The USSR had improper allocation of resources. Ronald Reagan figured that the USSR could not stand an arms race against the United States, so the United States built up its military. In response, rather than focusing on building up manufacturing and agriculture, the Soviets also built up their military. This improper allocation of resources led to an economic collapse, causing unrest among the people. Then, the liberal policies of Gorbachev encouraged people to speak out, protest, and eventually revolt against the Soviet Regime.