Although the domino theory is associated above all else with the Vietnam War, its use as a conceptual tool in American foreign policy stretches back as least as far as World War I. As its most consummate historian has explained, the domino theory was in fact the invention of Woodrow Wilson, not the architects of America's intervention in southeast Asian jungles. From our standpoint at the end of the American century it may be hard to immediately grasp the totalizing scale of the domino theory and its reach into all areas of America's foreign relations, but its key tenets remain with us; all that stands in the way of its resurrection is the absence of a threat large enough to justify its invocation, a role China may yet fill.
The basic idea of the domino theory is that America as a liberal democracy cannot survive in a world that is not itself liberal and democratic, and that the defeat of countries that have this quality will have inevitable knock-on effects for others. Democracies, far from being always prone to peace, have often been the most bellicose of countries because they constantly imagine themselves threatened by undemocratic regimes and feel the need to spread their creed abroad - witness the wars of revolutionary France or classical Athens.
At the start of the twentieth century the U.S. was in a unique position in the world because two great oceans separated it from the autocracies on the European continent, but Americans would soon discover that they did not provide insulation enough. When the U.S. realized it could not stay unaffected by the actions of distant illiberal regimes, the tradition of American interventionism outside of the western hemisphere was born.
The world wars
The domino theory became the organizing principle for much of this intervention and U.S. foreign policy in the twentieth century. President Woodrow Wilson realized that in a globalized world in which an increasing amount of trade and people crossed borders, the U.S. could not help but be affected by, for instance, the outcome of World War I. At first declaring his neutrality, Wilson later came around to the idea that the illiberal nature of the Germans and Austro-Hungarians meant the U.S. could not possibly stay neutral in the face of their victory, as they intended to spread illiberal institutions throughout Europe and the world.
The conquest of Europe by autocracies would starve the U.S. of its natural allies; imperil trade and free intercourse between peoples, which was held to be an important foundation of peace as it bred mutual dependency; and could necessitate the militarization of the U.S. in the face of an external threat. To use a trite phrase, the American way of life would be threatened.
The old conception of European security had been based on the balance of power, the idea that states would form shifting alliances based on their strength and engage in limited wars that would never be catastrophic because the overall balance of forces would prevent overall victory by any one side. What World War I demonstrated was that war could never again be a rational tool of policy, as it had become so fearsome and could never reach a decision; the balance of power could be no more. The U.S. had always considered itself morally superior to the balance of power system, and had avoided intervention in Europe so that it would be corrupted by the ways of the Old World; when this intervention did come in World War I, it hence came attached with the proviso that the peace would be built on new principles.
The domino theory was supposed to preserve America's liberal institutions by making sure that the rest of the world respected them and operated on similar lines. Common sense at the time held that if men were ruled over by democracies and could engage in peaceful trade with one another, they could enjoy economic progress and happiness without experiencing the darker side of technology which found its expression in the Great War. This was the basis of Wilson's plan for a League of Nations that would consist of responsible states that would protect one another and counter any armed aggression. This would, it was thought, severely discourage the aggressor; stopped at the first domino, he would be unable to continue to the next.
As is well known, the League of Nations failed the test of U.S. public opinion, which was not yet ready for such a conceptual leap. Wilson's ideas died a death, only to be resurrected following World War II. This war and the series of crises that led up to it - instances where armed aggression by Italy, Germany and Japan was appeased and ignored - provided the real evidentiary basis for the domino theory. During World War II dominoes toppled quickly and frightfully, and the U.S. was eventually forced to intervene in its bloodiest conflict ever. It was clear that a Japan ascendant in the Asia-Pacific and a Germany ascendant in Europe would have led to the death of American institutions, as the country would have had to be transformed into an armed camp to resist fascist aggression.
The Cold War
Then came the Cold War. By this time American policymakers already had the domino theory well and truly internalized, ready to be deployed wherever it was needed - Greece, Turkey, Korea, Vietnam; it "went where it was sent by its Uncle Sam." U.S. policymakers worried that the Soviet Union would engage in a campaign of global aggression to roll back democracy and capitalism, and every state's defence came to be seen as vital. Not only would the loss of any particular country to communism imperil its neighbours, but it would also provide notice around the world that communism was on the march and capitalism on the retreat; the extension of the reach of communist forces would eventually imperil the very safety of the United States.
Such a dire situation was never realized, and the dominoes that the U.S. ended up fighting to defend where on the strategic periphery, much more important for their symbolic status than their practical value. The most famous became, of course, Vietnam. It was argued that the loss of South Vietnam to communism would endanger Thailand, Indonesia, the Philippines, South Korea and, most crucially of all, Japan. Had South Vietnam been overrun by the North in the early 1960s, there is no telling whether this would have happened; it was certainly significantly more likely than by 1975, the final date of Vietnam's unification, by which time the global communist movement had experienced a painful rift between the USSR and China.
The domino theory failed to be realized after the Vietnam War, as instead the communist countries of southeast Asia set about internecine conflicts that consumed their energies. Because the global communist movement was never as unified or single-minded as Hitler had been, dominoes were not under threat; the energy of the initial pieces to fall was too unfocused to follow such a deliberate plan. The onset of the process of detente - the easing of tension between the superpowers - that began under Richard Nixon further robbed the theory of its importance. The idea that America could not survive except in a benign and liberal international environment was not disproved; what disappeared was the imminent danger that this danger would actually be realized.
After the Cold War, a domino theory in reverse briefly took hold. Theorists like Francis Fukuyama predicted the imminent demise of non-democratic forms of government as they were starved of the support previously granted them by the Soviet Union. This idea never abandoned the central conception that the U.S. needed a liberal world environment in which to thrive, but merely reversed the trend; the victorious democracies were now in the ascendancy. Of course, this proved rather optimistic, as it turned out that often the alternative to autocracy was not democracy, but anarchy, and that autocracy itself could be resistant.
The domino theory hence slumbers, awaiting again the appearance of what is perceived to be a centrally-directed threat to liberal institutions around the globe. If such a threat emerges, the United States will again find itself faced with no choice but to invoke it; for the idea that freedom is indivisible is burned deep into the national psyche. Its misapplications aside, the domino theory underpins the system of international trade and international institutions that the U.S. established to promote and protect liberal countries - however fitful co-operation with these institutions may have been under the present administration, their being made to work is vital to the continued survival of the United States as a free country. The domino theory's successful application during the world wars means that it is ensured a long future even as the associations with the war in Vietnam warn against its misuse.
Two books by Frank Ninkovich are essential reading on the domino theory. See Power and Modernity: A History of the Domino Theory in the Twentieth Century and his The Wilsonian Century: American Foreign Policy Since 1900.