USSR

Gorbachev was elected President in 1985 and realized he had to improve the economy but he was well aware that this could not be done if he continued to fund defense. Reagan had vastly increased the US defense budget and Gorbachev realized he could not keep spending on defense like the US. He cut defense by half and tried to introduce some market ideas. The USSR United Soviet Socialist Republic, like all socialism, was government control from central headquarters. This was doomed to failure. Imagine a group sitting around in Moscow trying to determine in advance how much of every item will be needed in the future. Take only one example. How many pairs of shoes and what sizes will be needed in the coming years. They end up with shortages in one area and excess production in another. When Gorbachev started making changes it quickly got out of hand and other countries within the Soviet sphere began to make changes. Starting with Lithuania a total of 15 countries left the Soviet Union within two years and each headed straight for a free market type of economy. People rejoiced with the opportunity to elect their leaders in democratic fashion. This was known as a transition from a command economy to a market economy showing once again that socialism does not work in the long haul. The reverse also happens. When Venezuela transitioned from a market economy to a socialist government the country went broke in less than ten years. Gorbachev gets the credit for changing the USSR and got the Peace prize but it was the pressure from the US military build up that pushed him to make changes.