The Economics of the Downtrodden: Revolutionary Ideology and Practical Politics in the Islamic Republic of Iran

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The Economics of the Downtrodden:
Revolutionary Ideology and Practical Politics in the
Islamic Republic of Iran
William O. Beeman
Department of Anthropology
University of Minnesota
Minneapolis, MN 55455
wbeeman@umn.edu
Paper prepared for:
USC COLLEGE CONFERENCE
Iranian Economy at a Crossroads: Domestic and Global Challenges
September 18-19, 2009
Davidson Conference Center, University of Southern California

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The Economics of the Downtrodden:
Revolutionary Ideology and Practical Politics in the
Islamic Republic of Iran
William O. Beeman
Department of Anthropology
University of Minnesota
Minneapolis, MN 55455
wbeeman@umn.edu
Introduction
In this paper I do not attempt a statistical analysis of Iran’s economy, but rather
am interested in exploring the cultural dimensions of attitudes toward the economy, and
in particular the patterns of economic and resource distribution that pervade Iranian
cultural sensibilities.
In economic anthropology we assume from the outset that market economies are
only one form of human economic activity, and that even within those economies that
believe they operate according to the principles of the market, there are cultural
dimensions that provide an essential skewing of economic activity in directions that may
appear idiosyncratic to an outsider, but inhere to an internal cultural logic that makes
sense to participants
1
.
In this discussion, I will argue that patterns of hierarchical exchange are essential
forces in the Iranian economic system. Moreover, these forces transcend the vagaries of
political control of the government. They were as salient in the Pahlavi regime as they are
1
Cf. Karen Z. Ho’s recent work on Wall Street financiers, which demonstrates that the “culture” of Wall
Street traders was a definitive factor in the recent “Great Recession” of 2008-2009 (Ho 2009). Similarly,
Stephen Gudeman’s work on traditional economies shows that social patterns of interaction frequently
govern economic activity, often to the detriment of “efficient” market forces (Gudeman 2009; Gudeman
2008)

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in the current Islamic Republic, and continue to drive political sentiment in today’s
political climate.
Cultural Patterns of Distribution
As I have shown in a number of writings over the past several decades(Beeman
2008; 2005; Beeman 1986), Iran is a decisively hierarchical society. In the Iranian
hierarchical orientation, persons in relative high and low positions are bound by a
symbolic distribution of goods, services and requests for goods and services. The
relationship is reciprocal, and creates a symbiotic bond between the person marked as
superordinate and the person marked as subordinate.
Because these positions are relative and not fixed, everyone can potentially be a
superordinate actor to numerous other individuals and be subordinate to many others. The
positions shift over time as well, so that one is never in a fixed hierarchical position, as
might be seen in a caste system.

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The pattern looks somewhat like this:
In this paradigm, material goods, actions and requests are labeled as tribute,
service and petitions when flowing from subordinate to superordinate and as rewards,
favors and orders when flowing from superordinate to subordinate. In actual material
terms the substance of these materials, actions and requests may be exactly the same, but
they are labeled differently in symbolic terms.
As I have argued in many publications, this basic pattern of exchange is ritualized
in linguistic discourse through the use of language levels, and in the system of social
politesse known as “ta’arof.” This system is very old having been attested by travelers
and officials working in Iran back to the 18
th
Century.

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What is most important for the purposes of this discussion is the realization that
the symbiosis in this system is a source of social and economic stability. As long as the
web of superordination and subordination remains intact, with all individuals fulfilling
their social and economic roles, harmony prevails. When, however, the pattern is broken
through failure of reciprocity, then there is a serious breach.
In particular authority in Iran depends on the existence of a social contract
between subordinate and super-ordinate powers. The super-ordinate figures are
paradoxically the most fragile in their position. They must attend to the needs of
subordinates, or risk being toppled from power -- or at the very least undermined. Every
Iranian working in a bureaucratic office knows that the bad boss is eventually done in by
his employees who lose essential documents, misroute files, and steal -- or in extreme
cases, launch embarrassing protests. Then they claim their subordinate status as an excuse
for their actions. This gives subordinates a great deal of potential power if they choose to
use it. This phenomenon is something I have termed elsewhere as “getting the lower
hand.”
In this regard, the Iranian government’s conduct both in the Revolution of 1978-
79 and in the recent protests following the July 12, 2009 presidential elections were
telling examples of this principle. In both cases, government actions vis-a-vis the
protestors and street demonstrators were violent. By allowing, or even by some accounts,
ordering the beating of women and young people, effecting house arrests and
crackdowns, the authorities in Iran essentially broke their contract with the people. In
both cases, social order began to fray.

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Economic Reflexes
Iran’s economy was highly fragmented until the land reform of 1962. In the
1950’s the bulk of Iran’s population was rural, despite massive public works projects
established under the regime of Reza Shah.
For most Iranians, this meant that their immediate superordinate was the landlord
who owned the majority share in their means of production. In essence, the population
had no feeling of direct material dependency on the central government as they did to the
rural landlord who provided them with the bulk of their sustenance (Lambton 1969,
Keddie 1981: 124-125). Shah Mohammad Reza Pahlavi was nearly forced to enact land
reform by the U.S. government, but it was largely an abortive effort that resulted in much
greater social inequality in Iran, and, more importantly, the abandonment of rural life by
millions (Hooglund 1982), (Kazemi 1980:33-42). Today the proportions of population
are reversed. The vast bulk of the population now lives in urban areas.
For the purposes of this discussion, however, the more important point is that the
millions of displaced agriculturalists transferred their “social contract” from the now non-
existent landlord to the state. The pressure gradually grew on the state to provide the
favors and rewards that were provided by the landlord in earlier times in the form of
work, education and material wealth.
The State, for its part grew ever more distant from the population as it became
dependent on carbon-based export resources for more than 80% of its income.

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Essentially the Pahlavi state created the class of individuals that would later be
identified by Revolutionary Islamic forces as the mostaz’afin, and as the “Islamic
Marxist” forces as the underclass or the worker class(Kazemi 1980:59-62).
The Pahlavi state essentially broke its social contract with all classes of
individuals both upper and lower class, and this was the cultural reason for its downfall.
There were many components to this breach that have been widely documented, but the
brute fact in the end was that the shah was no longer in a firm social contract with his
people, who abandoned and expelled him.
Islam and the Superordinate-Subordinate Dynamic
Islamic law says very little about macro-economic forces. Nor does it posit any
explicit directives for setting up an economic system. As Homa Katouzian points out:
“Shi’i Islamic economics lacks such a framework because it claims not to be a science of
existing reality, but an ideology, a universal vision, which would establishe a completely
different framework for economic activity and social relations (Katouzian 1983:145).
Nevertheless there are important general principles, particularly in Shi’ism that follow the
subordinate-superordinate pattern of economic transfer I have laid out above.
In Islamic practice since the Safavid period, the institution of the Marjeh’at, or
adherence of Shi’a believers to one “Marjeh-ye Taqlid (leader for emulation” sets up
such a dynamic on both spiritual and material grounds. The Marjeh-ye Taqlid, an
Ayatollah-ol-‘Ozma, or “Grand Ayatollah” serves as the believer’s spiritual guide, and

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also receives the religious tithes required of all believers. These funds are redistributed
for religious or charitable purposes.
At the advent of the Revolution the implicit message of the new Islamic Republic
was that there would be a new social contract with the Iranian people. By supporting the
Revolution, the Subordinate throws off the illegitimate Superordinate who has violated
the social contract. The Subordinate becomes the mostaz’af, the oppressed or
downtrodden (from the root z’f—weakness), and the Superordinate of the old regime the
istez’af or oppressor. These theories were in wide circulation before the revolution, most
notably in the writings of Mohammad Baqir al-Sadr (Ṣadr 1350; Ṣadr 1973:137-198) and
Abol Hassan Bani-Sadr (Banī Ṣadr 1979:416).
They were incorporated nearly wholesale by Ayatollah Ruhollah Khomeni with a
few twists. It is clear, in fact that his view of Islamic Government is essentially based on
the Islamic system of tithing—indeed he appears to accept that the tithe should be
directly used for state expenditures:
The financial taxes legislated by Islam do not contain anything to indicate that
they were legislated to feed the poor . . . . They indicate that their legislation was
for the purpose of securing the expenditures of a major sovereign state. For
example, the one-fifth tax [khoms] is an enormous source of income that yields to
the treasury enormous sums of money that constitute the larger part of this
treasury . . . .(Khomeini and Carpozi 1979:154).
However, he goes on to assert the need of the state to help the oppressed:

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. . . there are hundreds of millions of starving people who lack the simplest health
and educational means. On the other side, there are individuals with excessive
wealth and broad corruption. . . . We are instructed to help the wronged and to
fight the oppressors . . . (Ibid: 27).
This is a kind of populism wedded to the traditional Shi’a system of redistribution of
resources embodied in religious taxes, administered through the clergy.
It is interesting that Ayatollah Khomeini endorsed Abol Hassan Bani-Sadr as his
first president despite strenuous objections from the religious right. In part, Bani-Sadr’s
admittedly leftist views on economics (Banī Ṣadr 1979:416)were in rough accord with
Khomeini’s, and this may have provided him with the support needed to gain Khomeini’s
confidence.
The Populist Challenge to Market Economy
In theory, the new Islamic Republic was to serve as a corrective to the previous
system, which was seen as embodying this excessive wealth and broad corruption. The
Bonyad-e Mostaz’afin was established shortly after the Revolution to ostensibly
confiscate the lands of Pahlavi-era oppressors and redistribute them to the
“downtrodden.” This would have the effect of restoring balance between Subordinate and
Superordinate in the traditional hierarchical distribution of resources, the difference being
that the Superordinate forces would be legitimate and religiously sanctioned in the
Islamic State.

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This scenario proved exceedingly difficult to implement. Iran had been wedded to
an international market economy strategy under the Pahlavi regime. A switch to a
somewhat simplistic redistributionist populist model, while attractive to the public,
ignored matters such as international trade agreements, state and private industries,
banking and financial institutions. This created two factions in the economy Shireen
Hunter notes this clearly in her monograph, Iran after Khomeini:
In practice, the Islamic regime’s survival has thus far depended on maintaining
the support of its two constituencies—the merchant class and the traditional
clergy, and the lower classes—with vastly different aspirations and interests. . . .
On the economic front, this policy has proven disastrous . . . (Hunter and
Georgetown University. Center for Strategic and International Studies 1992:163).
The great irony in the post-Revolutionary period is that the “downtrodden” had, as
Dariush Zahedi wrote in 2000, “clearly not been lifted out of grinding poverty. In fact,
their conditions have deteriorated further . . .” (Zahedi 2000:224).
The difficulty has continued down to the present. The reformists, including
President Mohammad Khatami favored a gradual opening of the economy, including an
opening to international markets. The pushback from the populist revolutionary factions
was palpable, reaching crisis levels in the Presidency of Mahmoud Ahmadinejad. We are
indebted to Thierry Coville for his early identification of the tensions that would arise in
the past few years (Coville 1994). In a follow-up to his prescient study he wrote in 2005
after the election of President Ahmadinejad:

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The former mayor of Tehran based his presidential campaign on social justice and
the fight against poverty, unemployment, corruption and the Mafia-style
organisations within the oil sector. Such aims have provoked fears that the
process of gradually opening up the Iranian economy, a policy that has been in
place since 2000, will be halted.(Coville 2005)
Indeed, President Ahmadinejad pursued these policies in a manner no previous president
had done, with direct subsidies to the people (especially to rural populations), retirees,
veterans and other groups who fit the profile of the “downtrodden,” at least in ideological
parlance. At present policy making under President Ahmadinejad appear chaotic because
of the competing interests of factions trying to pull the economy in different ideological
directions as Green, Wehrey and Wolf so aptly describe:
The semi-official or even non-official bodies—such as the local Basij
units and the Chamber of Commerce, Industry and Mines, which partially
represent the private sector—get involved as pressure groups to exert influence
on key decision making bodies. In between stand the official bonyads (such as
the Bonyad-e Mostazafan) and the recently attention-getting IRGC subsidiaries
that have high stakes in the semistate economy but also enjoy strong personal
relationships with key political players. . . . At times, a government has made
decisions that contradicted each other and, in the end, undermined the designed
effect on the economy. (Green, Wehrey and Wolf 2009: 23).
President Ahmadinejad’s policies were frightening to the business community,
particularly when rumors of nationalization of private industry with public distribution of

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shares to the “downtrodden” were common. Alarmed businessmen, among other actions,
repatriated vast quantities of wealth to Dubai and other international venues.
President Ahmadinejad also intensified patronage within the Iranian political
system, appointing thousands of his supporters—many from the ranks of Iran-Iraq war
veterans and from the Revolutionary Guard—to mid-level positions in government
(Beeman 2006). Without his continued Presidency, these individuals would be
completely removed from positions of authority.
In the classic pattern of Superordinate-Subordinate relations in Iran, this created a
solidary tie between the President and his supporters—a tie that would prove to be a
factor in the election of 2009. We will probably never know the true outcome of that
election, but the solidarity between President Ahmadinejad and his supporters both inside
and outside of government was crucial in the results that were officially reported.
In the meantime, generalized economic conditions have deteriorated
precipitously. Inflation and unemployment are at all time highs, and commerce and
agricultural production continue to decline. Tensions with the United States and Western
nations over Iran’s nuclear program leading to economic sanctions have not helped, but
these sanctions have been less damaging than the government’s own weak policies.
Conclusion
I hope that I have made a clear case for considering cultural factors when
assessing the economy of Iran (or, indeed, of any nation). In order to become a secure
leader in Iran, it is essential that the person in the Superordinate position actively
distribute favors and rewards, and not violate the public trust. His or her supporters will

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respond with tribute and loyal service. The bond is then solidary, and it becomes difficult
to dislodge the Superordinate individual.
However, the bond is really dependant on Superordinate actions. When the
Superordinate individual attacks or violates his or her supporters, the bond is broken and
the system deteriorates into revolution or revolt.
Market economies operate on a completely different principle of resource
distribution. When these two systems come into conflict, the tensions can be palpable. As
Iran goes forward, the tension between these two economic ideologies must be resolved if
Iran is to have civil tranquility combined with a viable economic profile in the
international community.
Ingrained cultural patterns such as the traditional interpersonal resource
distribution system I have outlined in this paper can not be changed as a result of a policy
decision or executive order. It will take extensive cultural engineering even to modify
such an essential feature of Iranian life. We can expect cultural tensions in the economic
system of the Islamic Republic to continue for the immediate future.
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