Reagan and the World: Leadership and National Security, 1981--1989

Introduction

Bradley Lynn Coleman and Kyle Longley

President Ronald Reagan traveled to the Soviet Union in May 1988. He personally delivered the Intermediate-Range Nuclear Forces Treaty, recently ratified by the US Senate, to the Soviet secretary general, Mikhail Gorbachev. The two men also discussed the status of ongoing strategic nuclear arms negotiations and other topics of shared interest. Yet the importance of the Moscow summit did not really concern treaties or agreements. The enduring legacy of Reagan’s visit instead involved his engagement with Soviet citizens.

In Moscow, the president mingled with tourists in Red Square, dined with Soviet artists and athletes, and attended the ballet. Then, on May 31, Reagan spoke to six hundred students at Gorbachev’s alma mater, the prestigious Moscow State University. Your generation is living in one of the most exciting, hopeful times in Soviet history, Reagan observed.¹ In his prepared remarks, the president talked about Hollywood films, the US government, and the information revolution. He then took questions from the students.

It was surreal and illuminating, Svetlana Savranskaya, a senior at Moscow State University remembered. For those [of us] in attendance, she added, the Cold War ended on May 31, 1988…. We understood that the smiling man who spoke about things close to our hearts, like human rights, would not push the button to unleash a US nuclear attack on the Soviet Union. President Reagan, the leader of our archenemy, proved to be human, engaging, and enthusiastic about building a real partnership with the Soviet Union. On the stage at Moscow State University, she concluded, Reagan demolished the wall of mistrust that divided the Soviet and American people.²

In early 2013, the John A. Adams ’71 Center for Military History and Strategic Analysis—a specialized element of the Virginia Military Institute (VMI) focused on the Cold War—launched a project to explore and promote the military history of the Reagan era. Sparked by the ongoing declassification of Reagan administration records, the endeavor included a dissertation grant, essay contest, oral history interviews, and public lectures. With partners across the VMI community and country, the center also organized a three-day conference on Reagan in Lexington, Virginia. Svetlana Savranskaya, now a senior research fellow at George Washington University, joined dozens of established historians, national security professionals, and Reagan administration officials for the event.

Conceived four years ago, this book on leadership and national security is an important piece of the center’s Reagan initiative. Over the past thirty years, writers have devoted considerable attention to the Reagan presidency. Early critics such as Walter LaFeber and Michael Rogin portrayed Reagan as a dangerous warmonger and his presidency as plagued with mismanagement, misconduct, and foreign-policy failures.³ In response, Reagan supporters, including Peter Schweizer and William Pemberton, described Reagan as the triumphant hero of the American century. The president, they concluded, had renewed American strength and won the Cold War against communism.⁴ Raymond Garthoff and others—including many of the historians featured in this book—have recently produced more-balanced descriptions of the Reagan administration, blending Reagan’s accomplishments and shortcomings into a more coherent and accurate portrayal of the president.⁵ Engaging newly released archival documents, this book advances the recent trend in the literature on the Reagan presidency, broadening our understanding of this essential period in the history of international security relations.

The dynamics of the Reagan administration present challenges to students of the past. Indeed, there were two Ronald Reagans making national security policy during his presidency. One Reagan pushed a massive military buildup, supported the overthrow of totalitarian regimes, and advocated for the expansion of democracy and capitalism. The other Reagan worked to abolish nuclear weapons, engage adversaries, and promote human rights. Historians must disentangle Reagan’s words and deeds. The gap between his rhetoric and actions often leaves students searching for the real Reagan. In addition, his chaotic, often confusing management style—compounded by the presence of six national security advisers at the White House in just eight years—makes it difficult to locate the administration’s position on any given issue.

An additional challenge lies in Reagan’s complex relationship with George H. W. Bush, a political opponent in the Republican Party who became his vice president. The Cold War, according to Bush, had not ended by the time of his inauguration as forty-first president of the United States in January 1989. Bush inherited, among other problems, a crushing national deficit and rapidly changing international order. During his desperate campaign for reelection in 1992, President Bush claimed that the United States won the Cold War against the Soviet Union. Making the assertion, he hoped to gain a political advantage against Democratic Party presidential nominee William J. Clinton. Later, Republic Party neoconservatives such as Dick Cheney and Donald Rumsfeld seized on this concept, interpreting and presenting Reagan in ways that justified their own assertive brand of American internationalism in the Middle East and beyond.

Organized in four parts, this book reflects the complexity of the Reagan presidency. The first part focuses on Reagan and the US national security establishment. In chapter 1, US Department of State historian James Graham Wilson examines the president’s engagement with the Soviet Union. Wilson argues that President Reagan’s willingness to engage adversaries—over many of his advisers’ objections—proved an indispensable component of the final decade of the Cold War. In chapter 2, Beth A. Fischer explores the president’s position on nuclear weapons. A pathbreaking scholar of the Reagan presidency, Fischer presents Reagan’s commitment to the elimination of nuclear weapons as a deeply held moral conviction. Ronald J. Granieri, a senior fellow at the Foreign Policy Research Institute, evaluates Reagan’s controversial secretary of defense, Caspar Weinberger, in chapter 3. In doing so, Granieri offers valuable insight into the organization and function of the national security establishment during the Reagan presidency. In chapter 4, James R. Locher III shifts the narrative to Capitol Hill with coverage of the Goldwater–Nichols Department of Defense Reorganization Act of 1986. Over the opposition of the president, secretary of defense, and Joint Chiefs of Staff, the landmark legislation enhanced the unity of the US Armed Forces, strengthened civilian control of the military, and generated structural reforms across the defense community. The legislation, Locher shows, was a triumph of courageous, values-based bipartisan leadership by Arizona Republican Barry Goldwater and Georgia Democrat Sam Nunn.

Part 2 covers US relations with the Soviet Union and Europe. In chapter 5, the influential British scholar Archie Brown argues that Gorbachev, not Reagan, was the indispensable international actor of the 1980s. An emeritus professor at Oxford University, Brown confirms that Reagan’s military buildup and hard-line anti-Soviet rhetoric strengthened the Kremlin’s determination to compete with the United States during the early 1980s. After 1985, Gorbachev’s willingness to engage Reagan produced a negotiated end to the Cold War. In chapter 6, James Cooper, a senior lecturer at Oxford Brookes University, analyzes the special relationship between Reagan and Margaret Thatcher. The US president and British prime minister shared ideological convictions—notably a passionate disdain for communism—but often downgraded their partnership to advance personal goals. In chapter 7, University of Virginia professor William I. Hitchcock examines US-French relations during the Reagan presidency. Reagan and President François Mitterrand held conflicting ideological views but forged an important partnership based on pragmatic interest and a shared sense of history. In his essay Navigating Choppy Waters, David F. Patton of Connecticut College explores US-German relations during the final decade of the Cold War. At the center of the Cold War in Europe, West Germans, active agents of their own experience, successfully shaped their relationship with the United States to achieve their national goals and objectives, notably the reunification of Germany.

Part 3 explores US relations with Asia, Latin America, and the Middle East. In chapter 9, University of Arizona professor Michael Schaller traces the transformation of Reagan’s attitudes toward Communist China and Vietnam. Over time, Reagan abandoned his strident rhetoric toward the former US adversaries in favor of a more moderate, constructive posture. Kyle Longley of Arizona State University treats US policy toward Central America in chapter 10. Reagan’s obsession with the region resulted in a series of bad decisions that nearly brought down the Reagan White House. Staying focused on the Americas, Evan R. Ward investigates US-Mexican environmental relations during the Reagan years in chapter 11. A professor at Brigham Young University, Ward shows how the Reagan administration productively used bilateral forums to address Mexican-American water issues during the 1980s. Ward challenges readers to integrate environmental topics into the history of US foreign relations. In chapter 12, Charles F. Brower IV, professor at the Virginia Military Institute and former US Army aide to President Reagan, describes and analyzes US policy toward Lebanon. President Reagan, Brower concludes, was a stranger in a dangerous land.

In addition to the essays printed in this volume, the Adams Center project generated other significant scholarship on the Reagan presidency. Importantly, six additional articles, written with Adams Center support since 2013, offer valuable information and analysis on the Reagan era, and all are available on the Adams Center’s website (www.vmi.edu/adamscenter). In the first, renowned journalist and Reagan biographer Lou Cannon shares his personal insights on the president’s leadership in the essay Freedom Man. Alan Dobson, now an honorary professor at St. Andrews University, dissects Reagan’s management style in an essay titled Reagan’s Strategies and Policies. Svetlana Savranskaya covers the Reagan–Gorbachev summits—including insightful treatment of the president’s 1988 visit to Moscow—in her paper Bringing Down the Walls. The two leading scholars of the Red Army, David Glantz and Jacob Kipp, examine Soviet conventional and nuclear policy during the 1980s. Finally, James Hentz, the head of VMI’s Department of International Studies and Political Science, treats US policy toward southern Africa during the Cold War in Reading History Forward.

The authors featured in this book stand on the forefront of Reagan scholarship. Even so, students and scholars must do more work on the Reagan presidency. Every month, employees of the National Archives and Records Administration declassify and release additional US government records generated during the Reagan years. The continued flow of new sources promises to refine and challenge our understanding of Reagan. This collection therefore includes an essay by Ryan Carpenter, a doctoral candidate at the Catholic University of America actively engaged in research on the national security policy of the 1980s. His essay, Researching Reagan, surveys key memoir and manuscript sources on the Reagan presidency. Carpenter also identifies important topics for further research, subjects not covered here, including US policy toward Afghanistan, covert operations, and counter illicit trafficking during the Reagan years.

The essays published here and online significantly advance our understanding of leadership and national security during the Reagan presidency. Together, they provide readers with a greater understanding of the complexity of the Reagan years. The writers differ, of course, on their interpretation of President Reagan’s leadership and other aspects of national security affairs during the 1980s. The president’s courageous engagement with Gorbachev, for example, clashed with his obstructionist approach to Costa Rican president Oscar Arias’s peace initiative in Central America. Scholars focused on relations between the United States and Europe present Reagan more favorably than those examining American relations with the developing world. Here and elsewhere, Reagan responded to different situations in different ways across time and space. For students of the period, this complexity only enhances his appeal as a scholarly subject.

Admiral James G. Stavridis, US Navy (ret.), addresses the Reagan conference audience at the Virginia Military Institute, November 3, 2014. The former North Atlantic Treaty Organization commander called on attendees to build bridges, not walls, to promote US national security in the twenty-first century. (Courtesy of the John A. Adams ’71 Center for Military History and Strategic Analysis)

The publication of this book marks the end of the Adams Center project to better understand the enduring legacy of the Reagan presidency. It is also a launching point for the next generation of scholars and national security professionals. At the Virginia Military Institute in November 2014, former North Atlantic Treaty Organization commander Admiral James G. Stavridis, US Navy (ret.), talked about the linkages between twentieth- and twenty-first-century international security. Twentieth century national security was all about building walls, he observed, and the results proved cataclysmic—two world wars and a Cold War. Walls did not provide security for the United States; twenty-first-century leaders therefore need to find another approach to national defense. Walls are not security, we have to find ways to build bridges—play the long game—to create real security for the United States, Stavridis proposed.⁶ The Reagan presidency, as this book shows, offers a template for building those bridges but also reveals the risks associated with perpetuating an outdated national security mindset.

Notes

  1. Moscow Summit; Excerpts from the President’s Talk to Artists and Students, New York Times, June 1, 1988.

  2. Svetlana Savranskaya, Bringing Down the Walls: Reagan and Gorbachev, paper presented at The Enduring Legacy: Leadership and National Security during the Ronald Reagan Era, November 3–4, 2014, John A. Adams ’71 Center for Military History and Strategic Analysis, Virginia Military Institute, Lexington, VA, 10–11, at http://www.vmi.edu/adamscenter.

  3. Walter LaFeber, Inevitable Revolutions: The United States and Central America (New York: Norton, 1985); William Leogrande, Our Own Backyard: The United States and Central America (Chapel Hill: University of North Carolina Press, 1998); Michael Rogin, The Movie: And Other Episodes of Political Demagoguery (Berkeley: University of California Press, 1988); and Frances Fitzgerald, Way Out There in the Blue: Reagan, Star Wars, and the End of the Cold War (New York: Simon and Schuster, 2001).

  4. Peter Schweizer, Victory: The Reagan Administration’s Secret Strategy That Hastened the Collapse of the Soviet Union (New York: Atlantic Monthly Press, 1996) and Reagan’s War: The Epic Story of His Forty-Year Struggle and Final Triumph over Communism (New York: Anchor, 2003); William E. Pemberton, Exit with Honor: The Life and Presidency of Ronald Reagan (Armonk, NY: M. E. Sharpe, 1997); Ronald Reagan, Reagan, in His Own Hand: The Writings of Ronald Reagan That Reveal His Revolutionary Vision for America, ed. Kiron Skinner, Annelise Anderson, and Martin Anderson (New York: Free Press, 2001); and Edward Lynch, The Cold War’s Last Battlefield: Reagan, the Soviets, and Central America (New York: Global Academic, 2013).

  5. Raymond L. Garthoff, The Great Transition: American-Soviet Relations and the End of the Cold War (Washington, DC: Brookings Institution Press, 1994); Beth A. Fischer, The Reagan Reversal: Foreign Policy and the End of the Cold War (Columbia: University of Missouri Press, 1997); and Michael Schaller, Right Turn: American Life in the Reagan–Bush Era, 1980–1992 (New York: Oxford University Press, 2006).

  6. James G. Stavridis, keynote presentation at The Enduring Legacy.

Part 1

Ronald Reagan and the National Security Establishment

1

Ronald Reagan’s Engagement and the Cold War

James Graham Wilson

There are two private moments leading up to Ronald Reagan’s White House years that illustrate his sense of mission. Why are you doing this, Ron? Why do you want to be President? Stuart Spencer, a longtime associate, asked Reagan during the campaign against President Jimmy Carter in 1980. To end the Cold War, was his answer. How did he plan to do that? I’m not sure, but there has got to be a way, Reagan insisted.¹ On another occasion, the former governor told his future national security adviser, Richard Allen, that his overall approach to the Soviets was not complicated: We win; they lose.² These moments foreshadowed presidential rhetoric familiar now to everyone. At Westminster, England, in June 1982, Reagan extolled the march of freedom and democracy which will leave Marxism-Leninism on the ash-heap of history as it has left other tyrannies which stifle the freedom and muzzle the self-expression of the people.³ The following spring he called the Soviet Union an evil empire.⁴ Four years after that, standing in front of the Brandenburg Gate in West Berlin, he proclaimed: General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization: Come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!⁵

Twenty-five years after the collapse of the Berlin Wall and the end of the Cold War, these statements elicit broader questions. Did Reagan construct and execute a grand strategy to win the Cold War? Did his thinking toward the Soviet Union change over time? Would another US president—such as Jimmy Carter or George H. W. Bush—have pursued the same policies after the arrival of Mikhail Gorbachev in 1985? No matter how one answers these questions, there is now a presumption of greatness about Reagan. Americans from across a wide political spectrum associate the memory of the fall of the Berlin Wall with Reagan’s speech at the Brandenburg Gate on June 12, 1987—even though Reagan was not president on November 9, 1989, when the wall actually came down, and Gorbachev gave no order that fateful evening.

Reagan was indeed a key figure in the story of the end of the Cold War.⁶ His greatest contribution, however, was his willingness to engage the Cold War adversary. Strategies of engagement on the part of President Reagan and his administration preceded the arrival of Gorbachev on the scene in March 1985. The ascent of Secretary of State George P. Shultz from July 1982 to January 1985 empowered Reagan’s instincts to negotiate with the Soviets in spite of his fervent anticommunism and inherent skepticism about whether the Soviets could ever be trusted. So, too, did the arrival of Jack Matlock, the top Soviet adviser on the National Security Council (NSC) staff from the summer of 1983 on, who crafted a four-part framework for diplomacy with the Soviets. Progress was halting, as hard-liners such as Secretary of Defense Caspar W. Weinberger resisted such efforts, and the president refrained from intervening to settle personal and policy disputes among his team. Reagan’s subsequent engagement with Gorbachev led him to think in terms grander than anyone might have expected: he seized on the prospect of sharing Strategic Defense Initiative (SDI) technology with the Soviet Union to make certain that both sides stuck to a blockbuster deal on nuclear arms to reduce arsenals eventually to zero.

Reagan and Communism

Ideology and faith were key components in the life of Ronald Reagan, which ran parallel to the life of the Soviet Union. Born in Tampico, Illinois, on February 6, 1911, Reagan was the son of Nelle Clyde Wilson Reagan, who had only recently been baptized into the Disciples of Christ Church, and Jack Reagan, a disappointing, alcoholic father who would move the family ten times over the next decade. The Reagan family eventually settled in Dixon, one hundred miles west of Chicago, where Reagan spent his teenage years as a lead in school plays and a lifeguard who notched seventy-seven rescues over the course of six summers. Young Reagan, who went by the nickname Dutch after his father remarked that he resembled a fat Dutchman, asked to be baptized into his mother’s church after reading Harold Bell Wright’s novel The Printer of Udell’s: A Story of the Middle West (1902). He learned from Ben Cleaver, his family’s pastor and the father of his first girlfriend, about the atheistic doctrines on which communism rested and how the world must look [to America] for its emancipation from the most heartless spiritual despotism ever.⁷

In 1928, Reagan followed Margaret Cleaver ninety miles south to Eureka College, a Disciples affiliation. The two were engaged upon graduation in 1932, yet the engagement did not last. As fond as she was of Dutch, she thought he lacked interest in the wider world, writes biographer Jacob Weisberg.⁸ Reagan headed into the world of radio, becoming a successful sports announcer first in Davenport and then in Des Moines, Iowa. Already a self-made man in spite of the Great Depression, Reagan aspired higher. A screen test for Warner Brothers in 1936 eventually landed him a contract that would make him a film star.

Reagan was forever after associated with the role of George Gipp in Knute Rockne—All American (1940) and was most proud of his performance in Kings Row (1942).⁹ He also played a leading role in the film Brother Rat (1938), a comical depiction of cadet antics at the Virginia Military Institute. His stint in the First Motion Picture Unit of the US Army Air Forces included acting in and narrating recruitment and training films. He explained why America was fighting in World War II and what for. After his discharge in September 1945, Reagan found more opportunities for activism than the lead acting roles to which he aspired. His ascent to the presidency of the Screen Actors’ Guild coincided with an era of ugly labor strife in Hollywood. On one occasion, he received a telephone call threatening disfigurement if he did not support a union strike sponsored by Communist fronts. Reagan regarded this strike as something much larger than a local dispute. World War II demonstrated that ideology had consequences; it appeared that communism was the new fascism. As he saw it, ideology transcended national identity—Nazis who committed atrocities, for instance, were entities apart from Germans. In his testimony before the House Un-American Activities Committee, he basically said that Communists were not real Americans, so from his perspective there was nothing un-American about naming names.

In presidential elections, Reagan voted for Franklin D. Roosevelt four times and then for Harry S. Truman in 1948. He remained a registered Democrat even as he supported Dwight D. Eisenhower in 1952 and 1956 and aligned himself with modern American conservatism. His education in retail politics during this period was remarkable. Hired by General Electric (GE) to host a television theater and hold meetings showing off its new consumer products, Reagan was also selling the American dream.¹⁰ He hosted town-hall meetings, a task for which he crafted a standard speech that elucidated all-American, capitalist values in the face of what he saw as the expansion of government and the specter of international communism.

You and I have a rendezvous with destiny, Reagan proclaimed in his advertisement for Barry Goldwater’s faltering presidential campaign in 1964. We will preserve for our children this, the last best hope of man on Earth, or we will sentence them to take the first step in a thousand years of darkness.¹¹ Reagan’s political ambitions were high. After winning the California governorship two years later, he briefly pursued the Republican presidential nomination in 1968. He criticized Richard Nixon’s foreign policies—especially toward Vietnam, the Soviet Union, and the People’s Republic of China—while also compromising with the opposition in the California legislature. Anytime I can get 70 percent of what I’m asking for out of a hostile legislative body, I’ll take it, he told aide Peter Hannaford. I figure that it will work well enough for me to go back later and get a little more of it here and a little more of it there.¹²

Reagan very nearly defeated Gerald Ford in the Republican primary of 1976 and eliminated the term détente from the sitting president’s political vocabulary after castigating his foreign policies on the eve of the North Carolina primary. That year marked the bicentennial celebration of the founding of the United States; in an impromptu speech at the Republican National Convention, the former governor described a letter for a time capsule to be opened on the three hundredth anniversary of the independence of the United States in 2076. Whether [Americans] have the freedoms that we have known up until now will depend on what we do here, he said. Will they look back with appreciation and say, ‘Thank God for those people in 1976 who headed off that loss of freedom, who kept us now 100 years later free, who kept our world from nuclear destruction?’¹³

In other words, Reagan was arguing, America was engaged in a struggle between freedom and communism that had the potential to end in nuclear annihilation. Yet however eloquently stated in 1964 and 1976, Reagan’s vision for the future did not address the fate of people in the rest of the world. Americans were to remain free in 2076, but what about the inhabitants of the Soviet Union or the citizens of leftist regimes in eastern Europe, Latin America, Asia, and Africa? Did America’s preservation of peace and freedom require liberating the Communist world? Or could America achieve its goal while coexisting alongside that world?

Reagan would have responded to these questions in two ways. On the one hand, communism was a disease to be eradicated. Americans required frequent vaccination to guard against being infected until the day when this health threat will be eliminated as we eliminated the black plague, Reagan declared in a radio address in May 1975.¹⁴ A divided world could not survive half-slave, half-free, he wrote to a supporter while on the campaign trail in 1980. We must also keep alive the idea that the conquered nations—the captive nations—of the Soviet Union must regain their freedom.¹⁵

On the other hand, Reagan believed in peace through strength. America has never gotten into a war because it was too strong, he used to tell his supporters. An important and often overlooked influence on him was his second wife, Nancy Davis Reagan, who later recalled, For years it had troubled me that my husband was always being portrayed by his opponent as a warmonger, simply because he believed, quite properly, in strengthening our defenses.¹⁶

Peace through strength did not mean liberating humanity but rather restoring the US strategic advantage that had existed prior to the Cuban Missile Crisis. When John F. Kennedy demanded the withdrawal of Soviet missiles from Cuba and the tension mounted, it was Nikita Khrushchev who backed down, and there was no war, Reagan said in 1980. Our nuclear superiority over the Soviets was about 8 to 1.¹⁷ Indeed, conservatives and neoconservative Democrats such as Scoop Jackson insisted that the Soviets had not only caught up with the United States during the Brezhnev era but had surpassed it. Détente had not failed to curb Soviet meddling in the Third World, and strategic arms control had not stopped the Kremlin from deploying SS-20 intermediate-range missiles as well as a new generation of intercontinental ballistic missiles and strategic bombers that could knock out US ground-based-missile silos. Reagan and his colleagues on the Committee on the Present Danger in the late 1970s opposed the Treaty between the United States of America and the Union of Soviet Socialist Republics on the Limitation of Strategic Offensive Arms (Strategic Arms Limitation Treaty, SALT) II because they believed it locked in these Soviet advantages.

Reagan subscribed to both peace through strength and a crusade for freedom. This assessment of the Soviet Union held contradictions. Peace through strength cast the Soviets as incredibly strong. In his radio speeches following the presidential primary in 1976—many of which he drafted himself—Reagan cited Soviet capabilities to fight and win a nuclear war. Crusade for freedom cast the Soviets as inherently weak: its economy was on the brink of collapse, and there was no real point in negotiating with it because the Kremlin had never lived up to its end of any bargain. When Jimmy Carter prevailed in November, Reagan returned to his ranch in California and prepared to run again four years later. He castigated Carter for his commitment to signing SALT II, insisting that the president of the United States ought to be able to broker a better deal. Privately, the former governor was dubious whether any deal was possible. I don’t really trust the Soviets, Reagan wrote to a friend in April 1980, and I don’t really believe that they will really join us in a legitimate limitation of arms agreement.¹⁸

President Reagan and the Soviet Union, January 1981–July 1982

In January 1981, Reagan entered the White House with a fundamental ambivalence about how to approach the Soviet Union. He predicted recovery but also acknowledged relative declines on the part of the United States and its allies. Indeed, the global economy grew very little between 1971 and 1982. After a miraculous recovery from 1945 on, the economies of most West European countries were sputtering at the end of the 1960s. The need to stabilize and retool the economies of the World War II aggressors tested the victors’ commitment to free trade and open competition. In the United States, goods produced in Japan and West Germany crowded out those produced at home. In large swaths of the South and the Rust Belt stretching from New York to Ohio and Michigan, manufacturing jobs disappeared. The oil embargo by the Organization of the Petroleum Exporting Countries (OPEC) because of US support for Israel during the Arab–Israeli conflict in October 1973 closed the spigot on the flow of cheap oil that had fueled the recovery of international capitalism after the Great Depression and World War II. The rise of OPEC called into question the notion of a coalition of great powers that could impose political and economic order on their terms. The embargo caused tremendous angst. Can Capitalism Survive? read a cover of Time in 1975. Is Capitalism Working? read a slightly less ominous cover in 1980.¹⁹

Reagan’s former employer, GE, exemplified capitalism’s stagnation. A legacy of the iconic inventor Thomas Edison, GE produced power turbines, jet engines, locomotives, televisions, microwaves, and lightbulbs. Despite pioneering innovations such as a CT scan in the 1970s, however, GE ambled through a decade in which the Dow Jones Industrial Average closed at 785.57 on January 2, 1970, and 785.75 on January 2, 1980. Shortly after Reagan gave his Inaugural Address in late January 1981, in which he declared that government is not the solution to our problem; government is the problem,²⁰ Jack Welch took the helm of GE. Welch’s unstated message was that the problem at the company was too many jobs. Neutron Jack, as he was quickly dubbed, left the machines intact and operational and dispatched the humans—just like the enhanced radiation weapon, or neutron bomb.

America would recover, of course, and one of the key long-term decisions that helped was Paul Volcker’s interest-rate hikes, which tamed inflation but did no political favors for Jimmy Carter at the end of his term or for Ronald Reagan in his first years in office. American workers’ real wages dropped more than 10 percent from 1978 to 1982, and during the recession of 1981–1982 US unemployment figures approached 11 percent.²¹

In the spring of 1981, Reagan was confident that his economic stimulus from tax cuts and ratcheted-up defense spending would reinvigorate the American economy. But he did not believe America was operating from a position of economic and military strength when it came to dealing with the Soviets. Indeed, the two top administration priorities in 1981 were to cut taxes and to ramp up defense spending. It was not at all clear at the start of that year that Reagan would even take an active role in foreign policy. Certainly, it was not clear to his own secretary of state, the assertive Alexander Haig, who expected to be the vicar … of foreign policy.²²

Nevertheless, Reagan reached out to his Soviet counterparts, beginning with a letter to Leonid Brezhnev shortly after John Hinckley’s assassination attempt on March 30. The president reminded the Soviet leader of their introduction in California a decade earlier: When we met I asked if you were aware that the hopes and aspirations of millions and millions of people throughout the world were dependent on the decisions that would be reached in your meetings [with Richard Nixon], after which you took my hand in both of yours and assured me that you were aware of that and that you were dedicated with all your heart and mind to fulfilling those hopes and dreams. Now was the time to act upon this pledge to help foster peace, Reagan urged. It is in this spirit, in the spirit of helping the people of both our nations, the president went on to write, that I have lifted the grain embargo. Perhaps this decision will contribute to creating the circumstances which will lead to the meaningful and constructive dialogue which will assist us in fulfilling our joint obligation to find lasting peace.²³ Reagan followed up with subsequent letters that fall and amid the imposition of martial law in Poland that December. By the spring of 1982, he hoped for a potential summit with Brezhnev—or at least a meeting on the sidelines of the upcoming United Nations Conference on Disarmament in New York City.

In other words, Reagan wanted to engage the Soviets from the very start of his administration, even as he embarked upon a military buildup and told the British Parliament in June 1982 about the march of freedom and democracy which would leave Marxism-Leninism on the ash-heap of history as it has left other tyrannies which stifle the freedom and muzzle the self-expression of the people.²⁴ Yet it also confounded him that Soviet leaders would not respond more constructively to private letters he sent in between tough public statements. Hard-liners such as Caspar Weinberger, William Casey, and William Clark, who had known the president a long time, discouraged Reagan’s entreaties to Soviet leaders. They clashed with Secretary of State Al Haig, who, bombast notwithstanding, was more attuned to trans-Atlantic partners’ concerns. Reagan rarely gave clear orders, and he did not intervene to halt the bickering among his top advisers. In the fall of 1981, the president called up a respected Washington journalist to deny that personnel changes were to be expected. Alexander Haig was the best Sec. of State we’ve had in a long time, the president recorded in his diary after the call.²⁵ He summoned his secretary of state and national security adviser and ordered a halt to the sniping.²⁶ This was about as clear as he got.

Shultz’s Engagement; Reagan’s Engagement

By July 1982, Al Haig had alienated everyone in the administration and lost the president’s confidence. He was replaced by George Shultz, a highly respected veteran of the Nixon administration. Shultz was not a traditional diplomat, but he was a skilled and patient negotiator. He loved telling the story of his first political crisis, a labor dispute left over from Lyndon Johnson’s presidency. Johnson had invoked the Labor Management Relations (Taft-Hartley) Act of 1947 to stop the