Shortly after the defeat of Nazi Germany in World War II, Winston Churchill declared that an “Iron Curtain has descended over the continent of Europe”. He was talking about Russia’s, or as it was then called, the Soviet Union, taking of the entirety of Eastern Europe as part of the agreements made between Truman, Churchill and Stalin at the Potsdam conference.
In effect, this was the beginning of the Cold War, a period of animosity between the two world superpowers, America and the Soviet Union. The Cold War never saw a shot fired in anger, but fuelled the arms and space races of that dominated the second half of the 20th Century. It threatened, on several occasions, to bring an end to civilisation through a nuclear apocalypse, most famously in the Cuban Missile Crisis.
The Cold War came to abrupt end in 1991, but not with any peace agreement between the two arch rivals. Instead, the Soviet Union collapsed on Boxing Day 1991.
How was it possible that one of the world’s leading powers, rivalled only by the USA, simply imploded and ceased to exist?
The key figure in this tale is Mikhail Sergeyevich Gorbachev, the leader of the Soviet Union from 1985.
In response to the economic and social situation in the Soviet Union, he introduced two major policies that would inadvertently trigger the demise of his own Presidency, the fall of the Iron Curtain, the dissolution of the Soviet Union and the collapse of the Communist Party in Russia. Safe to say then, he screwed up.
The first of these policies was Glasnost, or openness. This gave the people the freedom of expression, which they had been denied ever since the Communist revolution of 1917. He thought that by granting greater freedoms to the suppressed population, they would work harder, stimulating the slowly declining economy and give greater support to the regime.
Policy number two was Perestroika, or restructuring. Aiming entirely at addressing the economic stagnation, perestroika gave greater freedoms to local ministries in setting the targets for industry to reach, as well as widespread reintroduction of capitalist principles, such as increasing free trade in industry.
Unfortunately for Gorbachev, neither of these policies worked. In fact, they massively backfired. The restructuring initiative did not bring the economic benefits he had predicted it would, while granting more powers to the annexed nations such as Estonia and the Ukraine. The pent up anger of a people who had endured massive suffering at the hands of the State, especially under the Terror of Stalin, was unleashed in the new, free speaking, media, as they turned upon Gorbachev for his failure to improve the economic conditions for the ordinary person.
Although consumer goods did increase in number, the distribution system was so broken that milk rarely got delivered before souring and, though Soviets produced more shoes than anyone else in the world, customers were forced to stand in line time and again to buy several pairs because the sizes were so askew that it was necessary to acquire many pairs to make a fit. Housing meanwhile was atrocious with couples required to wait years before qualifying for a small apartment; the wait for cars also dragged on interminably, and after one finally arrived, it was not unusual for it almost immediately to experience mechanical problems.
The edges of the Soviet Union soon frayed, as the Nationalities, emboldened by receiving greater powers, pushed for complete autonomy, with Estonia, Lithuania and Latvia producing mass organised dissent. With his policy of Glasnost now in place, Gorbachev could not forcibly crush these uprisings, as the media would only criticize him further, but nor could he allow them to flourish, as it would undoubtedly spell the end of the Soviet Union.
And they did. Soon, similar movements developed in Georgia, Ukraine, Moldova, Belarus and the Central Asian republics. This hugely weakened the influence of the central government in Moscow, which essentially lost control of these nations.
Gorbachev, facing savage criticism from the press and the Russian people, unable to control the Nationalist groups and without the support of the military, resigned on Christmas Day 1991. The very next day, by popular demand, the Soviet Union officially ceased to exist. Ukraine, Estonia, Latvia and all the other protesting nations seized their independence.
The Iron Curtain had fallen
But how had the Soviet Union’s economy, which had been transformed under Stalin’s brutal Five Year Plans into a world leader, come to stagnation by the close of the 20th Century? After all, it was the economic climate that drove Gorbachev to his misguided and disastrous reforms.
The answer lies with the Soviet Union’s nemesis, America and one man in particular.
William Casey had intimate access to American President Ronald Reagan and the CIA leadership, as well as having a myriad of connections to banking and big business. Through all of these, he was able to quash cheap loans to the Soviet Union, to clamp down on the export of Western technology the Russians are needed to maintain their crumbling industrial base, to make it tougher for the Soviet Union to complete a huge natural gas pipeline that would provide them with much-needed Western currency.
His biggest success though, was in convincing Saudi Arabia to substantially increase oil production, which drove down the world price of oil. This was of huge benefit to America, a major importer of oil, and of huge cost to the Soviet Union, which relied heavily on exporting oil.
This facilitated Regan’s continuation and intensification of the arms race with the Soviet Union. Of course, the Soviet Union had to respond and upped its own spending on the military to a massive 30% of the economy (although precise numbers are questionable in the Soviet Union). The economy could not handle this magnitude of spending on the military, as it desperately needed investment in other areas; as a Communist economy, all industry was State owned and managed, irrespective of the demands of the population. As the Soviet Union’s capital base eroded over time from wear and tear of the huge demands placed upon it, production fell across the board and the economy stuttered and stagnated as the Soviet Union ushered in Gorbachev's leadership.
And this is when Gorbachev instigated his doomed policies of Glasnost and Perestroika, before the Nationalist groups pressed for independence, to which Gorbachev was forced to cave, resulting in the fall of the Iron Curtain.