We in North America have all heard the statement that the cause of the downfall of the Soviet Empire was that the US outspent them in the arms race and that bankrupted them. Of course, the sound-bites heard on TV should always be taken with a grain of salt.
This book, The Decline and Fall of the Soviet Empire: forty Years that Shook the World, from Stalin to Yeltsin, tells the story of the downfall of the Soviet Union, a downfall that started shortly after Stalin died in 1953. Its author is Fred Coleman, an American reporter who spent a great deal of time in Moscow between 1964 and 1995, much of it living there. Having spent two weeks myself in St. Petersburg in 2004 and spoken to people who had lived through the communist years (or "Soviet times" as they called it) I can attest to some of what is below.
The book follows the main leaders who followed Stalin, starting with Khrushchev (1953-1964), followed by Brezhnev (1964-1982), Gorbachev (1985-1991) and then finally the first half of Yeltsin's time (1991-1995). It would have been nice if it was written more chronologically but there was a lot of bouncing back and forth for the Khrushchev and Brezhnev portions that made it a bit of a tough read. The author's writing style was a bit repetitious too. But in the end it was well worth it to learn the details from closer to the inside. The following is my small summary of the causes of the downfall from what I learned in this book.
Khrushchev was a reformer, trying to fix many of the things that Stalin had done. It was a near impossible task and was why the hardliners eventually threw him out. Brezhnev then undid some of Khrushchev's reforms and spent his 19 years making things worse.
The cost of the nuclear arms race with the US was of course a part of the reason for the downfall. However, the Soviet Union was the largest country in the world with the longest land border and practically every stretch of that border involved conflicts or needed close military attention. This took up a large portion of the military budget.
As well, the Soviet Union encouraged the spread of communism in other countries and supplied resources and funding to those countries. This was done for many years with no financial return.
Communism was also a way of life. Every person in the Soviet Union was guaranteed a place to live and food, even if the living space was cramped and the food was bland. The money for this also came from the state. Every person was also guaranteed a job, regardless of whether there was any work to do. To manage all this was a centrally controlled system which required an army of bureaucrats, all of whom had to be paid. All these were added costs that had little return.
This highly centralized system was in general very inefficient and self-defeating. Factories that needed parts often couldn't get them or couldn't upgrade. Scientists often couldn't get supplies needed to advance the technology.
Not all of the downfall was due to financial reasons, though. The second half of the book is about how Gorbachev, and later Yeltsin, starting in 1985 dismantled the Soviet system. Gorbachev actually sought a third way, something between communism and a market system, but once he started to change the system, the changes took on a life of their own.
Before giving an example, here's a little background. At the top of the soviet hierarchy was the General Secretary of the Communist Party. He had to work with the Politburo, a group of men whom the General Secretary largely dictated to but whom a majority of which had to agree with those orders. So the General Secretary's powers weren't absolute.
For Gorbachev to create his third way he had to be able to make changes. But gradually he was losing his majority in the Politburo. To fix that he created the position of President for himself and a new congress body which was to have elected members.
The members of this congress were from all over the Soviet Union, including the republics that had formerly been separate countries and wanted to become so again. Once these members became elected they fought for independence. So in creating the congress just to weaken the communist party he inadvertantly gave power to those would wanted to dismantle or leave the system altogether.
This is just one example but there were many others. It means that one of the causes for the downfall of the Soviet Union were the people inside who wanted the system to fall. Gorbachev inadvertantly gave them the openings they needed and in the end instead of a third way, the communist system was removed altogether. For each step that Gorbachev took to weaken the communist party so that he could get his third way, he opened the door wider for others who wanted to dismantle the system altogether.
I'm sure I'm missing some of the other causes that were given in the book but if you want the inside story on the decline and fall of the soviet union then this is a good one to read.