Trading Power is an impressive book that should be read by everyone interested in the history of US-German relations. In particular, it is very helpful for setting the current tensions within the transatlantic alliance into their proper historical context. Based on extensive and meticulous archival research in both Germany and the United States, including in the Johnson and Ford presidential libraries, Gray has produced a comprehensive political and economic history of the West German Republic from the end of the Adenauer to the late 1970s. Trading Power is not simply a narrative, however; within its chronologically arranged chapters, Gray steadily advances the argument that West German financial, business, and political elites carved out a distinctly West German manner of influencing affairs beyond its border, not just in Europe, but in the world. Along the way, he succeeds in restoring dynamism and uncertainty into a messy and fraught process that is too often, he argues, lost in overly simplistic narratives of West Germany quietly finding its place as a docile and staid member of NATO and other postwar institutions. (It is startling, for example, to find voices seriously discussing the merits of deploying German troops to Vietnam in the 1960s.) And, as he suggests in the conclusion of his book, this is of course not a process that can ever be definitively completed; new times will generate new challenges and new responses, as is occurring today.

Gray begins with the end of Konrad Adenauer’s fourteen-year tenure as Chancellor. Adenauer had brought with him a clear set of political commitments, particularly to anchoring West Germany within NATO. But Gray argues that as the immediate trauma of the war began to fade, West German elites began to consider other ways their country could assume a role in the international society of states. A defining moment arrived in the form of Chancellor Ludwig Erhard’s second inaugural speech, delivered on November 10, 1965. “The respect and recognition bestowed upon us in the world,” the Chancellor said, derived in large part from its “amazingly successful and rapid reconstruction,” the economic benefits of which were translating into “political strength” for West Germany. At the same time, the Chancellor argued that the greatest economic good that Germany could cultivate, both for its own domestic interests as well as for its “political strength” abroad, was stability (meaning, among other things, scrupulously avoiding policies that might lead to inflation) (98). Gray terms this the “stability imperative,” and argues that the attempt to translate it into wider political Influence became the distinctive and definitive aim of West German foreign and economic policy. Beginning with Erhard’s second term, a host of policymakers and institutions, including elites in the finance and banking industries (which, in a wonderfully evocative phrase, Gray terms a “stability infrastructure”), was turned to the task of realizing it in the world (100).

Yet, as Gray shows, right from this outset, stability proved difficult to maintain once it was subjected to the competing demands of governance, and there were major limits to just what sort of power it could translate into. Budget difficulties led the Erhard government to cut defense spending, in particular the payments West Germany was required to make to the United States and the United Kingdom to pay for the costs of serving as its de facto military force (so-called “offset payments”). This led to a political crisis in West Germany that was both foreign and domestic. The United States was outraged by West Germany’s rather brazen indifference to the required offset payments, and “Erhard’s ministers,” Gray tells us, “fully expected the United States to pull back large numbers of troops from Germany” (127). Meanwhile, some members of the most important German political parties, including the CDU, began to encourage improved relations with the Soviets, and even with East Germany, as an alternative to spending on defense. This multi-faceted political and economic crisis ultimately cost Erhard his chancellorship—one sort of instability incurred in pursuit of another.

This highlights a key theme in Trading Power, as it winds its way through the sixties and seventies and the attendant political and economic crises and responses, but it is one that Gray does not seem to wish to treat thematically: the difficulties caused by West Germany’s abandonment of military power and its dependence on NATO. This is to some degree a result of how Gray views the nature of international relations. He rightly eschews the cruder, more mechanistic views of the so-called “realist” theories of International Relations. He draws instead on “constructivist” models, arguing that they are a more powerful analytical tool for discovering the sometimes-subtle ways in which the “soft power” of culture, or the lure of a stable currency. And he is right—to a degree. He highlights, for example, the way that the SPD and Bundesbank’s decision at the end of the 1960s to let “the D-mark rise in value,” despite the potential economic and political risks, led the D-mark to play “a crucial role in realigning the world’s major currencies, above all the ailing US Dollar” (465). But Gray’s investment in the argument that West Germany pursued a unique and independent role in the world, in which economic power translated readily into political power, requires him to subscribe too wholeheartedly to the constructivist view. Gray writes at the end of this book that by the mid-1970s, West Germany inhabited a “Europe where economic prowess weighed more heavily than military status” (469), and that this “was a world well-suited to West German interests” (469). But he has here absorbed the worldview of his sources. No such Europe, or world, ever existed. The budgetary decisions and trade policies pursued by West Germany were enabled not only by their membership in NATO, but also—crucially—by the (always strained) willingness of their allies to tolerate the lack of seriousness with which West Germany treated their obligations to the alliance.

All those following the current tensions between the United States and NATO should read this book. Even during those times when the alliance’s solidarity looks, in retrospect, to have been most unassailable, it was in fact riven with tensions. Whether this should be a cause of optimism or despair is difficult to say.