Book Review: Iran’s Historic Distrust of Foreign Powers

Editor’s Note:

The following is a book review by Reza Varjavand, associate professor of economics and finance at the Graham School of management, Saint Xavier University

by Reza Varjavand

Even though we still do not know for sure how we got to be on this planet, we have a long history of living on this earth, and any time archeologists discover one more skeleton, a few thousand years are added to human life.  However, no matter the length of our history, the record of our economic progress is relatively short.

During most of our history, we have lived under primitive conditions without much income disparity. Until the late 18^th century, we lived with very low income level for thousands of years. This implies that almost all of our economic achievements, wealth, and income creation must have advanced basically within the last two and half centuries. Before then, we all lived generally under similar economic conditions, and there were no developed and underdeveloped nations as well as no concrete standards for comparing the economic status of different nations. Over the last 200 years, for example, per capita income has escalated from an average of $500 to nearly $50,000 a year in the industrialized world. Such historical facts lead one to wonder as to what prevented us from growing economically for tens of thousands of years before the late 18^th century and whether those preventive barriers are still at play in some countries that remain poor to this day.

For instance, the evidence regarding gloomy economic conditions in Middle Eastern countries in general and Iran in particular is staggering. Even a scant examination of key economic indicators, especially those that are related to modern production mode, income, and wealth, reveal disappointing results about the standard of living in prominent Middle Eastern countries. These countries are typically impoverished. According to the available reliable data, not only is the level of income in Middle Eastern countries low when compared to Western standards, but the income gap between them and wealthier countries is wide and growing. Economic backwardness in a particular country can be understood by examining the country’s historical roots. In this vein, a recently published book by Dr. Hooshang Amirahmadi entitled The Political Economy of Iran Under the Qajars is designed to accomplish that kind of historical examination and uncover its resulting economic connections.

Dr. Amirahmadi’s book is about the historical events that caused the economic transformation in Iran from what the author calls “pseudo-feudalism” to “proto-capitalism” (1890 to 1926), characterized by the author as the “formative years” for the political economy of Iran. During this period under the Qajar dynasty, the Iranian economy underwent certain tectonic shifts. However, it failed to modernize and advance to what the author calls “development and manufacturing capitalism.” The central theme of Amirahmadi’s book is to examine the history of Iran’s political economy aimed at better understanding of the country’s current condition.

The author delves deeply into Iran’s historical developments, especially its relationship with other countries, Russia and England in particular, to describe why the country’s road to a democratic government and economic modernization was bumpy. As Amirahmadi explains in the introductory chapter:

The purpose of this study is to show that it makes more sense to use the political economy framework to periodize the Qajar rule in terms of the level of development of the productive forces, the corresponding social relations, the nature of imperialist interventions, class control addiction and struggles.

The author argues that the interplay of powers among influential elites including state officials, landlords, religious authorities, merchants, and usurers dominated and often detracted any plan to recondition the economy. The persistent pseudo-feudal state and the increasing intervention of imperialist powers, namely Russia and England, undermined domestic reformist forces. The earnest struggle of bourgeoning progressive forces against these adversarial obstacles could not help to advance the economy into an industrial state because of corrupt governments. In bed with oligarchs, as the author argues, the poliices resulted mainly in polarization and class struggle. Even though Iran tried to incorporate itself into the world economy by increasing its economic ties with other countries, such efforts resulted in trade deficits and further economic dependency.

Dr. Amirahmadi consistently places blame on the malevolent nature of the feudalist system that weakened Iran when it came to dealing with other countries, especially Russia and Great Britain. Besieged by foreign competition and lack of government protectionist policies, Iran’s traditional industries found themselves incapable of competing against their foreign counterparts.  Subsequently, Iran ended up with an import-dependent economy, even though “by 1890, a significant number of small-scale consumer goods industries were established domestically. However, in the next 25 years, every attempt to develop the industrial base for the economy was frustrated by the feudal state and foreign forces.”

The consequential accumulation of wealth and power in the hands of ruling elites and their government cronies further polarized Iranian society. The fading bourgeois class did not have enough purchasing power to support Iran’s domestic burgeoning industries. As the misery of the middle class continued, many of its deprived members were forced to migrate to other parts of the country, mainly the urban centers, in search of upward social mobility.  A feudal economy riddled with corruption disrupted the development of an industrial-based economy. With an underdeveloped proto-capitalism that depended largely on foreign suppliers for its survival and unable to compete with foreign forces, Iran’s economic leaders had no choice but to rely on agriculture and construction, the two industries that depend mostly on internal resources.

To make matters worse, Russian and British meddling extended into the political and social spheres. Numerous attempts by the middle class and the emerging intelligentsia to establish democracy and a manufacturing-based economy failed because of the obstacles that were created by a feudal system reinforced by foreign forces. “The gap between the political elite and the masses could only stifle attempts toward meaningful reforms.” According to the author, even nationalism, the rejection of foreign domination, and an emerging Iranian intelligentsia did not deter foreign countries from interfering in the country’s domestic affairs.

Dr. Amirahmadi aruges that even after the Constitutional Revolution and the installation of the Pahlavi dynasty, instead of cultivating independent-thinking politicians and intellectuals, “Iran continued to produce more politicized intellectuals than enlightened politicians.  It is no wonder that the country cannot break through the vicious circle of dictatorship, revolution, and chaos.” Such a tendency has obstructed any nationalism that could have helped a blossoming democratic regime and a better managed economic system.

In summary, Dr. Amirahmadi argues that the substandard economic conditions and the dictatorial regimes in Iran were largely the result of the interaction between the embryonic domestic forces that did not have much brokering power and the stronger external imperialist forces that tried to protect their vital interests by penetrating into Iran’s socio-economic and political elite. The major instruments of penetration into the internal affairs of Iran, according to the author, were “militarism, trade, treaties, concessions, subsidies, diplomatic and military missions, consular offices, trading houses and companies, capitalization, cash crop, raw materials production, local allies, corruption (bribery and thefts), loans and advances, and orientalism and freemasonry.”

In The Political Economy of Iran Under the Qajars, Dr. Amirahmadi argues equitably that the destructive impact on the economy of a country like Iran as a result of self-serving imperialist forces could not have happened overnight; rather it evolved through time. Therefore, the blame not only goes to the dominating forces, but the country being dominated has to share equal blame for allowing these forces to continue with their destructive manipulations. As the saying goes “fool me once, shame on you; fool me twice, shame on me.”

The book can help readers better understand why Iran remains wary of foreign influence and questions especially when negotiating with them. This cautious wariness and reticence make absolute sense when the historical context analyzed in this book is brought into consideration. Historical memory can be a powerful thing with long-term ramifications. A Persian proverb expresses this situation perfectly: “If you have been bitten by snake, you become afraid of a black and white rope!”