In 1863, John Stuart Mill made a proposal to the Basques in France: they should abandon their "inferior and more backward" nationality and merge into the French one. This absorption would be greatly to their advantage since it would help them to escape from their "own little mental orbit" and get into the "current of the ideas and feelings of a highly civilised and cultivated people - to be a member of the French nationality".
Ever since, Basques on both sides of the border have reacted to this proposal of identity change in two ways: whereas a part of the society in the French and the Spanish Basque Country adopted the identity of the nation state, others developed a new one, which was opposed to the French or the Spanish. The political expression of this identity change was the rise of the nationalist movement in the Spanish Basque Country at the end of the 19th century. This paper will analyze the main features of this complex process over two centuries. The Basque Country of the 19th and 20th centuries was a laboratory, in which some of the main problems related to the formation of the modern capitalist society and the nation state, and its consequences for culture and identity can be tested.