If Christianity had a mission in the 19th century, it was to restrain the leviathan of the nation state. This book tells the story of its failure. Across Europe, churches were expropriated, corrupted and exploited by more powerful civic structures, and ended the century weaker and smaller than they began it. The stage was set for the horrors of the next hundred years, the godless age par excellence.

Michael Burleigh has another, more complex story to tell. What the churches had to combat between 1789 and 1918 was not just unbelief, but something more insidious, designated here as "political" or "secular" religion. All the great ideologies of the modern world - republicanism, nationalism, socialism - first made their appearance in the guise of religious or quasi-religious cults. Their adherents fabricated rituals, devised catechisms and proclaimed creeds. Their rhetoric was one of martyrdom and redemption, election and damnation. "Thou shall not fornicate," ran the sixth Italian "patriotic" commandment, "unless it be to harm the enemies of Italy." The religious impulse was not quashed, but deflected on to more worldly objects.

The Bible has a language for all this. The prophets rail incessantly at those unfaithful Israelites who bend the knee before Moloch and Baal; Christ proclaims a kingdom "not of this world". A few astute thinkers recognised in the biblical prohi-bition of idolatry an indictment of modern nationalism, with its apotheosis of worldly power, its fusion of God and Caesar. Yet the churches as institutions remained supine in the face of this visibly pagan trend. Earthly Powers explains why.

The Catholic Church, to which Burleigh is clearly partial, was best placed to combat the new religion of nationalism. It was, after all, a supranational corporation, a successor to the Roman empire, laying claim to a universal and timeless truth. Despite their reputation as grim reactionaries, the 19th-century popes had a better appreciation of the moral limits of state power than most liberals. Article 39 of Pius IX's much-derided 1864 Syllabus of Errors denounces the doctrine that "the State, as being the origin and source of all rights, is endowed with a certain right not circumscribed by any limits". His successor, Leo XIII, spoke presciently of the "idolatry of the State". During the First World War, the Vatican remained scrupulously neutral, striving where it could to hasten the end of what it regarded as "the collective suicide of a great Christian civilisation".

Yet the upshot of these endeavours was precisely nil. The problem was not that the pope had no battalions, but that he had lost the most important weapon in his spiritual armoury: the fear of hellfire. Emperors such as Napoleon were not about to go down on their knees in penitential dread. The Church was thus forced to rely for protection upon rulers whose concerns were purely worldly, and who regarded religion as no more than an instrument for the maintenance of power and wealth. Its moral authority suffered severely. "I am saddened and disturbed more than I ever have been before," wrote Alexis de Tocqueville during the reign of Napoleon III, "when I see in so many Catholics this aspiration towards tyranny, this attraction to servitude, this love of force, of the police, of censure, of the gallows." Only recently, largely because of Pope John Paul II's far-sighted denunciation of both Soviet and American lawlessness, has the Catholic Church regained something of its moral independence.

The fate of the Protestant churches was, if anything, still more pitiful. Lacking the cosmopolitan scope of their Catholic counterpart, they did not even aspire to impartiality in inter-national affairs, but surrendered gleefully to the prejudices of the tribe. "This is a Holy War," preached the Bishop of London in 1914. "We are on the side of Christianity against the anti-Christ." Kaiser Wilhelm went one further. "Remember that the German people are the chosen of God," he said in a speech to his troops. "On me, on me as German emperor, the Spirit of God has descended. I am His weapon, His sword and His visor." Reading this and other pronouncements, one understands the ease with which so many Lutheran clergymen embraced the tenets of National Socialism.

There was yet another reason why Protestantism was more prone to nationalist corruption than Catholicism. Whereas the Church of Rome preserved a rigid structure of dogma, early 19th-century Protestantism was very much a "religion of the heart". The quivering fervour of Pietism and Methodism set the tone; the German theologian Friedrich David Schleiermacher was typical in defining religion as "a sense and taste for the infinite". Such a fluid faith could easily spill its doctrinal mould and flow into more politically amenable channels. By the time of the First World War, there were few left to protest what the Swiss theologian Karl Barth called the "hopeless muddle" of "love of country, lust for war and Christian faith".

In the field of social and economic policy, the churches did rather better. Burleigh gives short shrift to the old Marxist lie that religion is nothing but the spiritual arm of the bourgeoisie. True, there were many who, like Voltaire, wished their servants and wives to believe in God so that they might find themselves less often robbed and cuckolded, but the churches had little faith in such devotees. "The bourgeoisie," wrote one French priest, "will help us as a counterweight to doctrines that it fears, and as a kind of spiritual police . . . But that is the limit of its esteem and confidence in us." As the century wore on, believers - and here again, the Catholic Church stands out - became increasingly outspoken in their condemnation of free-market capitalism. Pope Leo XIII's 1891 encyclical Rerum novarum inveighs against "the hard-heartedness of employers and the greed of unchecked competition". Yet it is equally critical of the "pleasant dreams" of socialism, which would in reality mean "the levelling down of all to a like condition of misery and degradation". Leo's vision is ethical and corporatist rather than mechanical and statist; it looks forwards to a society spontaneously organised into charitable, co-operative and trade associations. Only thus, it argues, can social justice be reconciled with individual freedom.

For all its subtlety and depth, however, Catholic social philosophy did not fare well in the 20th century. Christian trade unions lost the struggle with their more militant socialist rivals, while the growth of the welfare state progressively reduced the scope for spontaneous co-operation. The con-sequences are still with us. Modern British social services are constitutionally incapable of using moral language, dressing everything up in the obfuscating jargon of "problems" and "needs", to which ingenious new "solutions" are forever being proposed. Burleigh uncovers a far more sophisticated tradition of thinking about such questions - one that modern politicians would do well to consider.

Earthly Powers is a superb book. Its conception is profound, its execution brilliant. Burleigh is not only formidably learned, he has the true historian's ability to marshal his knowledge to maximum effect. One has the impression of a mind entirely at home in the past 200 years of European history, moving from fact to fact in free, reflective play. Burleigh is also not embarrassed to reveal his quirks and prejudices. He is always on the defensive when it comes to the Catholic Church, and takes every opportunity to vent his hatred of leftist academics and modern mass culture. Matthew Arnold "perhaps underestimated a future in which the consumers of culture would gawp at their Piero della Francescas, with headphones and captions filling in the great void in what passes for education". These vituperative swipes will no doubt annoy some readers, but I found them an entertaining contrast to the bland neutrality of most academic prose.

Inevitably in a book of this scope, there are patches of rough ground. The best writing is on Germany, Burleigh's speciality. France and England are also well covered. The chapter on Russia is thin and perfunctory, however, consisting of little more than a summary of a few Dostoevsky novels and a potted history of populism. Burleigh has missed a trick here, because his theme of socialism as a secular religion has its origins in Russia. Thinkers such as Nikolai Berdyaev, Sergei Bulgakov and Semyon Frank were among the first to discern in the revolutionary intelligentsia an idolatrous corruption of faith, and they responded with a distinctly religious version of liberalism. But perhaps Burleigh will do them justice in the sequel to this volume, which I eagerly await.