Revolution #169, June 28, 2009

Excerpts from:

An Assessment of the Momentum Towards War Between the United States and Iran: Causes and Potential Ramifications

Preliminary Findings by a Working Group
June 2008

INTRODUCTION

Below is an excerpt from the report of preliminary findings from a working group on "An Assessment of the Momentum Towards War Between the United States and Iran: Causes and Potential Ramifications,” which specifically analyzes the Islamic Republic of Iran. These preliminary findings were prepared in June of 2008. In addition to and intersecting with the factors described below are two additional salient developments since then that would be important to consider: 1) The impact of the global financial crisis on the oil sector of Iran; and 2) The impact of Obama’s offer on the one hand to negotiate with Iran and to even recognize "Iran's right to pursuing peaceful nuclear energy potential" while at the same time continuing the Bush administration and Israel’s theme that Iran's objective is to develop nuclear weapons and therefore giving an end of the year deadline for that to cease.

The Islamic Republic of Iran (IRI)

The regime has demonstrated significant resilience. One commentator listed the challenges it has endured to date—the long war with Iraq where all the major powers sided primarily with Iraq, natural catastrophes, persistent actions by the U.S. to isolate and vilify the regime etc.—and concluded that it has been able to cope with “everything short of the plague.”

Iran remains a dependent and oppressed nation within the framework of, and subordinate to, world imperialism. But within that, due to a combination of factors, it has acquired greater maneuvering room and geopolitical reach. Chief among these factors are its extensive oil and natural gas reserves in combination with its coherent, ideologically driven, deeply rooted, and far reaching (within Iran and elements beyond, especially regionally) state institutions and structure.

The regime exhibits a high degree of reactionary, ideologically driven coherence. There is a tremendous amount of centralization of power in the government, including in the “Supreme Leader” and other key institutions.¹ And on the basis of harsh repression and in connection with state-Islamic welfarism and the regime’s ability to forge a base of support among sections of society, the regime has achieved relative stability up until now. But the structure and nature of this regime contains within it the seeds of severe contradictions. There is what we have called an extreme “brittleness” that portends potential splintering, including in the top ruling circles.

The social formation of Iran today is overall an amalgam of semi-feudal and capitalist relations of production within which capitalist relations are dominant but confined within and fettered by theocratic political and social structures. The majority of economic activity, especially of any significant scale, is state run and controlled. The heart of the economy and its most dynamic factor is petroleum. But the Iranian economy is marked by a bloated, inefficient state sector and actual over-reliance on oil—something which most analysts, including the neocons, consistently point out.

In short, the IRI is a “theo-hegemonic” state system, sitting atop a complex and dependent economic structure in which the state-capitalist oil sector occupies a central position.

This high degree of theocratically cohered centralization also encompasses a system of sub-institutions that are integrated and that function in a “feudal sort of way”—with their own networks of control, authority and commerce. This includes informal social networks but also a byzantine complex of “states within the state” (which have some international reach). These include the religious foundations (bonyads) that have come to dominate trade and the manufacturing sectors and that have morphed into huge holding companies. For example, one of these bonyads, the Ayatollah Khomeini Foundation, has more than 1.7 million employees.

Another institution that functions in a similar way is the Revolutionary Guard (IRGC, or Pasdaran) which was formed early after the revolution as an ideological, hardcore military arm to defend the revolution internally (the traditional armed forces were to protect the IRI from external threat). The IRGC is not only a key pillar of the armed power of the state. It has also steadily become more integrated into economic activities, developing its own commercial firms with privileged contracts in key strategic industries, including those related to defense. This has enhanced its patronage power and allowed it to cultivate its own constituencies. Which in turn has led to widespread corruption. Current and former IRGC members are stepping more and more into central political roles in the regime (described as a “silent coup” by some). The IRGC totals 125,000 men, but is estimated to effectively control over one million employees.

An important feature of this theo-hegemonic state system, and very much connected with what has been described above, are significant elements of an “Islamic welfare state.” This fits in with the IRI’s ideological agenda and also serves to undergird the regime’s legitimacy, solidifying and extending its base of support. But this is also a fetter on capitalist modernization. State-Islamic welfarism is facilitated by oil revenue but is also a drain on Iran’s oil revenue. The regime has historically subsidized essentials such as food and gasoline, but in the last year or so it has increasingly cut back (and this has had dire consequences for sections of the masses). This welfare system is an additional source of corruption within the regime. This, in conjunction with the oppressiveness of this society overall as well as the increasing downward trajectory of this Islamic welfare state’s ability to deliver on the basic needs of the masses, contributes to the growing antagonism between the masses and the regime as well as intra-ruling class conflict.

The corruption associated with the “states within the state” (like the bonyards) and the functioning of the Islamic welfare state impart another distinct feature to the IRI: a kind of “theocratic-crony capitalism.”

While the regime does have relative independence and control over an extensive oil sector and associated spheres of operation, this is again all grounded in and subordinated to the capitalist world economy. A big contradiction for the IRI is the need to modernize and attract investment, including in relation to its dynamic energy sector (This energy sector is also relatively and seriously inefficient viewed on the world scale). All sections of the Iranian ruling class recognize the need to modernize to a greater or lesser degree. But there are different approaches to privatization and modernization, and this intersects sharply with issues of ideology and the economics and politics intertwined with all of that (as sketched out above).

There is a section of the Iranian ruling class that is fighting strongly for a neo-liberal program of privatization of state-run industries. Others are strongly opposed to this. And this contradiction also intersects with questions of social base and, to some degree, with different imperialist powers with which different sectors have traditionally been allied. There has been a move towards privatization, but for reasons beyond the scope of this discussion, this has occurred on a relatively minor scale (over the last ten years, about 200 state-run enterprises have been privatized). So these are expressions both of internal contradictions and divergent programs at the top.

Politically, most mainstream analysts break up the ruling circles into three broad camps. There are the “hard-liners” represented by Ahmadinejad and Ayatollah Yazdi. And many analysts put the Supreme Leader, Khamenei, in this camp. Its base is still more among the traditional and conservative classes, e.g., the very conservative Bazaari who are at the core of the bonyads, and a considerable if not the predominant section of the IRGC and basif.

Then there is what is sometimes called the moderates or “pragmatic conservatives” led and typified by Rafsanjani, who is often described as straddling between this “hardcore” and the third camp—the “reformers,” such as Khatami (president from 1997-2005). The “reformers” share with Rafsanjani, among other things, an aggressive program for neo-liberal transformation and have stood for a liberalization of society and curtailment of some of the power of the clerics. The reformers’ base is among various modern, urbanized strata including apparently some that are the product of these “peculiar institutions” of the IRI. Some analysts only speak of two camps, the conservatives and reformers, but there is something to this characterization of Rafsanjani as a “conservative pragmatist” straddling these two sections of the ruling class.

The IRI’s resilience is not simply a function of its centralized character but also its absorptive capacity. Different factions of the ruling circles have found a place within the system to operate; there is a certain “inclusiveness”. It is the “theo-hegemonic” character of the regime that is fundamentally setting the terms of the cohesiveness of the ruling elite. And it is this theo-hegemonic character that has enabled the regime, despite the contradictions and pulls and various pressures (economic, political, and military) flowing from Iran’s position in the region and the world as a whole, and intersecting with the need to hold on to power (both rule over the masses and preserving a relative functioning ruling group), that has contributed thus far to the regime’s ability to survive many challenges And yet this very coherence is also the source of extreme “brittleness,” especially with the sharpening of international as well as internal contradictions.

One way to understand the sharpness of this contradiction on the political level is that the “reform” faction argues that the regime needs to open up on a whole new level to the world, to attract capital and modernize large segments of the economy, and to limit the rule of the clerics and allow more air to breathe in Iranian society—or to risk losing it all. The “hardliners” argue the opposite—that it is necessary to tighten up, reassert even more strongly “core Islamic values”—or else there is the risk of the whole regime unraveling. The point is¼both factions are actually speaking to dynamics of the actual reality.

So, on the one hand, the regime has this absorptive and integrative capacity. On the other hand, its theocratic nature, and the power of its theocratic core, throws up political and economic barriers to modernization, deeper engagement with the world economy, and adapting institutions to profound demographic and social changes taking place in Iranian society.² But, again, it is precisely its theocratic nature that coheres the regime. This is what makes for the “brittleness” of the IRI.

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