Market Socialism With Islamic Revolutionary Characteristics: How to Save Today’s Iran From The Fate of The Shah

Parallels ignored at the peril of Iranian patriots 

When looking at the present socio-economic conditions of Iran, one cannot help but recognise eerie parallels between 2018 and 1979. There runs a grave risk that some of the factors which initially led to the end of the Iranian monarchy in 1979 could now work to de-stabilise the very Revolutionary government that ultimately replaced it.

The better understand these parallels it is necessary to separate them with a brief overview of the situation today versus the situation in the 1970s.



Oil dreams and JCPOA dreams 

The combination of the so-called ‘peak oil’ phenomenon at the turn of the 1970s when augmented with the oil embargo of 1973 sent oil prices skyrocketing in the years prior to the Islamic Revolution of 1979. As a country that both benefited from the rise in oil prices as a significant energy producer with the added geopolitical benefit of being on good terms with the world’s largest energy consumer, the United States, Iran in the 1970s was in a crucial position to reap the benefits of geopolitical trends that it had no hand in causing.

In 1974, Iran’s last Shah Mohammad Reza Pahlavi gave a buoyant interview with a hostile English journalist where the Iranian leader claimed that by 1984, Iran would attain western European levels of wealth and would be keen to invest in Europe and elsewhere based on the windfall revenue from increased oil prices.

Similar promises of so-called trickle down wealth were made to domestic audiences, but ultimately a combination of corruption and mismanagement meant that while Iran was selling oil at top Dollar in the 1970s, it did little to being about the significant economic renaissance that was promised.

In 2015, Iran’s moderate government promised similarly dramatic positive changes to the material well-being of ordinary Iranians that the Shah did in the early 1970s. In spite of this, many patriotic Iranians today remain disappointed that the promises made at the time of the JCPOA (aka Iran nuclear deal) were not fulfilled. While some Iranians argue that while President Rouhani made these promises, they were frowned on by Supreme Leader Sayyed Ali Khamenei who allegedly took a less optimistic view on the JCPOA, the point remains that promises were made, expectations were high and now with the JPCOA seemingly on its last legs – the promises will not be fulfilled.

The grim mix of what is perceived (key word) as broken promises combined with the speculative reality that when US sanctions on Iranian energy exports strike in November of this year, the JCPOA will have been a failure insofar as it did not deliver its promised rewards to the people, remains a point that must be addressed with extreme urgency by Iran’s contemporary political class.



Uneven reformism 

The last Shah’s so-called White Revolution reforms were at best unevenly applied and poorly executed and at worse they were a total failure and cause of discontent. The White Revolution was intended to bring Iran’s economy and perhaps more important Iran’s social economy into the 20th century through a combination of liberalising workplace reforms, land reform, education reform and the augmentation of women’s rights.

The land reform programme is today seen as largely disastrous as it served only to alienate traditional landlords without providing satisfactory improvements for newly endowed small landowners and labouring peasants.

Likewise, while the White Revolution did increase the size of Iran’s urban middle class, many of these individuals felt that too many broken promises and too many false hopes held them back from what would have been possible had the Shah been able to deliver the western European living standards he had promised. While Iran’s new middle class was progressing at a snail’s pace, the opulent lifestyle of Iran’s ruling class was seen as offensive to the reasonable aspirations of Iran’s urban workers and businessmen.

Today’s elected officials in Iran suffer similar criticisms from fellow patriotic Iranians as did the un-elected Shah. Many see that in spite of both real and cosmetic efforts made to improve rural conditions and raise urban living standards, that youth unemployment, wage depression, lack of opportunities and too little innovation still persist.

Iran’s young realise that economic pressures from the US have contributed to many of these problems, but they are also aware that daily mismanagement is a problem the way it is in many countries, but at a level far more severe than Iran’s educated urban citizens are comfortable with.



Religion and modernity 

For religious figures, the Shah’s White Revolution was an assault on the country’s centuries of Islamic tradition while inversely, the Islamic Revolution of 1979 was a step away from modernity according to secularists. If there is any lesson that both Iran’s social hardliners and moderates can learn from the Shah’s reforms it is that the feelings of people must be taken into account at all times.

Here, a model for increased local control over religious laws in the public space would go a long way towards relieving tensions between those who want more religion in the public sphere and those who want less. In other words, if an urban area wanted to relax the current hijab (headscarf) laws, it could do so in line with the wishes of the people. Likewise, if rural areas wanted to maintain strict religious customs, they too would be allowed to do so. The same goes for the sales of non-ideological secular entertainment which many Iranians who have no desire to become Americanised nevertheless crave. If Japan is able to maintain its stick cultural homogeneity while allowing its people exposure to global sources of entertainment, there is no reason why Iran could not gradually move in this direction – thus giving young people a new source of leisure and preventing American’s anti-Iranian zealots from claiming victory in the soft-power infowar.

Such reforms could help ease tensions between moderate and hardline social factions by democratising the matter once and for all and turning what historically can be heated issues over religion versus secularism into a victory for Iranian democracy.



Beware alienating allies or being alienated by allies 

In spite of the fact that Iran’s last Shah was a staunch US ally, the Jimmy Carter Administration in Washington was notably colder towards the Shah than its predecessors. A combination of meddling criticisms of Iran’s internal affairs, followed by false promises and ultimately a failure to defend an ally, saw what monarchist Iranian’s today called an American betrayal even though subsequent US administrations have more than made up for this by working to undermine today’s legitimate Iranian government – often using the Shah’s offspring as a means to do so.

One of the flaws of the Shah’s thinking at the time was placing all of his geo-strategic eggs in one basket. By relying on the US without diversifying partnerships across the globe, the Shah placed himself at the mercy of a single superpower and when that superpower came to be ruled by a generally less than sympathetic Carter administration, he found himself isolated.

Today, Iran finds itself lined up against an incredibly hostile United States, while the European Union has proved itself incapable of standing up for its own interests in Iran (and by extrapolation the Iranian interest). By contrast, Russia, China and Turkey continue partnerships with Iran, while untapped partnerships in Pakistan, the central Asian Republics and south east Asia beckon.

However, just as Jimmy Carter refused to listen to pragmatism regarding his Iranian ally, today, it is Iran that seems to be walking on a thin line when it comes to Russia. Today, Russia and Iran have more open (from Russia’s perspective) disagreements regarding the Syria conflict than ever before. Sadly, instead of addressing these issues with an equal openness as Turkey and Russia have shown themselves capable of doing against all odds, Iran has instead often resorted to passive aggressive statements aimed at its Russian partner.

This reality is made all the more surreal when one realises that today (as has always been the case) Iran’s European JCPOA partners have vastly more (to put it mildly) disagreements with Tehran regarding the way forward in Syria than Russia has. Therefore, it makes little logical sense that Iran should procrastinate from reaching the kind of mutually honourable compromise with Russia over Syria that Moscow would welcome, while continuing to engage in positive dialogue with European governments that universally took a stridently anti-Iranian position in Syria and have all the while proven themselves impotent over salvaging the JCPOA in the age of Trump.

If Jimmy Carter took an ally for granted in 1979, today it is ironically Iran that in certain respects seems to take Russia’s partnership for granted. While Russian diplomats in 2018 are generally vastly less flippant than their US counterparts, alienating an ally at a crucial moment in the economic life of one’s nation is never a prudent course of action.



For every problem there’s a solution 

For many Iranians and international observers the legacy of Mohammad Reza Pahlavi was ultimately one of aloofness, extravagance at the expense of pragmatism and incredulity at a time when reality was starting to bite. Today’s Iran must likewise avoid a similar ethos.

The key to Iran’s economic and social revival at this point in history would be a wholesale revision of the domestic economy. A new set of young economic experts ought to be appointed to a ‘Council of Economic Revitalisation and Harmonisation’ that will work to transform Iran into a more efficient economy that allows for greater free enterprise at the level of small businesses and aspiring entrepreneurs. Rather than invest in security operations overseas that more powerful military players ultimately control, it would be better for Iran to invest these funds into the pockets of proven local business and innovation talent.  At the same time, the profits of industry should be regulated by the central government and carefully re-invested into new industries, public works, infrastructure and social programmes, but crucially without taking away too much profit incentive from the entrepreneurs themselves. If this model sounds familiar it is because this is the model that helped China to reduce its poverty rate from 88% in 1980 to under 2% today, while plans to eliminate poverty completely by 2020 now seem entirely within reach. It is called market socialism and when tailored to fit a given nation’s historic and cultural characteristics, it has proven time and again to be a winning formula for both developed and developing nations.

Likewise, Iran could benefit from adopting a more Chinese approach to foreign affairs which prioritises partnerships for peace through prosperity over direct interventions and economic stimulus to the security apparatus of foreign states – states which often have different long term agendas than Iran in spite of being allies. This is particularly true in the Arab world where in the long term, Iran stands to lose rather than make money by going overboard to help countries whose geopolitical fate will ultimately be decided by a combination of local factors within the Arab world, Russia and the United States. At a time of economic recession, Iran cannot afford to invest in supposed ideological partners when to Iran’s east, Iran’s potential win-win economic parties are waiting with an open door. Incidentally, if internal economic reforms when combined with the formation of new eastern and southern partnerships are successful, Iran will have even more to offer to the Arab world in terms of long term future sustainable investments in future years. China’s decades of diligent internal economic reform now allows Beijing to invest in parts of the world where a quick economic return is impossible, but that which in the long run will yield results. China is able to do this based on the strength of the domestic economy which allows China to take risks in investing in places that others are too afraid to touch. If Iran’s domestic economy was stronger and based on more sustainable growth formulas, in a few years time, Tehran’s contributions abroad could become more meaningful than many of Iran’s dead-end investments in the Arab world are today.

When it comes to a future trajectory for Iran’s foreign policy in a post-JCPOA and largely post-Daesh age, it is helpful to read the words of geopolitical expert Andrew Korybko who wrote the following:

“Therefore the only sustainable solution is for Iran to unapologetically embrace the Golden Ring of Multipolar Great Powers by redirecting its strategic focus eastward in response to the multifaceted challenges facing it on the western front in the aforementioned domains of its Mideast “sphere of influence”. It’s not to say that Iran should “surrender” its hard-fought influence in these countries, but just that it needs to reconceptualize its role in Eurasia and urgently begin exploring real-sector economic opportunities in the supercontinent in order to “balance” its hitherto ideologically-driven foreign policy that has yet to yield the profits that its people need in order to withstand this latest Hybrid War siege. The context of this latest coordinated effort at regime change is vastly different than what Iran experienced in the 1980s given the changed international (New Cold War) and domestic (economic and demographic) conditions, which is why a radical policy readjustment might be necessary”




At a time when Iran’s enemies are openly conspiring for illegal regime change, it is important for Iran’s political leaders to realise that the best defence against these provocations is the internal reform which will help to re-unite the nation in the promise of the prosperity that Iran has long deserved. A new economic system of market socialism with Iranian characteristics combined with a Chinese style clampdown on corruption and a more economically/less ideologically minded foreign policy can help to achieve needed change without surrendering Iran’s sovereignty nor religious and cultural characteristics. If states with a clear ideology including both China and the DPRK can act pragmatically, there is no reason why Revolutionary Iran cannot.

It would be supremely naive to think that drastic changes are not immediately required and furthermore,  such thinking is in no way anything less than patriotic. In fact, the opposite approach amounts to the kind of negligence which continues to haunt the legacy of the last Shah, both among his more honest supporters and among his many detractors.



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