In the ongoing series of arms limitation talks Reagan announced that the United States would pursue "the Strategic Defense Initiative," commonly called "Star Wars."
Star Wars was a missile defense system. The system would use satellites to detect missile launches anywhere in the world. Once detected laser technology would be used to destroy the missiles before they ever reached their targets. Reagan said that the United States would build and deploy this system.
Moreover, once built the United States would share the system with any nation that wished to use it. Two of the three parts of any nuclear attack system: land launched and ship launched missiles would be rendered obsolete.
In the negotiations Reagan refused to abandon Star Wars. The Soviet Union blinked. Only the United States had an economy strong enough to develop such a system. The Soviets were already spending 70% of their national budget on defense. They could not afford to develop an answer to Star Wars.
While Star Wars was pivotal we must not neglect to note that the Soviet Union was destroyed by two less spectacular things: blue jeans and Pepsi Cola.
The Soviet economy was not in good shape. The centrally-directed agricultural plans were failures. While blessed with one of the four great grain-growing capacities in the world the Soviet had gone from being a grain exporting nation to be a grain importing nation. The only really successful part of Soviet agriculture were the truck plots that sprang up in the and around the cities. The government allowed the farmers to keep the profits from these plots. These plots became the main source for fruits and vegetables. Allowed to keep the profits, those who tilled these plots easily out produced the state-run collective farms.
People in the Soviet Union were used to shopping without much merchandise or choice. One of my students who had emigrated from the Soviet Union declared himself a "Russian Rockefeller." Living in this country for only for a short period of time he was able to save enough money for two used cars. No more waiting on a list for more than a year to buy a dowdy Soviet car that wasn't good as what he was able to find used at his local Nissan dealer.
People carried large amounts of cash with them. Goods were produced as the state directed, not as the market dictated. Men's shoes would be available this month. When the quota was sold there would be no more men's shoes in the stores until next year. You carried cash because you never knew what your shopping trip might turn up.
My student told me that when he went to an American supermarket for the first time with a friend and he saw the meat case his only question was, "How much am I allowed to buy?" And he had choices! No more waiting in line to be handed a wrapped package with the choice of take it or leave it.
If you were an American tourist people would offer to buy your denim jeans right off your body. Give me your pants right now and I'll give you $300 American. You don't have to press them or wash them or even let them cool--I'll buy your pants now!
Pepsi Cola entered the soviet market in the 1950's. It was one of the few American products that was allowed to be produced and sold in the Soviet Union. If it was true that the Soviet system was the best and that most Americans lived in grinding poverty how come there was not good Soviet soda pop? Why was there no good Soviet-made toilet paper?
President George W. Bush rightly observed that freedom is a virus and there is no cure for it if it is allowed to spread in a population. This is exactly what happened in the Soviet Union and in the former Iron Curtain countries. Military events were unquestionably important but equally important was that individual freedom, property rights and competition began to produce a standard of living for the average person that could not be matched by authoritarian-collectivist .