Christopher Layne, The Peace of Illusions: American Grand Strategy from 1940 to the Present (Ithaca: Cornell University Press, 2006), 290 pp., $29.95.

Harold James, The Roman Predicament: How the Rules of International Order Create the Politics of Empire (Princeton: Princeton University Press, 2006), 176 pp., $24.95.

"You can do a great deal with bayonets, but you cannot sit on them", said the shrewd Habsburg statesman Felix zu Schwartzenberg after the European revolutions of 1848--a sentiment that was relevant then and is gaining adherents in America since the Iraq War. The war has revived a sense of limits and realism, an ideological shift akin (in proportion but not substance) to the reassessments that followed the fall of the Soviet Union.

Against this theoretical backdrop, two important new books by Christopher Layne and Harold James reinterpret, from different perspectives, international politics and the United States' role as guarantor of global stability. Layne asks whether current policies have created a peace of illusions that might be shattered by an unforeseen crisis, and he opens by exploring the origins of American supremacy and the strategy behind it. Starting from an analogy with Rome, James describes the mounting domestic tensions that increasingly threaten the global system and an interconnected world.

Layne insists that an expansionist U.S. policy has long aimed at securing what he calls "extra regional" hegemony in Western Europe, East Asia and the Persian Gulf with an eye to establishing the United States as the most powerful international actor since imperial Rome.

When the United States made the transition from wealth to power after 1890 (as described by Fareed Zakaria), it adapted the concept of a national economy as derived from Friedrich List's writings, and applied tariff policy with an eye towards increased access to overseas markets. The Open Door policy toward China, which rejected that country's partition into spheres of influence from which other powers might be excluded and demanded instead equal access to Chinese markets for all states, set the paradigm for later strategy. Layne details how the United States subverted the British Empire through conditional aid and political leverage, and made the abolition of Britain's imperial preference a leading objective in pursuit of its "open markets" strategy. But the soft power of American diplomacy and financial leverage had failed to secure economic interests in Europe, and the Great Depression underlined the danger of exclusion from core markets. Wealth had brought power, but only the exercise of power could secure that wealth.

Layne rebuts the venerated notion that American hegemony--pre-, during and postwar--preserved an international order benign for allies and the United States. Despite the broad success of America's extensive European and Asian engagement from the 1940s onwards, that enterprise generated hidden financial costs, prompted unnecessary interventions and contributed to Layne's perilous peace of illusions.

Layne argues that, far from reluctantly emerging from Arcadia to battle totalitarianism in 1940, American policy deliberately sought to undermine rivals and establish a new order based on the open door, offering an account that departs from the conventional assumptions Norman Davies calls "the Allied scheme of history." American exceptionalism has been driven not by disinterestedness, but rather the pursuit of absolute security, which leads to expansionist strategy.

Washington aimed at permanently reducing the power of Germany and Japan. No power could be allowed to control Eurasia, and thereby have the capability to exclude America. The prospect of having to rely on the Western Hemisphere, as a kind of autarkic garrison state, alarmed some in the United States like Chip Bohlen who considered Europe's revival in the late 1940s essential to creating the kind of world in which Americans would like to live. George Kennan, noting the possibility that the United States might become ideologically isolated, thought maintaining confidence in American traditions and institutions would require a "whistling in the dark"--which might not be loud enough to work. The success of authoritarianism overseas could allow regimes to project prestige and cause, as Kennan feared, the United States to become a "lonely country." Given those assumptions, Layne argues, isolationism was unsustainable, both culturally and economically.

Layne challenges Marc Trachtenberg's argument in A Constructed Peace that both changes in occupation policy and the subsequent European political settlement in the late 1940s sprang from Cold War imperatives, instead positing that American strategy revolved around America's open-door, hegemonic strategy. Europe had become "a firetrap" that America did not want rebuilt in the same form. And European integration combined with security guarantees provided a stable, viable alternative. Stabilizing Franco-German relations within a wider European framework was an important step, and Washington tailored its own relationship with Germany to prevent its government from adopting, as Kennan feared, "a resentful and defiant nationalism directed" against the United States.

Apart from deterring Soviet aggression, NATO stabilized Europe internally. Importantly, American security guarantees removed the need for allies to develop greater capabilities of their own, which would put them beyond Washington's control. Political and economic integration within Europe created interdependence, preventing any one country from dominating the region. The system that developed gradually from 1945 to 1960 worked well, and the Soviet collapse presented the opportunity to extend it during the 1990s.

But the potential for overreach now transforms a "benign" hegemony into what Layne calls a peace of illusions. He argues that success obscured the costs of the national security apparatus required to sustain hegemony. The shift of power to an imperial presidency changed political dynamics within the United States, and military spending siphoned investment from other, more profitable economic sectors.

Security guarantees typically require America to take an aggressive stance in maintaining the interests of allies, and minor crises become tests of resolve. Failing a test undermines the guarantee and thereby threatens U.S. hegemony. The alliance system itself, in Layne's view, drives an aggressive foreign policy. Layne echoes an older generation of realists who feared, not unreasonably, that hegemony would fuel a crusading mentality and intolerant spirit, and drive excessive intervention: what can be done, will be done and, indeed, must be done. Paul Kennedy's theory that hegemonic powers fall into a cycle of decline resonates more clearly today than during the 1990s, and looming fiscal overstretch, whatever its causes, raises problems for American domestic and foreign policy.

Layne likens the situation to a treadmill, on which efforts to preserve American predominance erode the economic foundations it rests upon. Some might note, like David Calleo, that control over the principal reserve currency allowed the United States to pay for its empire with other people's money, but can that continue?

Adopting an offshore balancing strategy and abandoning regional hegemonic ambitions beyond the Western Hemisphere provides a way off the treadmill, but Layne takes the prescription a step further. America should withdraw from NATO, he urges, and other longstanding security alliances. While America may already be devolving some responsibility for security to some countries, such as Japan and Korea, the drastic measures Layne proposes would slam a wedge into transatlantic relations while destabilizing other regions. Layne's specific prescription simply produces a different set of challenges in the guise of resolving present difficulties. Indeed, he displays greater talent in identifying problems than offering plausible solutions.

The Iraq War's aftermath has drawn renewed attention to realism, but the term's definition varies. Layne's Peace of Illusions opens with an overview of realist theory that grounds the book within academic political science. Academic realism stresses the centrality of the state for understanding international politics, and it assumes that governments behave as rational actors seeking to maximize state power.

While such assumptions make sense, theorists too often disregard the "real" part of realism and focus excessively on the "ism." Social scientists strive for the precision of physics, but the result typically skips over the complexities of history and culture, driving dogmatic generalizations that depict events through a distorted prism. As a theorist, Layne naturally makes grand strategy prescriptions, but he distorts past and present conditions by viewing them through a theoretical lens. His normative focus causes him to lose sight of the exigencies of events and instead see what the theory predicts.

Layne's discussion of post-1945 developments in Europe offers a case in point. The postwar American (and British) presence in Germany could not have been easily justified without the Cold War, and circumstances, rather than the grand strategy Layne takes as a starting point, shaped policy decisions. America's "empire by invitation", as Geir Lundestaad puts it, worked only because it served the interests of both allies and the United States.

For practitioners and general observers, realism means taking the world as it is rather than as one might wish it to be. The challenge is how to do it. Layne makes an important point in noting the necessity of balancing security liabilities with assets, and that peace built on fiscal-overstretch can only be illusory.

Rather than disengagement, though, the answer lies in leveraging alliances to maintain stability and secure aims. Connecting states through alliances limits the scope for conflict, as Bismarck's 19th century system and post-1945 American internationalism show. Diplomacy can become a force-multiplier in addressing difficulties, but doing so requires knowledge, insight and a deft touch that has been lacking in recent years.

The greater challenge to the international order may lie in the tensions within, rather than between, states, as James suggests. The United States holds a predominance of power not seen since imperial Rome, a development that profoundly changed the international system and underpins post-1989 globalization. Like Rome, however, the American-led global order faces problems created primarily by its own internal dynamics. What James calls the "Roman dilemma" arises from the fact that the way in which peaceful commerce produces a stable, prosperous and integrated global order also creates undercurrents of conflict. A vicious circle thus leads the liberal, commercial world order to subvert and destroy itself.

James warns that the current system's excessive reliance on rules, rather than consensus, threatens its enduring legitimacy. Without legitimacy based on shared assumptions, the costs of economic change spark political backlash. The internal disturbance in a far-flung country can reverberate dramatically, given the new proximities and connections of globalization--as witnessed on September 11. Understanding the problem requires a long view that takes into account historical examples where systems decayed from within.

Internal problems from 1760 to 1825 exposed fault lines within Britain's North Atlantic world, the ancien régime of France and the empire of Habsburg Spain. Reform led to still more pressures and fragmentation. The beginnings of what historians describe as the age of Atlantic revolutions provided the backdrop to Edward Gibbon's Decline and Fall of the Roman Empire and Adam Smith's Wealth of Nations. Both works explored the internal conditions that eroded great accumulations of power, and their appearance in 1776 coincided with the crisis of the American Revolution. Like many authors, Gibbon and Smith wrote with an eye on the headlines of their day, and James discerns in their work an inquiry into the relationship between social order and rules that guides his erudite discussion.

American military supremacy and a global economic order that generates unparalleled prosperity limit the scope for confrontation among great powers. An open break would impose too many costs. Instead, leaders confine themselves to heated rhetoric and "gesture politics", allowing them to grandstand but avert conflict. In earlier periods, such posturing might be the prologue to war, as with the Ems dispatch that produced the Franco-Prussian war in 1870, but they now generate little more than domestic applause. The deeper problem lies in the discontent of those groups that believe themselves victims of economic change.

James explored at length the historical pattern whereby economic dislocation produces efforts to insulate powerful domestic constituencies in The End of Globalization: Lessons from the Great Depression (2000), and here he describes the tensions it creates with greater attention to culture and an eye to current policy concerns. Demands for greater regulation and protectionist measures have created an increasingly dense network of rules that limits flexibility. Post-1945 liberal internationalism was propelled by American efforts and served American interests, but, as John Ikenberry has pointed out, the constraints it has imposed over the past few decades have led Americans to turn away from the system they created. James sees this as part of a much wider pattern that challenges the legitimacy of the current order.

Can the system hold? The United States serves as the linchpin of global economic stability, but budget and trade deficits make its position more precarious than during the immediate post-1945 decades of unchallenged supremacy. Even in the 1960s, Washington aroused Charles de Gaulle's ire by using the dollar's position as a reserve currency to sustain American spending with other people's money.

James considers American dynamism today as contingent on the nation's continued ability to borrow and draw investment. While fiscal problems threaten the sustained growth the United States needs to maintain capital inflows, other countries have also seen their fiscal position deteriorate at the millennium. Greater integration of the global economy increases the potential for shocks to echo through the system. James claims that financial volatility tends to fuel resistance to globalization among those less able to weather the storm.

Just as globalization transmits pressures through the economic system, so the politics of empire can exaggerate the impact of circumstances along the periphery. Unrest in outlying regions, seemingly of little significance, can generate threats to the metropole, as with terrorist attacks. Also, James argues that when great powers select one central focus, others are neglected. Vietnam in the late 1960s and the Iranian hostage crisis are examples. And the current nation-building project in Iraq provides an uncertain basis on which to stake American prestige. Direct intervention can weaken the legitimacy of empire, sparking further challenge and undermining support at home. Political cycles, like economic ones, can be virtuous or vicious, quickly transforming stability-building measures into destabilizing missteps.

Neither James nor Layne provide specific answers to the problems of global order, and James makes no pretense of attempting to do so. Both authors point to the importance of pragmatism. The practice of transforming sound principles into an ideology and then testing it to the breaking point always ends badly. The inevitability of change underlines the need for continuity and the dangers of promoting instability. Force only works in carefully chosen situations. More importantly, policymakers should prevent crises from reaching that critical point demanding intervention.

American policy succeeded remarkably in creating structures to contain or manage conflict after 1945, but little has been done to adapt international organizations or alliances for new circumstances. Neither grand projects nor strategies seem likely to gain sufficient traction, now that the idealistic moment of the 1990s has passed. Instead, it will take careful work along the margins of diplomacy to strengthen institutions sapped by apathy or overreaching.