think for himself, he refused to follow Hayek, Popper and many other contemporary liberal thinkers in treating national consciousness as no more than an expression of atavism. Indeed Gellner always insisted that it is thoroughly modern. In Nationalism, his last word on the subject (he died in the autumn of 1995) and a book no one who wants to understand our time can do without, Gellner argues that national cultures are responses to the mobility and anonymity of modern societies. Far from being a movement of retreat from the modern world, nationalism is a solution to some of its most distinctive problems.

In pre-modern societies most people understood one another through the meanings shared in traditional local cultures. In modern conditions such local cultures are broken up by the imperatives of labour mobility. Work requires an ability to understand instructions given by strangers. Communication among people who do not know one another is not an optional extra in societies based on economic growth and continuous technological innovation; it is a functional necessity, Gellner argues, and this is what compels the creation of national cultures.

Unlike folk cultures, nations allow strangers to communicate by imposing a common language in which meaning is not dependent on local contexts and usages. Many theorists have argued that national cultures are responses to modern atomisation. Gellner's insight is that national cultures do not return modern people to an imaginary condition of organic community, but enable them to function in the impersonal environment of modern societies. In Gellner's account, nationalism is an unavoidable by-product of economic and technical progress. It is not an accident in the history of ideas. That latter view was advanced by Elie Kedourie, for some time a colleague of Gellner's at the London School of Economics, when he wrote that "Nationalism is a doctrine invented in Europe at the beginning of the l9th century." Kedourie argued that nationalism was little more than an error put about by a few Romantic scribblers a sort of treason of the intellectuals - and not a response to economic and social needs.

Generously, Gellner gives Kedourie credit for making him see that nationalism is not a universal, natural human trait. But Kedourie's account of nationalism fails to take the measure of the challenge that nationalism poses to Enlightenment beliefs. Marx - in this respect a standard Enlightenment thinker - expected national sentiment to decline in political importance along with industrial development and scientific knowledge. He allowed that national cultures might persist, but insisted that they would no longer be a focus of political loyalty or a source of war. When this belief was exploded by working-class support for the first world war Marxism suffered an intellectual defeat from which it never recovered. But far more than a particular social theory was destroyed. What has been overturned by the power of nationalism in the 20th century is the central Enlightenment understanding of what it means to be modern.

With a few exceptions Enlightenment thinkers believed that industrial and scientific progress would lead to a civilisation in which ways of thinking based on particular traditions would be set aside in favour of a universal rational dialogue. Progress towards this condition might not be inevitable; it could well be slow and intermittent, or derailed for ever by a great war. Nevertheless, barring catastrophe, the movement towards a universal civilisation was underwritten by the advance of science.

Gellner's theory of nationalism offers an Enlightenment explanation as to why these Enlightenment hopes have been disappointed. As such it is illuminating and suggestive, though hardly demonstrative. As Gellner was fully aware, the power of nationalism is only one of the ways in which Enlightenment expectations have been overthrown by the 20th century. The continuing and, in some contexts, growing presence of religious belief in modern societies is another.

The awkward fact of religion's undiminished power was a greater threat to Gellner's Enlightenment world view than nationalism. He did not dispute the sociological conventional wisdom in which secularisation and modernisation go together. He argued instead that, because nation states have never taken deep roots in Arab culture, Muslim societies are an exception to this rule. Modernisation in Islamic societies, he argued, works to promote fundamentalism: "Islam is unique among world religions in being, so far, clearly incompatible with the widely held secularisation thesis". Thus his Whig interpretation of history, and the Enlightenment understanding of modernity, are supposedly saved by subtracting Islam.

But this works only if we ignore evidence from other cultures. It is not only in Islamic countries that fundamentalism and modernisation run in tandem. In India, economic liberalisation has been accompanied by the growing strength of political Hinduism. In Korea modernisation of the economy and family life has occurred along with large-scale conversion to Christianity. Above all, in the United States, hypermodernity has long coexisted with mass religiosity, much of it fundamentalist even to the point of denying Darwin.

To affirm the Enlightenment understanding of the modern condition in the face of such evidence is an act of faith, not a conclusion of rational inquiry. In truth, we do not yet know what it means to be modern. Gellner thought of himself as a sceptic; but, as this splendid little book testifies, he was at heart a believer, who could not bring himself to give up the groundless certainty that Enlightenment and modernity are one.

John Gray is professor of politics at Oxford University