On March 8, 1983, at the annual meeting of the National Association of Evangelicals, President Ronald Reagan spoke of the Soviet Union as an “evil empire.” What was his strategy? Convinced that socialism would lose any head to head competition with capitalism, he chose to take an aggressive approach to Soviet communism and one essential component of his strategy was to strengthen the American military and economy.
Reagan rejected the Russian economic success stories peddled by Democratic intellectuals. In 1982, Democratic historian Arthur Schlesinger praised the Russian economy. On his recent trip to Moscow, he claimed to have “found more goods in the shops, more food in the markets, more cars on the street – more of almost everything, except, for some reason, caviar.” As late as 1984, Democratic economist John Kenneth Galbraith declared: “the Russian system succeeds because, in contrast to the Western industrial economies, it makes full use of its manpower.”
A best seller and the most influential economics textbook in the United States since World War II was Paul Samuelson’s Economics which included a graph plotting the economic growth of both the United States and the Soviet Union. The American output was above the Soviets, but its predicted growth was slower than the Soviets. In each successive edition over the years, the graph forecast that the Soviets would overtake American economic growth approximately twenty years in the future.
By the 11th edition of Economics (1980), the bogus graph still showed quicker Soviet economic growth compared to the United States. However, because the Russians truthfully were no closer to overtaking the Americans, Samuelson advanced the date of intersection. This nonsense lasted a few more years. It was not until the 1985 edition of Economics did he eliminate the graph.
There were ample statistics available to prove the inefficiency of the Soviet system. In the 1970s, approximately 34 million people of the Soviet Union’s population of 250 million produced the nation’s food whereas only 4.3 million of America’s 220 million were in food production. Another difference was that the Soviet Union did not produce enough food for its own people while the United States produced a surplus for export equal to 25 percent of total Soviet production.
Reagan believed that he could speed up the inevitable self-destruction of communist economies and, thus, win the Cold War. In the 1970s, American defense spending fell by over 20 percent (adjusted for inflation). Reagan’s new approach saw the Pentagon’s yearly budget almost double from $158 billion in 1981 to $304 billion in 1989.
Throwing large sums of money toward missiles and the development of the Strategic Defense Initiative (SDI) – coined Star Wars – the Reagan administration forced the Soviet Union to an arms race that exposed the true capacity of a socialist economic system. General Vladimir Slipchenko, recalled that Reagan’s push for the SDI left the Russian military “in a state of fear and shock because we understood that this could be realistic due to the economic and financial capabilities of the United States.”
Soviet politicians reacted almost in a state of hysteria believing they could not afford the risk of the United States having any success with SDI. Soviet defense spending in 1983 was approximately 55 percent higher than three years earlier. Under the leadership of Mikhail Gorbachev, defense expenditures rose another 45 percent after 1985.
By the end of Reagan’s presidency the writing was on the wall for the Russian leaders. More people could see the flaws of socialist thinking. A few days after Reagan left the White House in January 1989, Marxist writer Robert Heilbroner admitted in The New Yorker that capitalism had won the contest over socialism: “The Soviet Union, China, and Eastern Europe have given us the clearest possible proof that capitalism organizes the material affairs of humankind more satisfactorily than socialism.”
In September 1989, the people of Poland voted out the communists and two months later the Berlin Wall fell. Other communist nations in Eastern Europe fell out of the Soviet orbit and socialist regimes elsewhere struggled without aid from Moscow. In 1991, the Soviet Union was no more, and millions credited Reagan for bringing down the communist regime.
The impact of Reagan’s victory over the “evil empire” was enormous. In the 1990s, America witnessed huge defense savings and a budget surplus, and market capitalism displaced socialist central planning policies in many nations.
Source: The Cross and Reaganomics