This dissertation puts forth a new interpretation of the collapse of communism and the end of the Cold War by examining the energy and financial markets that developed in the wake of the 1973-74 oil crisis. Drawing on newly released archival documents from both public and private archives throughout Europe and North America, it places the history of communist and capitalist states in the 1970s and 1980s in comparative perspective. The intertwined histories of oil, sovereign debt, and austerity touched every society on both sides of the Iron Curtain after the oil crisis. Energy and financial markets forced governments to impose economic and social restraint on their own societies, so the survival of political regimes and governing ideologies in both East and West came to depend on governments’ ability to impose discipline. Governments that could successfully impose discipline without inviting a destabilizing social backlash survived; those that could not, collapsed. Thus, this dissertation proposes that the end of the Cold War was fundamentally different from its beginning. The competition between democratic capitalist states and state socialist regimes began as a race to expand the social contracts that prevailed in their societies, but it ended as a competition to discipline their respective social contracts. The Cold War, in other words, began as a race to make promises, but it ended as a race to break promises. Explaining the peaceful and abrupt end of the Cold War has long been a significant challenge for historians. Some have focused their explanations on the unique role played by Soviet General Secretary Mikhail Gorbachev and, to a lesser extent, U.S. President Ronald Reagan. Others have focused on the role of civil society and non-violent protest in spurring the revolutions of 1989. In contrast, this dissertation contends that the peaceful end of the Cold War was primarily the product of socialist states’ desire to gain political legitimacy through democratic elections in order to implement economic and social discipline. Through detailed case studies of the collapse of the communist regimes in the Soviet Union, Poland, Hungary, and East Germany, this work demonstrates that the pressure to implement austerity in communist states significantly explains why communism collapsed and the Cold War ended peacefully.