Cheap oil killed the Soviet Union, not Reagan

I was just reminded of how conservatives like to claim that Ronald Reagan’s vast expansion of the US military budget and general “toughness” caused the collapse of the Soviet Union under his successor George HW Bush in 1991.

This is just not true.

Obviously it is impossible to attribute any turn so large and consequential to any single cause. It was complex and contingent on historical particulars. But every informed analysis I have seen points to an overwhelming proximate cause.

The Soviets long had been unable to produce enough grain to feed their people. For decades, they had made up the difference by buying grain on the world market. They raised the foreign currency necessary to buy grain by selling oil. The price of oil fell sharply over the 1980s. Flat broke, the Soviet state simply could no longer function.

I have a breakdown of the mechanics from Russian Yegor Gaidar, published by the center-right American Enterprise Institute in 2007:

[In 1985] the Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms.

As a result, the Soviet Union lost approximately ^$20 billion per year, money without which the country simply could not survive.

[⋯]

The only option left for the Soviet elites was to begin immediate negotiations about the conditions of surrender. Gorbachev did not have to inform President George H. W. Bush at the Malta Summit in 1989 that the threat of force to support the communist regimes in Eastern Europe would not be employed. This was already evident at the time. Six weeks after the talks, no communist regime in Eastern Europe remained.

[⋯]

What were Gorbachev’s options at the time? He could not easily dissolve the Soviet empire; the conservative elements inside the Soviet leadership were strongly against this notion. Yet he could not prevent the dissolution of the empire without a massive use of force. But if force was employed, the Soviet state would not get the necessary funds from the West, without which Gorbachev had no chance of staying in power.

[⋯]

Even if they found one division able to crush all the people who demonstrated against the GKChP [the movement attempting a coup against Gorbachev in 1991], would the grain appear? Where would they find the food necessary to feed the larger cities? Would the West rapidly give the ^$100 billion? Their case, like the Soviet state itself, was entirely lost.

On August 22, 1991, the story of the Soviet Union came to an end. A state that does not control its borders or military forces and has no revenue simply cannot exist. The document which effectively concluded the history of the Soviet Union was a letter from the Vneshekonombank in November 1991 to the Soviet leadership, informing them that the Soviet state had not a cent in its coffers.

Any telling of the Soviet collapse which does not rest on their need for grain and the price of oil is nonsense.

Indeed, there is a strong argument that Reagan’s hard line on military confrontation did not force the Soviets’ hand economically, but did make it harder for Gorbechev to unwind the Soviet Union when the time came. Richard Ned Lebow & Janice Gross Stein wrote in The Atlantic back in 1994, informed by talking directly to Gorbechev:

⋯ Neither the strong nor the weak version of the proposition that American defense spending bankrupted the Soviet economy and forced an end to the Cold War is sustained by the evidence.

The Soviet Union’s defense spending did not rise or fall in response to American military expenditures.

[⋯]

Reagan’s commitment to SDI [the Strategic Defense Initiative attempting to create defenses against nuclear missiles] made it more difficult for Gorbachev to persuade his officials that arms control was in the Soviet interest. Conservatives, some of the military leadership, and spokesmen for defense-related industries insisted that SDI was proof of America’s hostile intentions. In a contentious politburo meeting called to discuss arms control, Soviet armed forces chief of staff Marshal Sergei Akhromeyev angrily warned that the Soviet people would not tolerate any weakening of Soviet defenses, according to Oleg Grinevsky, now Russia’s ambassador to Sweden. [Soviet ambassador to Canada] Yakovlev insists that “Star Wars was exploited by hardliners to complicate Gorbachev's attempt to end the Cold War.”

One might credit Reagan indirectly for getting the US cozy with the Saudis. And I do give Reagan credit, sort of, in the sense that as the Vulcan proverb teaches, only Reagan could have allowed Gorbechev to attempt a soft landing for the shattered Soviet empire without suffering criticism in US politics for being “soft” on the Russians late in the process.

But Reagan boosters do not want to tell those stories, they want to talk about Reagan being “tough”. He was not. And “toughness” had nothing to do with Soviet collapse.