Is your friend literally a time-traveler from the 19th century? Because that's about the last time anyone actually thought such an idea was a meaningful way to explain history.

Really, though, you can see how that idea breaks down when you subject it to scrutiny. Indeed, I would attack it at its most basic premise: that groups like the Normans, Anglo-Saxons, and Celts are groups that are fundamentally distinct from one another and other human groups (such that it makes sense to give them names) and that their differences make them uniquely suited to "power." Even if we can identify discrete differences in these groups (and maybe we can identify them genetically), we have no way of knowing that there is anything about those differences that causes the "amalgamation" of these people to make them powerful. Further, the considerable movement of peoples throughout history--there are basically waves of people moving into Europe going back thousands of years, and continual mixing of populations--means that whatever biological characteristics your friend thinks are so important are either not unique to those groups or must have developed very rapidly during the relatively short windows of time that we can look at the vast agglomeration of humanity in northern Europe and pick some of them out at "Normans," "Anglo-Saxons," and "Celts."

(Plus, this "entity" has not been "powerful" throughout its history; England and later Britain were largely marginal players in major European politics in the early modern period. England in the 15th century was wracked with internal conflict, as was the whole archipelago in the 17th century.)

But really, the question comes down to this: what is the precise mechanism by which this process works? At what point can we look at British history and say "These people won this war because of their racial character"? Let's take the case of the conquest of India for an example, as virtually everyone would agree that this was an enormous part of the empire and Britain's ability to project power. How precisely did the East India Company come to rule so much of the subcontinent before 1857? Well, there's a combination of factors. First is the internal weakness of the Mughal Empire that developed through the 18th century. Another is the EIC's commercial power and interests, both of which grew over the same period. The EIC found it necessary to deploy soldiers to protect its commercial interests (such as loans or other investments to local magnates) and to project power in India; to do this, it used some European troops, but the bulk of its army was always local. Indeed after the consolidation of British power in the subcontinent, the Indian army was a huge part of projecting British power elsewhere in the world: Africa and New Zealand, for example. So where, precisely, is the Norman, Anglo-Saxon, and Celtic influence in this? Are we going to say that this combination of (pseudo-)racial backgrounds made British people uniquely driven to go elsewhere and trade and conquer? Well, lots of other people in history have done that as well. Plus, what about the overwhelming majority of British people who never went to imperial places to trade or conquer? Are they somehow not as good at being British?

We could say the same thing with respect to industrialization. I suppose your friend (is his name Nigel, perhaps?) would say that British people are uniquely inventive, commercial, and hard-working. Well, two questions suggest themselves. First is that however inventive, commercial, and hard-working they were, it's pretty tough to imagine Britain industrializing without coal (and colonies--but that's a bigger issue). Second, there were plenty of Britons who resisted technological changes, the commercialization of their social relationships, and the long hours they were effectively coerced into working. If we're going to say that there's some unique racial background that makes British people do these things, we're going to have a very difficult time explaining how so much of British history is driven by conflict, not by some mystical, racial consensus created by this bullshit racial "amalgamation." Hell, even one person who did a lot of work to invent this idea of Englishness as a combination of racial-national-amalgamation, Walter Scott (read his novel Ivanhoe for a great expression of this, c. 1820), saw a great deal more conflict in British history than anything else.

So, yeah, your friend has no clue what he's talking about.