Chapter 2. The dual conflict in Iran

 

 

To explain the recent events in Iran one should go back to the early 1950s when the nationalist leader Mossadeq was overthrown by an Anglo-American coup, which was launched (not unlike today!) with massive demonstrations in Tehran that were paid by the CIA, as it was revealed by itself![1] The Shah’s regime – which, with massive support, in terms of security equipment and training, by the Western elites and especially the US elite, lasted for over a quarter of a century– was one of the most tyrannical regimes in history, managing to amass against it an enormous grassroots movement consisting of Islamists, modernizers, as well as supporters of all sections of the Left, from reformist Left up to revolutionary Left and Guevarists. However, given the balance of power prevailing at the time, this mass movement gave the power to the Islamists under Ayatollah Khomeini. This was not surprising if one takes into account that by the end of the 1970s the socialist movement in general was in decline and that the repression of the fiercely anticommunist Shah regime was mainly directed against the communist Left, making easier for the popular anger against the regime to be expressed through the mosque.[2] At the same time, the clergy had every reason to turn against the Shah’s regime, which was blamed for its systematic attempt to modernise the country through a process of Westernisation and secularisation, readily adopted by the flourishing middle strata of the bourgeois class and utterly rejected by the lower social strata, which have benefited very little, if at all, by the modernisation process and the huge oil revenues which were pocketed by the oil multinational companies and the ruling elite in Iran.

 

So, the present events in Iran could fruitfully be explained in terms of a dual conflict:

• the first conflict refers to the old struggle between the West-oriented modernizers (mainly from the upper and middle strata of the bourgeoisie) and the Islamists;

• the second conflict refers to the new struggle–which developed within the regime itself following the death of Ayatollah Khomeini–between fundamentalists of the revolution and “reformists” (or, as the transnational elite and the media controlled by it put it, between “conservatives” and “progressives”!)

The old conflict between Islamists and bourgeois modernizers

 

The first conflict characterised the entire period following the Second World War and intensified after the establishment of the Shah’s regime, in proportion to the parallel emergence of the “Islamic revival”, i.e. the revival of the Islamic religion throughout the Muslim world, which began roughly sometime in the 1970s as part and parcel of a general movement towards irrationalism that in countries in the periphery like Iran, but also in the semi-periphery like Greece, and the centre like USA, took the form of religious irrationalism, for the reasons I explained elsewhere.[3]

 

It is therefore clear that the Islamists who took over in Iran were not the usual brand of (irrational) conservatives, who constitute the religious zealots all over the world, but were playing in fact a role similar to that of “liberation theology” in Latin America, which tried to combine the humanistic preachings of Christianity with the socialist principles of social justice—inevitably drawing the condemnation of the church hierarchy, which, as has always done, played the role of supporting the status quo, directly or indirectly legitimising it in the eyes of the oppressed peoples.

 

Thus, the “first generation” Iranian Islamists around Khomeini declared not only the need for a theocratic regime but also, and principally, the need to break the dependence on the West, which implied a policy of support for the national liberation movements against the transnational elite in the Arab world and elsewhere. Τhus, Khomeini became a "champion of Islamic revival" and unity, emphasizing issues uniting Muslims e.g. the fight against Zionism and imperialism. Furthermore, he embraced international revolution and Third World solidarity, giving it precedence over Muslim fraternity. No wonder that from the time Khomeini's supporters gained control of the media until his death, the Iranian media "devoted extensive coverage to non-Muslim revolutionary movements (from the Sandinistas to the African National Congress and the Irish Republican Army) and downplayed the role of the Islamic movements considered conservative, such as the Afghan mujahidin."[4] At the same time, his aim seemed to be that Iran should play the role of a “third pole,” independent from both the Eastern and Western blocs.

 

But, even at the economic front, the Islamic revolution under Khomeini systematically attempted, mainly, through social benefits and social protection, but also through major nationalizations, to achieve a redistribution of economic power and wealth from the new bourgeois class (which was created by the Shah and was inspired by Western values of human rights, etc.) to the lower social strata. Thus, immediately after the 1979 Revolution and the outbreak of the Iran-Iraq war (1980-1988) –which was instigated by the transnational elite in its first attempt to smash the Islamic regime[5]– over 80% of Iran's economy came under state control in a kind of social market economy combining central planning with a socially controlled market economy. As an extensive academic study on the Iranian economy shows[6]:

The revolution’s leader, Ayatollah Khomeini, repeatedly declared that the revolution belonged to the disinherited (mostazafan) and the barefooted (paberehnegan), and promised large scale redistribution of income and wealth. The Constitution of the Islamic Republic of Iran is quite explicit in committing the government to provide for the poor. Article 29 considers it a person’s right to have access to “social protection in retirement, unemployment, old age, disability, which the government is committed to provide”…Perhaps the most gain in the quality of life for the poor has been in access to basic services, such as electricity and safe water. These improvements in welfare are closely related to improvements in health, fertility, and education outcomes which have been documented elsewhere…Wide ranging expropriation and nationalization in the name of the poor helped qualify the 1979 change of regime as a social revolution.

The conclusions of this statistical study–based on extensive survey data in unit records on household and individual expenditures for a thirty year period extending from before the 1979 Revolution to 2004–are that “the comparison of economic welfare for the poor before and after the Revolution shows a general improvement with much lower poverty and no increase in inequality”. Furthermore, publicly provided basic services, such as electricity and safe water, have made it possible for the poor to own home appliances and for public health and family planning services to reach poorer rural and urban areas, whereas Investments in public health have resulted in substantial declines in infant mortality and lower fertility. The study shows that poverty has declined substantially compared to the years just before the Revolution, and that the poverty rate (defined as the proportion of individuals under $2 per day) has been in the single digits in this decade, which is quite low by the standards of developing countries, and one-eighth its rate before the Revolution. The proportion of individuals under $2 per day is 7.2 percent in Iran, which is lower than in Malaysia, Mexico and Turkey, whose average incomes are the same or higher than Iran’s. Not surprisingly, Iran’s poverty rate is considerably lower than the poorer countries of China, Egypt, India.

 

The economy of Iran, according to Article 44 of the Constitution, was divided into three sectors–state, cooperative, and private–and was to be based on systematic and sound planning. The state sector included the publicly owned and administered sectors that would comprise all large-scale industries, power generation, foreign trade, the banking sector, the communication sector, etc. The cooperative sector included cooperative companies (Bonyads) and enterprises concerned with production and distribution, and the private sector consisted of those activities concerned with construction, agriculture, animal husbandry, industry, trade, and services that supplement the economic activities of the state and cooperative sectors. However, the private sector, particularly under the reformist administrations, kept expanding all these years at the expense mainly of the state sector.

 

Therefore, the fact that the economy was neither a socialist one, nor a proper market economy system, inevitably led to serious problems with an initial sharp rise in absolute poverty. This was intensified by the “flight of human capital”, i.e. of the privileged social strata under the previous regime of entrepreneurs, professionals, technicians, and skilled crafts people (and their capital!) who emigrated en masse after the revolution and the Iraq-Iran war, and began to return only after the reformists took over, following the end of both the war and the Khomeini era. It is not therefore surprising that students—usually the offspring of the privileged social strata– and bourgeois women living in the luxury northern Tehran suburbs, played a leading role in the recent demonstrations, which were massively promoted by the Western media. As far as women are concerned in particular, it is worth noting that despite the Western black propaganda about the deterioration of the place of women in society, in fact, Iranian women have only one main similarity with Afghan women under Taliban: the authoritarian Islamic restrictions on their clothing. Otherwise, the social position of Iranian women has been vastly improved under the revolution, as shown by the fact that more than 62% of new university entrants are women and that 62% of women in rural communities can read and write (compared with17% in 1976).[7] The overall literacy rate jumped from 58% to 82%, with the figure for females – 28% in 1979 – tripling, and with the total of university graduates, which stood at 430,000 in 1979, growing nine-fold since then.[8] And yet, the transnational elite and its acolytes in the reformist Left dare to talk about the authoritarian nature of the Islamic regime at the very moment when they are blessing (or keep quiet about, respectively) regimes which are equally if not more authoritarian, like that of their friend Mubarak in Egypt, which hardly have any similar record to show on social spending!

 

The new ‘internal’ conflict between revolution fundamentalists and reformers

 

The second conflict is intra-regime and began immediately after the death of Ayatollah Khomeini. It is a conflict between, on the one hand, the revolution fundamentalists who declare their determination to keep the regime within the contours defined by the revolution both at the political and the economic level (not accidentally, Ahmadinejad, since his first election in 2005, has moved quickly to solidify his political base into a wider social movement which was described as “the second wave” of the Islamic Revolution) and, on the other, the “reformists”. The latter want to maintain the Islamic regime, (from which they get too many benefits!) turning it however into a kind of Shia Saudi Arabia, namely, into a fully integrated part of the internationalised market economy—an essentially client regime of the transnational elite.

 

Τoday, the fundamentalists are expressed by the majority of senior clerics, who in turn determine the policy to be followed on external and internal matters not just by the president Ahmadinejad but even by the supreme leader Ayatollah Khamenei, the successor of Khomeini.

 

The “reformers” are expressed by Ayatollah Rafsanjani (who became very rich thanks to the revolution of '79), the former reformist president Khatami and part of the clergy, who–with the full material and moral support of the transnational elite and the international media controlled by it– backed their chosen Mousavi in the elections. Musavi is an opportunist who, as prime minister from 1981 to 1989, had a reputation as a hardliner radical who was close to Ayatollah Khomeini and backed the system of extensive state control favoured by his mentor[9] but who turned today to a reformist, sensing that this is where the wind now blows! Mohsen Makhmalbaf, the film director and now Mousavi's spokesman, put it, perhaps inadvertedly, right when he said: "Previously, he was revolutionary, because everyone inside the system was a revolutionary. But now he's a reformer. Now he knows Gandhi – before he knew only Che Guevara”.[10]

 

As regards the transnational elite’s stand with reference to the dual conflict, there is no doubt that its ultimate aim on Iran is a client regime controlled by the bourgeois modernisers, which would replace the Islamic regime. However, it seems that recently the same elite, exploiting to the full the “Obama effect”, have adopted a strategy of “regime change by stages” and only if this proved unsuccessful they would proceed to military action (possibly through its Zionist bulldog) with the aim of immediate regime change. According to this phased approach, in a transitional phase, the transnational elite would accommodate itself with a reformist Islamic regime, which would adopt a more conciliatory position on the nuclear issue and, particularly, would cease supporting the national liberation movements like Hamas, Hezbollahh, Jihad etc., (unsurprisingly, Mousavi’s campaign was critical of the level of support given to Hezbollah and Hamas!)[11] on the hope that their inevitable wear would open wide the way to the bourgeois modernizers in the next stage.

 

So, following the end of the Iran-Iraq war in 1988, there have been profound changes in the Iranian institutions and values, which have been associated, first, with the presidency of Rafsanjani (1989-1997), who advocated a free market economy and pursued an economic liberalisation policy, and then continued under the presidency of another reformer Mohammad Khatami (1997-2005). It is worth noting at this point that although Khatami stood in the 1997 elections as a reformist, yet he beat the Supreme Leader’s candidate in a victory which, as characterised by an ex Iranian parliamentarian, would have been unthinkable in most of the Middle East, where only the official candidate ever wins”.[12]

 

The neoliberal policies introduced by Rafsanjani (1989-1996) and continued by his successor Khatami (1997-2005) marked the gradual shift of the social agenda from distribution to growth. The reforms, which included the privatisation of state-owned businesses and the liberalisation of overseas trade, encouraged people “to grow rich and build the economy, leading to a curious confusion of state and private sectors – and to the impoverishment of the least well-off”.[13] Thus, the majority of Iranians have been hit by a decade of financial crises, dwindling buying power and increasing money problems. At the same time, the moral values that used to predominate, especially religious ones, have lost ground and a minority emerged who were not afraid to display their wealth–an attitude that was encouraged by the government of President Rafsanjani in the early 1990s, which invited Iranian entrepreneurs who had gone abroad to come home and rebuild their country.[14] As Rafi-Pour, an Iranian writer concluded, “values based on materialism and wealth have triumphed”.[15]

 

The economic reforms, although specifically encouraged private enterprise, failed to significantly privatise the economy, presumably under pressure from the fundamentalists who prevented any significant reduction of the considerable level of social protection offered through subsidies and the labour market. The overall effect of these reforms, therefore, was as Ramine Motamed-Nejad points out[16] that:

the state has withdrawn from many branches of the economy, so this is not a form of state capitalism. Nor is it market capitalism. It’s more like monopoly capitalism, since these groups can sidestep fiscal, commercial and financial constraints while making it difficult for new entrants to gain access to the market.

However, as it was to be expected, the neoliberal reforms also created a new economic elite. Thus, a 1994 parliamentary report found that ownership in more than 50 companies had been tranferred to their directors for nominal sums, in contravention of legal requirements. Furthermore, this process of transfer of ownership was made possible through loans from the National Industries Investment Company – in other words, it was public money which made the former directors of state-owned companies de facto members of the new economic elite. Similarly, the liberalisation of foreign trade became another source of huge profits, with a merchant elite being created of importers and exporters, the former controlling the import and distribution of food, manufactured goods and pharmaceuticals, and the latter exporting some of the country’s energy production – which is still supposed to come under the monopoly of the National Iranian Oil Company (NIOC). Needless to add that the new elite created by the regime have formed large industrial, commercial and financial holdings, exploiting also the financial privileges they have been granted by various public and semi-public institutions. Clearly, this new elite had every reason to promote Mousavi in the last elections and it obviously played a key role in this process.

 

At the other end of the social scale, the neoliberal reforms introduced by Rafsajani and Khatami and particularly the privatisations have led to a significant rise in open and disguised unemployment– as everywhere in the world– and, in the Iranian case, to a parallel sharp rise in inflation. Unemployment, as usual, was the result of capitalist efforts to improve competitiveness and profitability at the expense of labour (despite the pro-labour legislation that the Islamic revolution had introduced). Thus, as the same academic study mentioned above put it[17]:

When the economic reforms began in the early 1990s, about 60 percent of wage and salary workers were employed in the public sector, compared to 40 percent in 2004. Public sector jobs offered more security and were coveted often despite lower pay. Labour market regulations intended to make private sector jobs more secure have failed in practice as employers have shifted to offering short term contracts and part time work. Significantly, an early move by the Ahmadinejad government was to prevent short term employment contracts in state owned companies. The reform of foreign trade in recent years, which ended non-tariff barriers and lowered the average tariff rate, have increased competitive pressures from East Asia on some sectors of Iran’s economy, notably textiles, and reduced job security for lower skilled workers. These competitive pressures have worsened with increase in oil revenues which have opened the gates to cheap imports from East Asia.

On the other hand, inflation was the inevitable result of the regime’s attempt to combine various administrative controls on the markets (which were introduced by fundamentalists for social policy purposes, mainly, during the Ahmadinejad period) with the neoliberal reforms (which were introduced, mainly, by the reformers during the Rafsajani-Khatami periods with the aim to liberalise the markets), despite the intrinsic incompatibility between administrative controls and neoliberal reforms. Furthermore, the economic sanctions–imposed initially by the US regime since the Tehran embassy hostage crisis almost 30 years ago but recently expanded and extended by the entire UN security council, after the transnational elite had managed to force Russia and China to toe its line on the nuclear issue– are increasingly having an impact on inflation.

 

No wonder that in the 2005 presidential elections the lower social groups moved away from the reformists. Here is how Alexandre Leroi-Ponant described the process in Le Monde Diplomatique[18]– not exactly a radical newspaper, which keeps calling the revolution fundamentalists “conservatives”!:

Under Mohammed Khatami’s two presidencies (1997-2005), the upper and middle classes had prospered. A fixed US dollar exchange rate, soaring house prices and civil service pay rises in a country with a bloated public sector all contributed to their prosperity. But inflation shot up to about 20% and the poor grew poorer; as their purchasing power evaporated they were lectured on the merits of a “dialogue of civilisations”. A de facto alliance between the poor and the conservatives coincided with a return to hardline Islam and resulted in the election of Ahmadinejad, who had attacked the rich and promised a better life for the poor. The poor and the conservatives also had the support of Ayatollah Khamenei, who believes that the reformists advocate secular policies and oppose Iran’s guiding principle of velayat-e faqih.[19]

Clearly, the supreme leadership of Khamenei was hardly compatible with Rafsajani’s and Khatami’s reformist presidencies. This, despite the fact that, Khamenei as president under Khomeini from 1981 to 1989, was known as an economic liberal and a proponent of a stronger private sector, but as successor to him in the post of supreme leader after Khomeini’s death in 1989, he has emerged as an arch-fundamentalist with strong anti-Western views.[20] It is not therefore surprising that Khamenei, who was opposed at both legislative and executive levels by the reformists, was determined to get control of legislative and executive power, something that he achieved after the 2004 parliamentary elections and the 2005 presidential elections with the election of Ahmadinejad, which were not disputed at the time, presumably because the transnational elite had not yet consolidated its position in Iraq, as at present. When, therefore, Ahmadinejad took over the presidency in 2005 he launched a far-reaching reorganisation of power in the state machine in a kind of purging of the reformists—a fact that could easily explain their present anger when the recent elections did not produce the result that would bring them back to power, as they expected.

 

At the same time, the new middle class, as long as it was profiting from the high oil prices during the first Ahmadinejad presidency, kept quiet. However, following the eruption of the present world crisis and the consequent tumbling of the price of oil, they felt free to express their anger against the fundamentalists whom they blamed for the deterioration of their economic position.

 

On the other end, although the living standards of the underprivileged have also fallen, their poverty is not comparable with any other country in the region, including India, Afghanistan and Pakistan. A significant factor for this is the state’s distribution network, and the state subsidies on oil, bread and some other staples.

 

 [ Jump to the next Chapter: The 2009 Elections ]

 

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[1] Dr. Donald N. Wilder, “Overthrow of premier Mossadeq of Iran: November 1952-August 1953,” Clandestine Service History, CS Historical Paper No. 208 (Date written: March 1954, Date published: October 1969). http://web.payk.net/politics/cia-docs/published/one-main/main.html

[2] See Dilip Hiro, “The Clash of Islam and Democracy in Iran”.

[3] Takis Fotopoulos, “The Rise of New Irrationalism and its Incompatibility with Inclusive Democracy,” Democracy & Nature, Vol. 4, Nos. 2/3 (issue 11/12) double issue (1998).

[4] Olivier Roy, The Failure of Political Islam (Harvard University Press, 1994) p. 175.

[5] According to a court statement by a former NSC official, President Ronald Reagan decided that the United States "could not afford to allow Iraq to lose the war to Iran", and the United States "would do whatever was necessary to prevent Iraq from losing the war with Iran (see statement by former NSC official Howard Teicher to the U.S. District Court, Southern District of Florida –cited in the wikipedia entry on Iran-Iraq war). This policy was formalized by Reagan who issued a National Security Decision Directive ("NSDD") to this effect in June 1982.

[6] Djavad Salehi-Isfahani, "Revolution and Redistribution in Iran: Poverty and Inequality 25 Years Later", Department of Economics, Virginia Tech (Version August 2006). http://www.filebox.vt.edu/users/salehi/Iran_poverty_trend.pdf

[7] Bernard Hourcade, “Iran: a spring of change”, Le Monde diplomatique (February 2004).

[8] Dilip Hiro, “The Clash of Islam and Democracy in Iran”.

[9] Simon Tisdall, “Iran's old rivals renew their battle”, The Guardian (18/6/2009).

[10] Mohsen Makhmalbaf, “I speak for Mousavi. And Iran”, The Guardian (12/6/2009).

[11] Seumas Milne, “These are the birth pangs of Obama’s new regional order,” The Guardian (18/6/2009).

[12] Ahmad Salamatian Iran’s stolen election, Le Monde Diplomatique (July 2009).

[13] Ramine Motamed-Nejad, “Iran: money and the mullahs”, Le Monde Diplomatique (English edition) (June 2009).

[14] ibid.

[15] Faramarz Rafi-Pour, Development and Contrast: Essays Analysing the Islamic Revolution and Social Problems in Iran, Entechâr Publishers, Tehran, 1998 (in Persian). Quoted by Ramine Motamed-Nejad.

[16] Ramine Motamed-Nejad, “Iran: money and the mullahs”.

[17] Djavad Salehi-Isfahani, "Revolution and Redistribution in Iran: Poverty and Inequality 25 Years Later". http://www.filebox.vt.edu/users/salehi/Iran_poverty_trend.pdf

[18] Alexandre Leroi-Ponant, “Iran’s new power balance”, Le Monde Diplomatique (December 2006).

[19] The doctrine of velayat-e faqih (guardianship of jurisprudence) gives enormous powers to the mullahs and was at the centre of Ayatollah Khomeini’s thought, albeit contested by many other Ayatollahs.

[20] Simon Tisdall, “Iran's old rivals renew their battle”.