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By Peter Huessy, President of Geo-Strategic Analysis, Potomac, Maryland

The United States strategy of “containment” was put to the test following the Soviet occupation of Eastern Europe that gave rise to the Cold War. North Korea or the DPRK under the direction of the Soviet Union invaded the Republic of Korea in June 1950. Ironically, the State Department author of the “containment” strategy--Mr. George Kennan-- opposed Presidents Truman’s’ commitment of American troops to the Korean conflict although Truman was implementing the very policy of containment that Kennan had proposed in 1946 when he warned of continued Soviet aggression.

Two decades later in 1971, President Nixon initiated a policy of détente and peaceful coexistence with the USSR, and then a year later signed an ABM treaty with the USSR to ban missile defenses while agreeing in the SALT I treaty with the Soviets to regulate the expansion of the country’s respective nuclear arsenals. Through three administrations—under Presidents Nixon, Ford, and Carter—the US policy was one of seeking growth in trade, investment, and energy with the USSR, under the assumption that the Soviets might be as a result less aggressive in their foreign policy.

Leonid Brezhnev Richard Nixon 1973

Richard Nixon (right) meets Leonid Brezhnev (left) June 19, 1973 during the Soviet Leader's U.S. visit. The interpreter is Viktor Sukhodrev.

"Win the Cold War" 

For most of the Cold War the US played “on its side of the playing field”. But under President Reagan the US policy changed to a roll back strategy, aimed to “win the cold war” and do so “by taking advantage of every Soviet weakness and US strength.”

For the decade prior to the 1982 formal change in US policy, the Soviets secured through trade and theft sufficient computer and other high technology advances from the West to close a 14-year gap to 3 years. The Soviets also thought the worldwide correlation of military forces was entirely on their side. At the same time, the Soviets undertook a rhetorical “peace offensive” , including a “nuclear freeze”, aimed at keeping the American Pershing missiles out of Europe, while the Soviets were deploying thousands of their own medium range SS-20 nuclear missiles in Europe and Asia.

It was thus in that context that the Reagan administration adopted a new seven-fold plan: 

(1) support internal disruptions in the Soviet empire especially in Poland; 

(2) promote freedom within the third world especially in Soviet client states; 

(3) dry up sources of Soviet hard currency (estimated at$37 billion annually); 

(4) overload the Soviet economy with a technology-driven arms race, including strategic nuclear and conventional force modernization and missile defenses; 

(5) stop the flow of Western technology to the Soviets; 

(6) raise significantly the cost of the wars the USSR was supporting; and 

(7) demoralize the Soviet leaders and generate pressure for change. As Margaret Thatcher, then prime minister of Britain would later write, “I regarded it as my duty to further Reagan’s bold strategy to win the Cold War which the West has been slowly, but surely losing.”

They key to this strategy was understanding the Soviets were spending more on their military than official statistics revealed, and on a Soviet GDP far less than was assumed to be the case by most Western analysts. Until 1975, the US intelligence community assumed the Soviets were spending 6% of their GDP on the military. The CIA, due largely to the efforts of Dr. John Foster, (from interview by the author) former director of the Lawrence Livermore National Lab and Assistant Secretary of Defense for DRT&E, raised its estimate to 12% but only after repeatedly refusing to change its historically incorrect estimates. The DIA at the time argued it was actually close to 30%. In fact, as was later revealed with the collapse of the Soviet empire, the Soviet economy was actually only one-sixth of the US economy and military spending was fully 33% and even as high as 40% of its economy-- not even close to the revised 12% the CIA had newly adopted, up from the paltry 6% long assumed to be the case.

The point of this argument? As President Reagan and his CIA Director Casey argued , if the Soviets were “terribly vulnerable economically” then it made sense to “play to these vulnerabilities.” And one key to that was to deplete annual Soviet hard currency earnings which at the time (1980) were estimated to be $32 billion.

President Ronald Reagan, accompanied by CIA Director William Casey

President Ronald Reagan, accompanied by CIA Director William Casey

The Soviets too knew that Poland was the linchpin of the Warsaw Pact and Soviet power in Europe. Martial law was imposed on Poland in December 1981, and the labor union Solidarity was outlawed. Reagan unlike most European leaders wanted to punish Russia. Roger Robinson, a key figure in the National Security Council, successfully pushed for just such a policy --to stop multiple gas pipelines from Japan and Europe to Russia; halt subsidies to Russian allies; stop technology transfers and suspend the most favored nation status with Poland. The pipeline measures alone cost the Soviets some $15 billion over two years.

The administration also put together a secret alliance with Pope John Paul II that sent $8 million a year to Solidarity in the form of copier machines, printing equipment, VCRs and “freedom tapes” to keep the union alive. As a result, some 1500 underground newspapers and 2400 books and pamphlets were circulated in Poland, lighting the fuse of freedom.

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The National Intelligence Council head Henry Rowen pushed to further strengthen the military challenge to Moscow, predicting the cumulative burden would make the Soviet system implode. The US doubled its acquisition of military hardware by 1985. The Soviets in 1979 had a 3 to 1 and 2 to 1 advantage over NATO in main battle tanks and tactical aircraft But by 1985, after the Reagan defense build-up, a top Soviet official admitted the new weapons being deployed by the US and its allies meant that Western Europe could no longer be overrun with Soviet tank armies. Furthermore, Moscow officials believed , SDI and missile defense could be 90% effective, and that the US counter deployment of Pershing and GLCM theater missiles had effectively checkmated the Soviet original deployment of SS-20 nuclear armed missiles.

Gorbachev, the then Soviet leader, tried to counter America’s challenge. He increased military spending some 45% during his tenure, which was in addition to the nearly 50% increase in military spending in five years prior to his becoming General Secretary. But the relative standard of living continued to decline in Russia and a budget heavily weighted toward military spending worked against continued promises by the government that living standards would soon improve. The Soviets were now spending 39% of GDP on defense.

Reykjavik Summit

So, at the Reykjavik summit in 1986, Gorbachev launched a new diplomatic initiative. If Reagan would put the US SDI program permanently in the laboratory, the Soviets would jointly with the US dramatically cut their nuclear and conventional military arsenal. As relayed by Robert McFarlane to a small meeting at the American Foreign Policy Council this author attended,-fourteen times Gorbachev tried to persuade Reagan to give up missile defense and 15 times Reagan argued “No!”. Gorbachev then pushed away from the table and as former US Attorney General Meese has confirmed “abandoned the struggle.”

Reagan announces the Strategic Defense Initiative

Reagan announces the Strategic Defense Initiative

Soviet High Tech Stealing

Complimenting the military challenge was the United States push to stop the Soviets from purchasing or stealing high technology and earning the hard currency with which to do so. An infusion of high technology equipment was determined to be critical for the Russian economy to survive and was at the top of the objectives of the KGB. The Reagan administration prosecuted hundreds of cases of where US companies violated export controls, with a deal ratified in 1984 with the Europeans to toughen such controls further. One NSC official also designed a companion program where high technology exports to the Soviets were allowed but where US engineering firms were directed to design defects into the technologies the Russians were stealing.

Cost of Wars

An additional strong thread in the carpet of policies designed to weaken the Soviets was to markedly increase the cost of their wars. Soviet bases in Afghanistan came under attack with US supplied rocket propelled grenades and rockets. After 24 of 27 Soviet planes were shot down in Angola with US Stinger missiles, the Afghan northern alliance received its first shipment of Stingers and 75 of 200 Russian aircraft were subsequently shot down and destroyed. By 1984, the war in Afghanistan cost the Soviets $4 billion annually.

Hard Currency

Next on the list was cutting back on Soviet hard currency and foreign exchange earnings. The US successfully called into question whether Moscow would stand behind the $30 billion in loans to Eastern Europe. And at the same time, in 1985, the Saudi’s increased oil production from 2 million to 9 million barrels per day, and subsequently the price of oil and gas dropped precipitously from $30 to $12 a barrel, costing Moscow upwards of $25 billion annually. And with less money, Moscow’s oil friends in Libya, Ira and Iran could not buy more Russian weapons.

Warren Norquist put many of these numbers together in a 2001 essay for Global Competitiveness on how the Cold War was won. For example, Russian assistance to client states escalated to nearly $14 billion a year. Replacing lost western technology; fighting more intense wars in Nicaragua, El Salvador, Angola, and Afghanistan, losing oil, gas, and arms sales revenue, all cost Russia an average of $63.7 billion annually between 1986-89, an increase of nearly $40 billion from the costs of $27 billion in 1982.

Now critics of Reagan’s proposed policies warned Reagan would reignite an arms race and would increase the cost of war. In the President’s first press conference, he was asked whether he was going to continue a policy with the USSR of détente and peaceful, coexistence, even though he had campaigned on ending both policies. We know now after some four decades that the Soviet empire did collapse because of the US and allied policies that challenged Moscow rather than seeking to maintain the status quo.

China Lessons

What lessons could one draw for informing current US policy especially with respect to China? It is markedly true the US economy is much more connected to the Chinese economy than the US and Russia in 1981. But the rationale behind détente and peaceful coexistence was not unlike the long-held US policy toward China—we assumed trade, investment and the growth of the Chinese middle class would generate such change in China as to make the country less an adversary and generally acceptive of the world international liberal order.

Chinese President Xi Jinping shakes hands with U.S. Vice President Joe Biden (L) inside the Great Hall of the People in Beijing December 4, 2013.

Chinese President Xi Jinping shakes hands with U.S. Vice President Joe Biden (L) inside the Great Hall of the People in Beijing December 4, 2013.

Would a similar “peace through strength” strategy work against China? After all, China like Russia decades ago has some serious challenges: 

(1) A demographic demolition coming soon with a birth rate of less than one per couple. 

(2) A hugely overextended Chinese exchequer to the tune of $42 trillion. 

(3) An emerging elderly population greater in number than the entirety of the US population, and an equal number of people addicted to smoking. 

(4) Growing industrial pollution and respiratory illness. And 

(5) an Achilles heel of energy deficiency—China has five times the US population but one-fifth the energy production of the US economy.

Should the US seek to partner with China and assume its growing economic and military power is going to follow a “peaceful rise?” Or should we assess the dangers that may be gathering, and seriously examine our assumptions, much as we did in 1980 when we decided with respect to the USSR, whether to continue down the road of détente and peaceful coexistence or switch to a policy of “peace through strength?”

Peter Huessy is Director of Strategic Deterrent Studies at the Mitchell Institute.