This paper proposes a model for understanding differing foreign policy preferences of different foreign policy factions within a state as a consequence of different internalization of past foreign policy lessons; specifically it seeks to investigate if such differences can help us better understand the processes of foreign policy change with regards to the alliance policies of smaller West European states to and from what we might call “balancing” foreign policy behavior. It seeks to use Stephen Walt’s classical balance of threat theory as a jumping board for developing a new theory about threat that unpacks the concept of “perceptions” and incorporates it into realism in a neoclassical realist framework while factoring in the relative bargaining situation of domestic factions with differing perceptual lessons. It suggests that when uncertainty about threat level is high, the “lessons” that each actor or group draws from the past play an indispensable role in helping them making sense of the world, and sometimes lead them to radically different conclusions. The explanatory power of the model is tested for the case of the Danish NATO decision of 1949 – arguably the most significant shift in Danish foreign policy of the 20th century.