As the story begins, a group of Americans - including Colonel Bryan Kelly, his wife Margaret Kelly, his ten year old twin sons (Jerry and Paul), a transport pilot lieutenant and a copilot, a tall T-4, and nine other enlisted soldiers - have been captured by the communist guerilla chief Pi Ying. Colonel Kelly and his family had been on their way to India, where he had been assigned, but the plane had to crash-land in China, after which the party was marched to the decaying palace where they are now being held as prisoners below ground.
Colonel Kelly enters their chamber, having just been told what Pi Ying expects of them. It is difficult for him to explain that, instead of simply shooting them, Pi Ying will force Kelly to play him (Pi Ying) in chess for their lives. Worse, Kelly will play using his fellow prisoners as human chess pieces. Each prisoner will stand as a chess piece on a giant board, and move according to Kelly's commands.
In the game itself, the Russian military observer Major Barzov sits with Pi Ying and a young Chinese girl. Barzov insists he is there as a diplomat, and has no military authority. After limply lamenting that he can offer no help, Barzov leaves them alone on the huge chessboard. Kelly notices that Pi Ying seems eager to please Major Barzov, who in contrast seems dismissive of the guerilla chief.
Before the game begins, Pi Ying instructs the prisoners that they must do what Colonel Kelly tells them to do, and that they will be killed quickly and mercifully if captured by his chessmen. If they attempt to flee or disobey, however, they will suffer a worse fate. If Kelly wins, those who survive will be freed; otherwise, it is implied they will all be killed. (Pi Ying's chessmen are not actual humans, but are rather life-sized pieced manipulated by his guards.)
Margaret implores Pi Ying to spare her children, but he angrily dismisses her. The young corporal protests against the sergeant, who is holding him in place while encouraging him to relax. The sergeant volunteers bravely to serve as the king's pawn to Kelly (who stands in the king's place), and the colonel begrudgingly accepts his place as another important pawn next to the sergeant. When Kelly names the pilot lieutenant as a bishop, he tells a joke that pleases Pi Ying.
Soon, all the prisoners have taken their places. At Major Barzov's prompting, Pi Ying tells them two more rules: each move must be completed within ten minutes, and no move can be taken back.
They begin to play. Kelly puts the sergeant in a compromised position, hoping that Pi Ying will play good chess instead of killing someone at the first temptation. But at Major Barzov's instruction, Pi Ying goes against his first instinct and takes the pawn. The sergeant is then dragged off the board to be killed. Kelly screams out and tries to take the man's place, but is forced to stay still. After hearing a gunshot from a back room, a shaken Kelly instructs the corporal to move to a new space. Though he balks and knocks down two of Pi Ying's guards in the process, the corporal complies.
During the first hour, Kelly plays defensively to protect his fellow prisoners, even though that strategy annoys Pi Ying and Major Barzov. By the end of the hour, Margaret has lapsed into shock, four of the prisoners have been killed, and the others are terrified. Kelly notices a way to win if Pi Ying will move his knight, but forcing that move will require Kelly to make a terrible sacrifice: his own son, Jerry. The prospect is awful, but he is in a military mindset, wherein he has to judge his people as resources, not as individuals.
He offers Jerry as bait, which surprises Pi Ying, and pleases Major Barzov. Kelly feigns horror at what he pretends was a mistake, and begs for the chance to take the move back. But Pi Ying falls for the trick, and tells Margaret that her husband has accidentally condemned her son to death. She falls over, screaming hysterically at Kelly. The young Chinese girl also reacts dramatically, begging Pi Ying to spare Jerry's life. The tall T-4 attacks a guard, but is beaten down and brought back to his square.
Before Pi Ying can capture Jerry, however, the young Chinese girl stabs him and then herself. Annoyed, Major Barzov orders their bodies to be removed, and Kelly realizes that the Russian has been in control the entire time. After instructing them to remain in place, Barzov leaves.
While he is gone, the prisoners speak freely with each other, resting. Realizing that everyone still believes Kelly's intended sacrifice was a mistake, he chooses not to correct them, since Margaret would never forgive him in that case. At some point, he dozes off.
Kelly awakens to the sound of Major Barzov's voice; the game is resuming. Barzov offers to let Kelly take the move back, but Kelly refuses. Intrigued, Barzov resolves to let Jerry stay alive and with his mother until the game is over.
They continue to play. Confident, Kelly keeps Major Barzov in check and eventually wins. Barzov is furious at having lost, blaming Pi Ying's earlier mistakes. However, he decides to let Jerry live, and mercifully announces that he will let them go free. He adds that, since there is no official state of war between their countries, he always intended to do this anyway.
"All the King's Horses" is an allegory for the Cold War that took place between the United States and Russia during the years after WWII. Though no official war was ever declared, the United States engaged in animosities all over the world, marked by paranoia, secret campaigns, and shifting alliances. And yet Vonnegut seems to suggest that this war produced serious casualties despite being 'cold.' Before the chess game begins, Pi Ying makes the analogy between the chess game and war itself: "As Colonel Kelly can tell you, a chess game can very rarely be won - any more than a battle can be won - without sacrifices" (95). Though he is probably insane, Pi Ying is aptly indicating the American hypocrisy, the inability to understand the impact of their military action until it affects them personally.
Cold War paranoia certainly infuses this story. The United States during these decades engaged in many military situations under the (sometimes mistaken) pretense that the Russians were spreading Communism there. The fact that Barzov initially seems harmless, but eventually reveals himself the true mastermind behind the Chinese ploy, conforms to what many might have believed of Communists at the time.
Further, the absurdity of the Cold War is illustrated through the vicious and exaggerated game. It is significant that no one other than Kelly, Pi Ying, and Major Barzov understands the rules of chess - not even the sergeant or the pilot lieutenant. This drives home the point that those victimized by war are not in control of their own fates, nor do they even understand why they and their loved ones are suffering. Those in control stage elaborate games that require pawns to sacrifice themselves, and rarely do those pawns get such an up-close view of that hypocrisy and unfairness.
The tension between the realms of humanity and machines is another important theme in "All the King's Horses," especially as it relates to war. And yet unlike in many of the other stories, this conflict takes place entirely within a human here. In particular, Colonel Kelly wages an inner war between the mechanical realism of war and his emotional duty to his family. Vonnegut suggests that war requires a detachment from humanity, the ability to see people's lives as part of a game or a machine. Kelly understands that the "eerie calm - an old wartime friend - that left only the cold machinery of his wits and sense alive" is "the essence of war" that allows him to do his job effectively (95). When Kelly sacrifices his son Jerry, he understands his decision "only as a man who knew the definition of tragedy, not as one who felt it" (102). Vonnegut presents this as the truly terrible aspect of war: the necessity for men to become machines.
Like a good soldier, Kelly is able to remain clear-headedly mechanical in the face of human tragedy. On the other hand, his wife's reaction is solely emotional. Margaret falls into shock over the course of the game, and responds to his sacrifice of Jerry with unbridled fury. Certainly, the contrast explores the novel's thematic conflict. Less impressively, though, it simply reflects stereotypical gender norms, in which men are understood as being more balanced and deliberate, while women are more vulnerable in the face of emotional stress.
The young Chinese girl also conforms to the traditional role of a woman; she is described as "delicate" as she sits silently by Pi Ying's side (94). Kelly sees her as "ornamental," even (94). Further, when she realizes that Kelly has sacrificed his son, she demonstrates the stereotypical emotional weakness of a woman, going into a "tearful frenzy" in defense of a child's life (104). Even her act of power, killing Pi Ying and then herself, is born from untamed emotion. Vonnegut's implicit support of emotion over mechanical detachment is somewhat undercut by the gender issues.
Vonnegut employs subtle foreshadowing throughout this story, through the use of figurative language. Before we learn of Pi Ying's chess game plan, Kelly tells the young corporal, "The little man upstairs has all the trumps," and thinks to himself that he has just used a term from "another game" (92). Soon after, the reader learns along with the other prisoners about the human chess game. As Kelly makes the decision to sacrifice his own son in order to win the chess game, "necessity" is personified as "a child counting eeny, meeny, miney, moe around a circle," landing on the ten-year-old boy (102). The game like quality that humans are capable of employing is explored not only in the story, but also in Vonnegut's language.
There is a real sense of irony in the situation between the American prisoners, the Russian Major Barzov, and the Chinese guerilla chief Pi Ying. Pi Ying clearly resents Americans for their military actions, asking Margaret, "Is it for the love of God that Americans make bombs and jet planes and tanks?" (96). But it is Major Barzov who actually matches Kelly's calculations. In fact, Kelly even calls Barzov's decision to let them leave an act of merciful "chivalry" (109). In contrast to Pi Ying's giddy impulses, the American and the Russian see themselves as civilized, adhering to certain rules of war that apply on the chessboard as well as in real battles. However, this cold, calculating quality makes them immune to the human emotion that plague Margaret and the young Chinese girl - thus, Pi Ying and the world he represents are feminized in contrast to the masculinity of the United States and Russia. While Vonnegut clearly despises the warlike impulses that are mocked in the story, his portrayal of the Chinese and women (those who show emotion) makes the point murkier and less precise.