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The main causes of the failure and collapse of the Soviet Union, a massive empire that spanned 11 time zones and that supported Marxist insurgencies around the world, were its highly flawed economic system and its outdated system of repression, both of domestic "dissidents" and of the populations of the so-called "satellite" nations of Eastern Europe.
The Soviet economy was based upon a distorted interpretation of Marxist ideology, one that overemphasized centralized control of all aspects of the economy irrespective of fundamental laws of supply and demand, and that, most importantly, emphasized military budgets at the expense of all other considerations save the welfare of the governing elite. The United States, during peak periods of the Cold War, including during the rebuilding of the U.S. Armed Forces during the Reagan Administration, spent around seven percent (and usually much less) of its gross domestic product on its military. In contrast, the Soviet Union, which enjoyed one of the largest gross domestic products in the world, devoted as much as 40 percent of its GDP to its military -- an extraordinarily high and ultimately unsustainable economic burden. Additionally, while it spared no expense on military hardware, it treated its military personnel very poorly, and the average Soviet soldier or sailor suffered from low morale as a result. It was that economic burden of extremely high military spending, however, that contributed considerably to the eventual collapse of the entire nation.
In addition to the military's burden on the Soviet economy -- and the Soviet regime was struggling to keep pace with the emphasis on rebuilding the American military by the Reagan Administration -- the Soviet Union collapsed because it overextended itself on foreign endeavors, such as support of anti-U.S. insurgencies across the Third World and its economic aid to flawed governing and economic systems in countries like Cuba. The financial cost to the Soviet economy of subsidizing, for example, oil and gas sales to Cuba and to its Eastern European satellites was as unsustainable as its emphasis on its defense budget.
Finally, the populations of Eastern Europe grew sufficiently tired of living under despotic totalitarian regimes imposed by the Soviet Union that they finally rebelled. Eastern European populations could see the enormous contrast between their standard of living and that of the democratic countries in Western Europe. Their growing willingness to risk their lives for freedom became too much for their own communist governments to restrain, leading to the demonstrations in Hungary, Czechoslovakia, East Germany, and other neighboring regions.
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