As shown in Chapter 1, first-wave neoliberalism in the 1980s was
interlaced with the geopolitical imperative to stop the spread of
communism and socialist developmentalism in the Third World.
Reagan, as we noted in the case of Grenada, intervened in regional
conflicts, openly or covertly supporting guerrilla movements to
overthrow Soviet-sponsored regimes based on their supposed
‘ideological threat’ to the US and its allies. The President came to
understand that the most devastating blows against the USSR
were dealt by his support of counter-revolutionary movements
enjoying Soviet aid in different parts of the world. Two more
examples of this strategy were Reagan’s effort to topple the socialist
Sandinista government in Nicaragua and his response to the
Soviet invasion of Afghanistan. Here, rather than confronting the
Soviets head on, Reagan ordered a steady stream of armsshipments to Afghanistan in support of their opponents, the
Islamist ‘freedom fighters’ (mujahideen). Preoccupied with
deepening economic problems at home, the Soviet regime found
it impossible to continue spending 40% of its annual budget to
fund their Afghan War. Eventually, the Soviets were forced to
withdraw and Reagan claimed victory. Fought on openly
ideological grounds, these proxy wars in the global South were
carefully selected to prove the superiority of free-market capitalism
to the rest of the world.