* Key caveat here is that I have not read it lately and don't have the time to re-read it right now. So I hope I am remembering things right.The fundamental idea is: "the power to hurt is the power to bargain." With the advent of air power, countries could punish each other without having to win a conventional war on the ground. This facilitates coercive diplomacy--the threat or use of force to persuade the other side to do what you want them to do. This is, of course, very relevant right now as the U.S. has been attempting to engage in coercive diplomacy with Assad's regime in Syria. The red line stuff really fit the stuff that Schelling talks about--raising the stakes, making clear commitments, and so on. But deterrence did not work. Oops.
This is not the first time that coercive diplomacy has not worked out as intended. Indeed, in the 1970s and 1980s, there was a heap of literature on deterrence failure (George and Smoke, a special issue of World Politics, and on and on). Vietnam could be seen as the first failure of coercive diplomacy as the graduated escalation was supposed to persuade the North Vietnamese to back down. In more recent times, the 1991 war with Iraq was a failure in the sense that force had to be used to evict Saddam Hussein's forces from Kuwait, when he should have retreated once the U.S. had 500k troops on the ground. 2003? Not so much, as the US had no intention of bargaining with Hussein. Libya? Not really an attempt to bargain, as the use of force was aimed to stop his forces and then give the rebels enough support to overthrow him. But these days, with Syria, it is very much coercive diplomacy.
And it does not seem to be working out that well. It could be that the U.S. and Obama in particular are just lousy at this game. That the U.S. has signaled a lack of resolve repeatedly, just as Clinton did over Kosovo, refusing to use ground forces. Going to Congress is the kind of bridge burning tactic that Schelling would recommend, but it only works if Congress says yes. Which is not looking likely right now. There is a lot of talk about audience costs--that politicians who make commitments in front of attentive audiences are more likely to be convincing. So, Obama's move can make sense in this light.
But here is the big problem in all of this: perhaps much of IR is not about bargaining and persuasion about commitment and resolve. Perhaps much of IR is a conflict of interests, and that countries engage in conflict when their various interests cannot be resolved. Assad is, apparently, using whatever means at his disposal to stay in power. He is not really paying that much attention, perhaps, to what the U.S. is signaling, as the primary threat to his position remains within his borders. Unless the U.S. invades, there is not much we can do to the tip scales, so Assad's motivations/calculations are not focused on whether Obama tosses the steering wheel out of the car or ties himself to the tractor (see below).
The amateur game theorist might want to argue that this then is not chicken or prisoner's dilemma but deadlock. And they would probably be right--that much of what is important in IR is what shapes the preferences of the actors, which determines the game being played. I guess my main point is that much of the time, we are not playing chicken, so perhaps Schelling's insights might not be all that useful and could even be counter-productive.
[Update: in conversation with Phil Arena, we came a consensus on a key point--Schelling does suggest that this stuff is not easy, but he still underestimates how hard it is to engage in coercive diplomacy, especially if domestic politics in both relevant countries is more than just counting audience costs. To be clear, Phil does not agree with everything I said here--just that one point.]
The really important question remaining is this: if Schelling's stuff is not so applicable, does that mean that this scene is not useful in Intro to IR
Note: this version starts a bit later than the scene I used in class which starts with a conversation about too much weed being smoked. My point, being a good Schelling-ite, was that the problem was not the pot smoking but the failure to signal to the opponent that one was pot-smoking.