The Islamic Republic's Wishful Economy and Unresolved Crises

In recent years, there have been numerous heated discussions about the economy of the Islamic Republic. Leftists and communists consider the Islamic Republic's economy to be 'neoliberal,' while neoliberals label it as populist and socialist. One example of such debates was a written dialogue years ago between Yousef Abazari and Mosi Ghaninejad, where Abazari referred to Mahmoud Ahmadinejad's government as the most Hayekian government. It is clear that Ghaninejad, as a defender of Hayek and Milton Friedman, found such a claim entirely unacceptable. This debate is pursued with greater intensity in the intellectual backgrounds of these two, and generally within the left and right spectrum. Some use neoliberalism, liberalism, communism, and socialism as insults. For instance, Senator McCain said during his competition with Barack Obama that Obama intended to turn America into a socialist Europe and make us miserable. Donald Trump also used socialism as an insult, claiming that the Democratic Party had fallen into the hands of socialists who wanted to turn America into another Venezuela. The former military leader, Jair Bolsonaro, an extreme right candidate, stated after winning the second round of Brazil's presidential election: 'I will change the fate of the country. From now on, we can no longer tolerate the flirtation of socialism, communism, and extreme left.' Liberalism has been used as an insult in Iran for several decades. In fact, Iran's economy is state-controlled, oil-dependent, subsidized, rent-seeking, corrupt, unequal, and impoverishing. If these are characteristics of neoliberalism or socialism, then it should be classified as one of the two. However, it cannot be denied that most economists who have been the intellectual and practical sources for the governments of Hashemi Rafsanjani, Mohammad Khatami, Mahmoud Ahmadinejad, and Hassan Rouhani were not leftist or socialist economists. They were mostly attached to liberalism, and some to neoliberalism. Mahmoud Ahmadinejad explicitly regarded economics as a Western phenomenon and rejected it. However, the 40-year product of the Islamic Republic's economy is a state-controlled, oil-dependent, subsidized, rent-seeking structure that has systematized corruption and deepened class divides. Hassan Rouhani introduced four ministers from the economic sector (Economy and Finance; Industry, Mine and Trade; Roads and Urban Development; and Cooperatives, Labor and Social Welfare) to the parliament for a vote of confidence. On November 5, 2018, in defense of the proposed ministers, he stated: 'As your trustee and the trustee of the people, I say that I have thought, studied, and consulted for dozens of hours on each of the ministers introduced. Of course, in recent weeks, we have not had the accompaniment of istikhara (a form of divination). We invited some to work, and they said our istikhara came out bad. Istikhara was not with us. We invited some friends to work, and they accepted to work, but their voices were shaky, and they spoke with some hesitation, saying how they could work under these conditions and problems. I realized that with this shaky voice, they could not bear the burden in these circumstances.' Typically, those chosen for these responsibilities are economists or engineers, meaning they have been educated at universities and have studied more humanities. Combining technology with religious beliefs and even superstitions is not very difficult. However, combining the humanities—especially the somewhat worldly science of economics—with the unpredictable and mysterious matters is challenging. Hassan Rouhani claims to have offered the ministry to specialists—most likely economists—but they did not accept. The reason for their refusal was the istikhara and the unfavorable outcome of it. Is there anything more irrational than this? For these individuals, istikhara is neither a necessity nor a subsidiary of religion. Ayatollah Khomeini was a philosopher, mystic, jurist, and religious authority. Most of the jurists of the Islamic Republic take pride in being his students. All rulers of the Islamic Republic—even Ayatollah Khamenei—consider themselves his followers. Previously, Hashemi Rafsanjani mentioned that during the war, someone came to him and Khamenei claiming to be in contact with the Imam of the Time and that if they allowed him to meet Ayatollah Khomeini, he could get help from the Imam of the Time for victory in the war. When these two topics were discussed with Ayatollah Khomeini, he ridiculed such claims with three questions and even mocked the Imam of the Time. Ayatollah Khomeini did not accept the meeting and said: 'I do not accept these things and am very blind to these matters.' 'Oh, you charlatans! Stop your actions!' Mohsen Rezai, the commander of the IRGC during the war, went to Ayatollah Khomeini to request istikhara for starting a major operation. General Hossein Alaei stated in an interview on October 1, 2018, that 'one of our good and successful operations was Fath al-Mubin. Iraq attacked our first lines in Shush 48 hours before the operation began and disrupted our defensive lines, so the question arose: 'Should we operate or not?' I was the head of the Central Karbala Headquarters of the IRGC, and the ambiguity was so high that they were asking what to do. Mr. Mohsen Rezai and Martyr Syad Shirazi were also saying, 'We do not know.' Ultimately, it was concluded that it would be better to ask Imam Khomeini. Mr. Mohsen took a Phantom fighter jet to Tehran and met with the Imam, but the Imam did not give an opinion about whether to conduct the operation or not. Mr. Mohsen asked the Imam again to 'perform istikhara.' The Imam said, 'There is no istikhara; conduct your investigations and then decide.' When Mr. Mohsen returned to the headquarters, after discussion and consultation, it was decided to carry out the operation. Ayatollah Khomeini did not refer to the Imam of the Time for conducting the country's affairs, nor did he perform istikhara. He issued the order for the mass execution of political and ideological prisoners in the summer of 1988 without referring to the Imam of the Time or performing istikhara. However, Sheikh al-Islam, as Iran's ambassador to Lebanon, repeatedly performed istikhara for important decisions during the civil war in that country. It is clear that some economists are unwilling to cooperate with the government due to the interventions of Ayatollah Khamenei, the IRGC, military institutions, and Hassan Rouhani and Nobakht. However, Hassan Rouhani intended to place the blame on them with this statement. Nevertheless, Rouhani was also looking for ministers who would be obedient and aligned with Nobakht, lacking expertise. The decision to set the dollar at 4200 tomans by Hassan Rouhani was a) not scientific (based on economic science), b) not compatible with the economic realities of the past 40 years, and c) did not take into account the highly volatile environment after the US withdrawal from the nuclear agreement. It was an istikhara decision. Hassan Rouhani stated in parliament: 'Liquidity has always been a problem in our country. Before the revolution, if you calculate from 1962 to 1979, the average liquidity growth was over 25 percent. After the revolution, at various times, liquidity growth was sometimes 26 percent, sometimes 27 percent in the previous government, and in the eleventh government, liquidity growth was 24.4 percent, and in 1996, liquidity growth was 22.1 percent... I can almost say that we need to add about one trillion tomans to our liquidity growth daily.' Given the massive growth of liquidity and inflation over the past 40 years, how can the price of the dollar be suppressed? The price of gasoline in the past 40 years in Iran has also been an istikhara decision. This istikhara decision has led to a) extensive gasoline smuggling to neighboring countries, b) extremely high consumption of free gasoline, c) severe air pollution (with non-standard vehicles), and d) wasting hundreds of billions of dollars on energy subsidies. To remedy these issues, there is no way other than to free the price of gasoline. However, when there is a lack of courage for fundamental decisions in favor of the country and the people, istikhara becomes the basis for running the country. Yes, this is populism. However, this is wishful populism. It is true that liberalizing gasoline and dollar prices has caused inflation and increasingly harmed the poor classes. However, 'wishful populism' has not been and is not the solution to Iran's misery. The government can and should provide non-cash subsidies to the bottom five deciles of society—including workers and teachers—meaning it should meet their basic living needs. Positive discrimination is the solution to this issue. The price of energy and the dollar are just two examples of 'wishful populism.' Hassan Rouhani is the founder of reciting elegies in cabinet meetings. The country has enough elegy reciters so that the president does not need to seek to solve the shortage of elegy reciters. But more importantly, is the government a place for reciting elegies? Is reciting elegies the duty of the president? This is another example of 'populism.' Max Weber warned at the beginning of the twentieth century that modern empirical science has demystified and disenchant the world and society. He said anyone who cannot bear this world should return to the monasteries (religious seminaries, synagogues, churches, and mosques), which will welcome them well. Governments and authorities work with rational and calculative science. Members of the Islamic Consultative Assembly are also subject to 'wishful populism.' A religious government belongs to the mythical world. Transitioning from a clerical government that resorts to mysterious beings is a necessary condition for rationality and scientific thinking. Problems and issues of the country cannot be resolved with a clerical government. Ali Khamenei, Hassan Rouhani, and the other jurists should go to the seminaries for reciting elegies and performing istikhara; not only will no one oppose them, but everyone will pray for them as well. The opinions expressed in this note do not necessarily reflect the views of Radio Farda.