MSU LIBRARIES M v RETURNING MATERIALS: Place in book drop to remove this checkout from your record. FINES wi11 be charged if book is returned after the date stamped be1ow. DEVELOPMENT OF THE DEPENDENT BOURGEOISIE IN IRAN, 1962-1978 BY Seyfollah Seyfollahi A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Sociology 1982 ABSTRACT DEVELOPMENT OF DEPENDENT BOURGEOISIE IN IRAN 1962-1978 BY Seyfollah Seyfollahi This dissertation is intended as a contribution to investigation of the development of the dependent bourgeoisie in the Iranian society in the period 1962-1978. It explains and analyzes how and why the dependent bourgeoisie expanded throughout the.country to dominate the entire political and socioeconomic institutions. The contributions of the world capitalist economy, and the nature of the internal social formation in incorporating and disarticulating the economy of Iran's society is the core discussion of the dissertation. Historical review of the development of the Iranian social formation and the process of penetration by the world capitalist economy from 1828 to 1962 gives some historical background in order to understand how events came about in the period under consideration. This dissertation attempts to analyze the various strata of the dependent bourgeoisie and explain the effects Seyfollah Seyfollahi of this group on the socio-political and economic structure of the society. The analysis finds that the peripheralization of the Iranian social formation, and consequently the emergence and development of the dependent bourgeoisie in Iran, is a direct result of the penetration of the world capitalist econ- omy and also the Iranian pre-capitalist social formation. The relevant paradigm which makes it possible to study the historical development of the phenomenon is the depen- dency/world system perspective within the conflict and change tradition.. This study, through applying the historical Method and benefitting from some other sources such as im- perical data, has achieved some valid and reliable findings. DEDICATION To my wife, Shahnaz, the person who shared patiently our passing painful days and en- couraged me toward delightful days. ii ACKNOWLEDGEMENT In completing this dissertation I owe much to the library of the Michigan State University and its staff, to my advisor and Committee members and to my Iranian colleagues in the Sociology Department. Studying sociology and doing research in this area at the present time is neither an easy task nor a convenient job for individuals who encounter various personal and societal difficulties because of economic crises, financial problems and increasing unemployment in core and periphery countries. But, what has influenced me to study sociology was my interest in this area because of its struggle for solutions to the dilemmas which human beings encounter. The facilities which the library of Michigan State University made available to me, and the discussion which repeatedly occurred among my Iranian colleagues and myself about the political economy of Iran gave the impetus push my study schedule forward. Kay J. Kay edited this work seriously in a scholarly manner and Martha West typed it in a professional way. I appreciate them. iii My advisor, Professor J.B. McKee, with his open-minded humanistic approach inspired me the idea to look at social environments and their issues with broadened perspective. Thanks to my committee members, Professors J. Useem, K. Kelly and R. Hill, whose recommendations helped me to think ob— jectively about a topic I am very close to. My final words should be of thanks to my wife, Shahnaz, for her patience and kindness which have put me in her eter- nal debt. She provided me with much support and inspira- tion when I needed it. iv PREFACE An analysis of dependent bourgeois development in Iran requires an explanation of the sources, causes and consequences of peripheral capitalist social formation in such peripheral societies (Chapters 4 and S). An answer to the question of why the dependent bourgeoisie developed in Iran and became a dominant socioeconomic formation jjsfundamental (1962-78). Answering such a question will help to determine the tactics and strategies involved in such a process (Chapters Six to Nine). The historical analysis of such a process in peripheral societies states how it deformed the social formation: the colonial capitalist countries urged the leaders of the peri- pheral countries to appropriate and expropriate their own economic surplus raw materials and also to import industrial materials at the expense of the peripherization of the econ— omy of these countries (Chapter 4). Iran was no exception. It was invaded by two powerful colonial capitalist countries of the period, England and Russia, and was treated as a semi-colony (Chapter 5). Through this process the Iranian social formation began to become deformed. The Consequence was the development of a peripheral capitalist mode and a diminishing of Iran's self-sufficient, pre-capitalist social formation (Chapter Five). The sociological perspective which addresses these issues in a dynamic and comprehensive way, is the dependency/ world system paradigm within the conflict and change tra— dition. It maintains that development of the capitalist mode of production in core countries requires the under- development of other parts of the world, which results in the emergence of peripheral countries. It is in the nature of capitalist relations to divide peOple within and across political boundaries into two major groups: those who have, or the develOped peoples, and those who have not, or the un- derdeveloped peoples (Chapters One and Three). The hallmark of this sociological paradigm is its concern with the two effective factors which produce the di- lemma of the peripherization of capitalist relations in peri— pheral societies and the emergence of the dependent bourgeoisie. These factors are the internal conditions of life, or the social formation of the peripheral societies prior to pene— tration by the colonial and world capitalist economies, and the invasion and the penetration of the colonial capitalist countries to exploit the economic surpluses of the peripheral countries. The result of these relations was the disarti- culation of the peripheral economies and deformation of the social structures in these countries (Chapters Three and Four). vi The emergence and development of a dependent bourgeoisie in these societies is one direct consequence of such core- peripheral relationships. This class helps to maintain the unequal exchange relations, encouraging exploitation and inequality on internal and international levels (Chapters Six to Nine.). The Iranian experience is a good example of such core-periphery relations. Primitive capital accumulation and its social relations had just emerged in Iran when the colonial capitalist coun- tries witnessed and intervened in its development process. Thereafter, the colonial powers did not allow such a pro- cess to pave the way for indigenous capitalist develop— ment and the consequent emergence of an independent bour- geois class. From the beginning, the development of capit- alist relations were forfeited in the interests of the colon- ial capitalist countries and their allies; the landlords, dependent bourgeoisie, and the courtiers. This situation resulted in the growth of a dependent bourgeoisie, which was forced to dominate the social system in coming decades (Chapter six to nine). This group served its own and the core Countries' interests, instead of the interests of the Iranian people in the 1962-78 period that is the focus of this study. vii TABLE OF CONTENTS CHAPTER PREFACE. O O O O O O C O O O O O O O O O O O O 0 PART I TOWARD A GENERAL CONCEPTUAL FRAMEWORK . I. THEORY AND METHODOLOGY . .I. . . . . . . . . II. Historical Background. . . . . . . . . . . . The Problem. . . . . . . . . . . . . . . . . Goals of the Study . . . . . . . . . . . . . Literature Review and Theoretical Framework. 0 Major Theories of Core and Peripheral Relation Main Approaches to Iranian Dependent Bour- geoiS‘ Development. . . . . . . . . . . . Theoretical Framework. . . . . . . . . . . . Definition of Terms. . . . . . . . . . . . . Methods of Analysis and Sources of Data. . . SCOPE AND ACHIEVEMENT OF STUDY . . . . . . . Scope and Limitations. . . . . . . . . . . . Contribution of This Research. . . . . . . . PART II AN HISTORICAL BACKGROUND. . . . . III.THE PROCESSES OF CAPITALIST FORMATION IN EUROPE AND OTHER REGIONS . . . . . . . . . . Pre-Capitalist Social Formation in Europe. . Capitalist Social Formation: Its Types, Nature and Requirements. . . . . . . . . . World Capitalist Formation and the Emergence of Core Periphery Relations. . . . . . . . Summary and Conclusions. . . . . . . . . . . viii PAGE 52 56 57 60 64 68 IV. VI. VII. PROCESS OF PERIPHERAL CAPITALIST FORMATION IN THE PERIPHERAL COUNTRIES. . . . . . . . Two Determinant Factors in the Peripheral— ization of Contemporary Peripheral Countries. . . . . . . . . . . . . . . . Internal Social Formation-and Class Structure. . . . . . . . . . . . . . . . Phases of World Capitalist Formation: Its Requirements . . . . . . . . . . . . Process of Colonialism and Peripherali- zation in Peripheral Societies . . . . . Summary and Conclusions. . . . . . . . . . PROCESSES OF PERIPHERAL CAPITALIST FORMATION IN IRAN. . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . Historical Background. . . . . . . . . . . Pre-Capitalist Social Formation-~1828. . . Asiatic Mode of Social Formation . . . . . Dominant Mode of Production. . . . . . . Position of the Merchants and Craftsmen in the Pre- Capitalist Period . . . . . . Social Formation in the Colonial Period 1828-1906. . . . . . . . . . . . . . . . Semi- Colonial Social Formation in Semi- Colonial Period, 1828-1906 . . . . . Process of Neo- Colonial Formation 1906-1925. Rising State Capitalism 1928- 1941. . . . . State Capitalism 194l- l952 . . . . . . Decline of State Capitalism 1953- 1962. . . Position of Dependent and Independent Bourgeoisie in This Period . . . . . . . Conclusion . . . . . . . . . . . . . . . . PART III DOMINATION OF THE DEPENDENT BOURGEOISIE IN IRAN 1962—1978. . . THE SHAH'S WHITE REVOLUTION: ITS CAUSES AND CONSEQUENCES . . . . . . . . . . . . . THE ROLE AND FUNCTION OF THE WORLD CAPITALIST ECONOMY IN THE DEVELOPMENT OF THE DEPENDENT BOURGEOISIE IN IRAN . . . ix 73 75 76 79 83 85 91 91 93 97 99 102 104 106 108 113 117 125 129 134 136 139 141 167 VIII. IX. XI. XII. DOMINATION OF THE DEPENDENT BOUR- GEOISIE IN THE SOCIOECONOMIC AND POLITICAL SYSTEM. . . . . . . . . . . . STRUCTURE OF THE DEPENDENT BOURGEOISIE AND ITS FUNCTIONS WITHIN THE PERIPHERAL SOCIOECONOMIC FORMATION . . . . . . . . Commercial Dependent Bourgeoisie. . . . Industrial Dependent Bourgeoisie. . . . Bureaucratic Dependent Bourgeoisie. . . Financial Dependent Bourgeoisie . . . . Agricultural Dependent Bourgeoisie. . . PART IV THE MAJOR EFFECTS OF THE DOMINANT DEPENDENT BOURGEOISIE ON IRAN'S SOCIOECONOMIC FORMATION . . . THE SOCIOECONOMIC CONDITIONS AFTER THE SHAH'S WHITE REVOLUTION: THE PRESENCE OF MULTINATIONAL CORPORATIONS IN IRANIAN PEOPLES EVERYDAY LIVES. . . . . . . . . THE RADICAL MOVEMENTS AGAINST THE DOMINA— TION OF THE POLITICO-ECONOMIC SYSTEM AND THE CORE CAPITALIST COUNTRIES . . . . . CONCLUSIONS AND RECOMMENDATIONS . . . . Summary ... . . . . . . . . . . . . . . Conclusions . . . . . . . . . . . . . . Recommendations . . . . . . . . . . . . ENDNOTES. . . . . . . . . . . . . . . . . . . APPENDICES O O O O O 0 O O O O O O O O O O O O BIBLIOGRAPHY. . . . . . . . . . . . . . . . . 185 201 203 208 224 229m 235 245 250 278 300 300 306 308' 318 325 332 LIST OF TABLES TABLE ‘ 1. Changes in Volume of Steel Products in Millions of Tons. . . . . . . . . . . . . . 2. Division of Colonial Lands Between European Colonial Capitalist Countries Before and During World War I (In Million Square Miles) . 3. Iranian Imports and Exports From 1800— 1900 (In Sterling) . . . . . . . . . . . . . . 4. Budgetary Allocations From 1934-41 (Average Increase Per Category). . . . . . . 5. Iranian Balance in Trade (Excluding Oil Exports (In Millions of Rials) . . . . . . . 6. Foreign Ownership of Companies in Iran 1953 Coup D' etat. . . . . . . . . . . . . . 7. Available Financial Capital in Foreign Exchange 1954-62 (In Millions) . . . . . . . . 8. Iranian Balance Of Trade, 1954-62 (In Millions). . . . . . . . . . . . . . . . . . . 9., Gross Domestic Fixed Capital Formations, 19550-1965 (In Millions of Rials). . . . . . . 10. Composition of G.D.F.C.F. by "Traditional" and "Modern" Capital Goods in Percentage Terms 1900—1965. . . . . . . . . . . . . . . . xi PAGE 63 71 112 124 131 132 133 133 149 150 11. 12. 13. 14. l& 16. ll 18. 1Q 20. 21. 22. 23. 2¢ 25. 26. 27. 28. G.D.F.G.F. In Import Capital Goods (In Millions of 1965 Rials). . . . . . . . . . Iranian Defense Budget 1970-1976 (in Millions of U.S. Dollars) . . . . . . . . . . . . . . . Defense Expenditures in Middle East, 1974. . Measures of Inflation in Iran. . . . . . . . . Imports From Iran's Leading Trade Partners (In Millions Of Dollars) . . . . . . . . . . . Technical and Economic Aids, Grants and Loans From the U.S. to Iran (In Millions of Dollars). . . . . . . . . . . . . . . . . . Geographical Patterns of Iran's Non-Energy Trade (Million Dollars). . . . . . . . . . . . Iranian Social Class Structure . . . . . . . . Iran's Food Imports (million dollars). . . . . Composition of Imported Goods, 1959-68 (Millions of Dollars). . . . . . . . . . . . . Composition of Imported Goods, 1969-74 (Millions of Dollars). . . . . . . . . . . . . Growth Composition of Iran's Imports, 1964-73 (Millions of Dollars). . . . . . . . . . . . . Major Exports from the U.S. and From Organiza- tion for Economic Cooperation and Development Countries to Iran. . . . . . . . . . . . . . . TV and Radio Manufacturers in 1976 . . . . . . Iran: Major Iranian Banks in 1975. . . . . . . Iran: Foreign Bank Representative Offices. . . Credit Exposure of American Banks in Iran as of February 1979. . . . . . . . . . . . . . Activities of Foreign and Iranian Insurance Companies in Iran in 1976. . . . . . . . . . . 172 179 184 187 195 196 197 207 209 220 232 233 234 236 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. Production of Major Agricultural Corps for Selected Years 1969-1977 (In Thousands of Dollars). . . . . . . . . . . . . . . . Foreign Investors in Iranian Agribusiness. . Projects Granted Loans by the Agricultural Development Bank (Iran) in 1975. . . . . . Composition of Imports, 1971-1975 (In Millions of United States Dollars) . . . . Gross National Product in 1971 Prices. . . . Index of Agricultural Production (1961-65=100) Index Of Industrial Production (1963:100). . Contribution to GNP by Major Sectors . . . . Contribution to GNP by Major Sectors (Rate of Growth) . . . . . . . . . . . . . . Relations Between the Various Economic Sectors During the Third, Fourth and Fifth Plans 0 I O I O O O O O O O O I O O O 0 Annual Rate of Growth of Imports in Constant 1972 Prices, 1959-1974 . . . . . . . . . . . Distribution of Percentage Share of Individual Countries in Iran's Foreign Trade, 1960-1979 0 o C o o o o o o o o o o The Rate of Profile of Multinational Cor- porations (In Percent) . . . . . . . . . . . Participants in the Iranian Consortium, 1955 Foreign Investment in Iran in Rials, November 1956-End 1970 O O O O O O O O O O 0 Foreign Private Investment in Iran (Million Ria18) O O O O O O O O O O O O O O O O O O 0 Composition of Non-Oil and Gas Exports, 1970-1979 in U.S. Dollars (Million). . . . . xiii .239 .243 .244 .254 .255 .256 .258 .259 .260 .263 .266 .267 .268 .269 .270 .270 .271 46. 47. 48. 49. Crude Production and Oil REvenue in Various Years. . . . . . . . . . . . Summarized.Balance of Payments (Foreign Exchange Receipts and Payments) for Iran 1959-1975 (3 Million). . . . . . . . Iran's Defense Budget 1970-77 in U.S. 5 Million at Current Prices. . . . . U.S. Military Sales to Iran 1950-1977 in U.S. 5 Millions at Current Prices xiv 272 274 281 281 LIST OF GRAPHS GRAPH PAGE 1. The Increase Of Imports of Goods to Iran Over the Past Two Decades . . . . . . . . . . . . . . . . . . . . 328 2. Iran's Decreasing Non-Oil Exports, 1955-1980. . 329 3. Rate of Increase in Iran's Defense Budget . . . 330 4. Iran's Increase in Oil Revenues . . . . . . . . 331 XV Dun-- — 0.... l.l¢ on! . — “.5 F'*' a bowl: . PART I TOWARD A GENERAL CONCEPTUAL FRAMEWORK In this section an attempt is made to introduce the theoretical and methodological aspects of the study. In any research project, these aspects are necessary to present the scope, limitations, perspectives, the methods of ap- proach to the problem and the achievements of the study. CHAPTER ONE THEORY AND METHODOLOGY Historical Background The main Objective of this work is to provide an ex- planation for the development of the dependent bourgeoisie in Iran during the period 1962-1978. Although the emergence of a dependent bourgeoisie in Iran has a history that goes back at least to the colonial period, it was between 1962 and 1978 that the group developed and expanded throughout the country, and came to dominate all other social Classes and the society as a whole. Because of the overriding im- portance of the dependent bourgeoisie, it is important to analyze the causes and effects of the development of this class. Before this analysis, however, brief definitions of the main concepts applied in this study must be provided in order to avoid misinterpretation and misunderstandings. A brief history of the political economy Of Iran and Of colon- ialism, which has had such profound and continuing effects on the country, is also necessary. The relationship between Iran and the colonial capital- ist world began during the Safavid Period in the sixteenth 2 century. However, it was not until the nineteenth century, especially the beginning of the constitutional revolution in 1906, that the Colonial capitalist countries increased the level of their direct and indirect influence in Iran. The conflict between two colonial capitalist countries-- Russia and-England--over Asia in the nineteenth century prevented Iran from becoming a colony. Rather, she first became a semi-colony and then became a neo-colony. Ever since the early years of the nineteenth century, the colonial capitalist countries have attempted to pene- trate the state machinery of Iran to achieve their co- lonial aims. Russia, by penetrating both the state machin- ery and the armed forces, became a dominant influence through- out the northern part of the country, spreading toward the Persian Gulf. Meanwhile, in order to prevent Russia from gaining influence in the southern part of Iran and the Per— sian Gulf, England began Maintervene in Iran's affairs. By playing a principal role in the constitutional revolution and then in the coup of 1921 by Reza Khan, England paved the way for her own capitalist penetration. Her colonial policies led her to unify and organize the landlords and the newly emergent bourgeoisie in Iran in order to prevent any possibility of future conflicts between those classes. The development of bourgeois relations within the Asiatic pre-capitalist formation in Iran has its own specific 3 history. These relations had prevented the development of capitalist relations in the past, and built a bulwark against penetration by the world capitalist economy. As we will Show, the dominant political system, over the past few decades, was able to destroy the barriers, permitting penetration by the world capitalist economy and the de- velopment of a dependent bourgeoisie throughout the coun- try. The development of a dependent bourgeoisie was not a response to the demands of the society. Therefore, since the semi-colonial period, it has produced and advanced var- ious socioeconomic problems and conflicts throughout the country. The uprisings of the last few decades are good evidence that such socioeconomic development cannot work well. In fact, although the advanced capitalist countries supported the dominant political system against its oppo- sition, it collapsed in 1979. The Problem The seventy-five year old struggle over the bourgeoisie, and other socioeconomic struggles of Iranian society, were insufficient to eliminate the basis of pre-capitalist modes of production and their attendant socio—cultural relations. Hence, a new phenomenon, the dependent bourgeoisie, emerged. 4 This phenomenon, a worldwide dilemma in our era, has led Iran to become socioeconomically peripheral and dependent. The culmination of this phenomenon has occurred since the Shah's White Revolution of 1962. Through domination of the socioeconomic and politico-cultural institutions in this period, the dependent bourgeoisie has made itself the domin- ant force in the socioeconomic system. It not only has deformed the socioeconomic formation and its evolution, but has also led to unequal development of various economic sec- tors and increased the gaps and the contradictions between Classes within the-society. The research question Of this study is: Why and how did the dependent bourgeoisie in Iran emerge, develop, and become a dominant socioeconomic formation between 1962 and 1978? The tentative answer, stated as a hypothesis, seems to be that the development and dominance of the dependent bourgeoisie in Iran over the past few decades are causes and consequences Of the development ofeaperipheral capit- alist mode of production. Such a development has occurred because of the penetration into Iran of the world capital- ist economy, and because of the nature of the Iranian pre- capitalist social formation, which prevented the emergence of an independent capitalist mode of production at a domin- ant level in Iran. The study is designed to verify the accuracy of such an assumption by analyzing historical documents, sociolo- gical studies, and empirical data available in the field. 5 Without discussing the problems Of the Iranian nine- teenth century social formation which interfered to develop such a peripheral and dependent situation, the consequence was the emergence of a dependent bourgeoisie over the past century. Although the Iranian pre-capitalist social forma- tion undermined the dynamic process of Iranian sociO-economic formation and has given it specific Characteristics, it was the colonist trend Of the world capitalist economy of the nineteenth century which forced it toward peripherization and encouraged dependency in the merchants and traders. From that period, the critical socioeconomic conditions arose which caused the disarticulation of the Iranian econ- omy, its incorporation into the world capitalist economy and emergence of the dependent bourgeoisie as the dominant SOCiO-political group. With the disarticulation of the indigenous Iranian socioeconomic structure into the world capitalist system, its productive forces and relations changed rapidly. This Change was not due to the internal contradictions of such relations, but to the world capitalist economy Of the colonial period. The nature of these social-economic changes was foreign- .Oriented, geared toward the interests and requirements of the capitalist countries, not internal and indigenous require- ments. This was the essential problem of the Iranian socio- economic development and led to deformation of social Class 6 relations and the emergence and domination Of the dependent bourgeoisie in this country for decades to come. The emergence and development Of such Class was, thus, a product of world-wide economic phenomena in which Iran was involved. It caused problems for decadestxrcome. This phenomenon was the creation of core-periphery relations be- tween the capitalist countries and the newly independent peripheral countries. It was the birth of the problems Of the peripheries and Iran was no exception. Iran has such a problem that even after years of socioeconomic struggle it has not been able to release itself from dependent re- lations. Goals of the Study As mentioned before, this study is an attempt to analyze and explain why and how peripheral capitalism and its leading Class, the dependent bourgeoisie, became dominant in Iran's system of production between 1962 and 1978, and how the de- pendent bourgeoisie has come to dominant the socio-cultural and politiCO-economic organs of the society. The process of the development of the dependent bourgeoisie has taken place in many places in the world, not just in Iran; therefore, this study will review briefly the emergence of this phen- omenon in peripheral countries in general, with particular reference to Iran. Having presented an historical background, 7 the study will then focus on Iranian society in the period under consideration. The study will examine the mechanism operating within Iran as a now-peripheral country to see how and why foreign domination was internalized, politically and economically, by the dependent bourgeoisie which has developed and domi- nated the country, and linked it to the capitalst world. Literature Review and Theoretical Framework The long history of relations between the capitalist countries and peripheral countries has been elaborated upon by several recent writers (Frank, 1969; Rodney, 1972; Amin, 1972; Wallerstein, 1974). These social scientists generally hold that the emergence of underdevelopment must be analyzed as an integral function of the world capitalist economy. Through these writers' theses, we learn how the dependent bourgeoisie in the peripheral countries emerges, develops, and affects the everyday life of such societies. The review of the modernization/development and dependency/world system paradigms are to determine which one is more relevant than the others in analyzing the subject under study. In this context, the review of Iran's political and economic liter- ature is an attempt to discover a theoretical framework for this study. 8 I. The Major Theories of Core and Periphery Relations. Despite various paradigms which concern themselves with development there are two dominant sociological per- spective in this area: the dependency/world system per- spective: within the conflict and Change tradition, and the modernization/development perspective in the function— alistiC tradition. The modernization/development perspective is re- flective of the social and historical conditions Of human societies: and in those conditions it has been developed. The idea of modernization/development is primarily an American idea, and has been developed by American social scientists especially by political scientists and sociologists. It was developed in the period after World War II in order to establish stability in European, Asian, African and Latin American societies. Peripherization for modernization/development theor- ists is an initial stage Of a stable and orderly process, which every country has to go through. The means of achie— ving development is further integration into the world sys- tem. It endorses the advantages of the division of labor in the world market and world trade; savings and capital accumulation are important, therefore, foreign capital, aid, technology and still are welcomed. 9 The paradigm attempts to classify human societies in two dimensions: as immature or mature, as traditional or modern, as underdeveloped or developed, etc. It ignores or underestimates the role and influence of external factors such as the penetration of world capitalist economies into the peripheral SOCieties and the historical process of these societies.- The definitions of traditional and modern in this paradigm are controversial and asymmetrial concepts. Con- trasting the modern and traditional is a bias and a presumed formulation for modernists which claims that traditional societies are static, similar and changeless, and that modern or western societies are diverse, different and dynamic. Skocpol summarized four methodological Characteristics Of modernization/development perspectives: (a) the tendency to verify the nation-state as the sole unit of analysis, (b) the assumption that all countries follow similar paths of growth, (c) a disregard of transnational structures, and (d) a method of explanation based on historical types. (Bodenheimer, 1973). The major empirical studies Of the modernization/ development paradigm in the periphery ignore the increase of unfavorable economic conditions of life, the increasing dependence of these conditions of life, the increasing de- pendence of these countries on foreign resources, and the failure to implement far-reaching social reforms. 10 In the past few decades, however, some new paradigms have been developed, mostly within the conflict and change tradition, which examines the development process in peri- pheral countries from different premises. Different in goals, method and conceptualization from the modernization/ development perspective , this paradigm, generally speaking, is a dependency/world system perspective, which concerns the nature of development in non-western societies, the peripheral countries. In this case, the study focuses on that part of this perspective which is related, directly and indirectly, to the underlying premise that the development process in peripheral societies is to be understood within the social-historical context of the development of the capitalist social formation in core societies. In this re- lation, the internal social formation of the periphery also has its effects on this peripheralization. It is advisable to extend this perspective here because the theoretical frame- work of this study is such that it is more useful to distin- guish the Valid aspects of the premises in analyzing the society under consideration . The dependency/world system perspective as an analy- tical and dialectical tool addresses the emerging conditions caused by capitalist relations. It is more useful if the analysis concerns itself with the peripheral capitalist mode of production. Such relations are the direct consequences 11 of the penetration of colonial capitalism in the peripheral areas. The enforced capitalist development in peripheral societies undermines their economic and societal structure and consequently deforms their social formations. Such developments result in (a) the deformation of Class re- lations; (b) the emergence and domination of the dependent bourgeoisie. These are the major effects of peripheral capitalist development. The emergence of such a class is dependent on foreign capital and finds its interest with foreign alliances, the multinational corporations. The early phase of this peripheral development which began with commercial activity was the colonial period of nineteenth century. Then it escalated in the form of in- dustrial exports and imports. The highest stage of this process is the monopolization of money, market and pro- duction. (Lenin, 1974). The uneven and unequal development process deepens when the world capitalist economy divides the world in two parts on the basis of an international division of labor: peripheral social formation, and core social formation (Amin, 1976; Wallerstein, 1974). The re- sult of such international division Of labor is exploita- tion and unequal exchange, more peripherization of the peri- pheral capitalist countries and the more centralization of capital surplus in the core countries. 12 Boot mentions asymmetry between the core-periphery relationships of these countries: "development of parts of the system occur at the expense of other parts;...it is the combination of inequalities plus the transfer of resources from underdeveloped to developed countries which explains inequality, deepens it, and transforms it into a necessary and structural element of the world economy..." (1975:15). Although most dependency theorists accept the re- lations of the world capitalist economy and the structures Of dependency in peripheral countries, some argue that it is too simplistic to generalize that only the penetration of capitalism made the peripheries dependent. (Bodenheimer, 1973; Gultang, 1971). Statistical studies in this field have been done in recent years such as those by Peirre Jalee. He applies the statistical data provided by the United Nations to document the siphoning Off of the peripheries' surplus'value toward the core countries. He maintains that foreign aid and tech- nology rather than internal development, actually increase the level of the periphery's exploitation. .He estimates that once profits, interests, loans, and unfair trade prac- tices are taken into consideration, 1.5 times as much aid goes out of the periphery as comes in (Jalee, 1964). Amin's perspective is likely more realistic in the context of the peripheral societies of Africa and Asia. He explains capitalism and its contradictions and says that 13 capitalism has become a global system containing two sub- systems. At the center, where capitalism emerges from in- ternal contradictions, a capacity for autocentric develop- ment, has been retained. But, capitalism in the periphery societies was initiated by and for the centers. He states that although there are some important differences between these periphery societies, they are all peripheral capitalist formations and are characterized by a similar set of struc- tural distortions arising from the fact that capitalism was imposed on them from the outside. He adds that we have to be careful in studying such statements because each region and each society represent specific problems which transcend this general model Of peripheral development. Therefore, it is necessary to consider those specific problems in de- tail.2 To sum up, the nature of precapitalist social forma- tions of the peripheral countries is critical in their peri- pheralization and emergence of dependent bourgeoisie in order to save its own and the foreign nation's interests. There are direct relations between colonialism, capitalism and, in the last phase, a world capitalist economy, peripherializa- tion and the consequent emergence of a dependent bourgeoisie. Lenin (1974),O'Connor (1970), O'Brien and Amin (1976) have supported this View. Thatit is, the nature of colonialism, capitalism and many other forms of the world capitalist economy which dominate,exploit and peripheralize the l4 capitalist development of peripheral societies. A depend- ent bourgeoisie, not an indigenous and independent one, “hi-Ch emerges to create its own internal contradictions as happened in core Capitalist countries, is the result of such a development. Regarding such various heterogeneous phenomena, the attempt here is to build a theoretical frame from which‘tOWOrk within the dependency perspective, which has various theore- tical orientations from which to analyze the underlying assumption. 2. The Main Approaches To Iranian Dependent Bourgeois Development Observers of the Iranian sociO-political and economic scene--social scientists and Others--have Offered various theories to explain why the dependent bourgeoisie emerged and developed in Iran, and how it came to dominate the countryside after the Shah's "White Revolution". In examining such theories, we can identify a few main themes regarding the historical development of a bour- geois class generally, and the Iranian social formation in particular. These Views can be divided into two camps, the Marxian and non-Marxian perspectives, which will be re- viewed briefly. Non-Marxian social scientists have often given attention to specific Characteristics of the Iranian social structure in developing economic, social, or political analyses. In 15 these studies they usually isolate individual aspects Of society from the process of social formation, especially in considering the development of the dependent bourgeoisie in Iran. These social scientists apply the terms "modern- ization" and "development" in analyzing the economic and social situations of the bourgeoisie, without referring to the specific characteristics of such development. The major problem with this approach is that the class aspects Of these developments remain unexamined. The concepts of "behavioral analysis," which most of the non- Marxian social scientists have used in analyzing Iran's socioeconomic development, are not sufficient to analyze such complex social processes Fer'instance, Zonis (1971) anuiBill's(1962) analysis of the Iranian "elite" does not examine the relationship of the elite to the distribu- tion of income, property, and power in Iran (Halliday, 1979). Some non-Marxian social scientists have developed theories which support the Shah's consolidation of his po- sition. These scientists attempt to analyze the Shah's system of domination, but ignore the socioeconomic context in which this domination took place. Although such studies (see Ricks, 1976) have amassed considerable data on Iran, they are weak in their analysis of the nature and causes of bourgeois development in Iran. The theoretical basis behind such studies purports to guide an examination of the regime and its allies, the development of the bourgeoisie, and the l6 rapid growth Of Iran's economy in the last two decades, but they fall short of the mark, as we will see throughout this dissertation.3 The Marxian social scientists and organizations have their own troubles in-analyzing the emergence and develop- ment of the bourgeoisie in Iran. Some such groups (e.g., Iran's Communist Tudeh Party) claim that this development is a "progressive feature," because socialism requires the destruction of pre-capitalist social formations, the Obstacles of a progressive social formation.4 Another group of Marxists in Iran Claim that Iran was and is "semi—feudal" and "semi-colonial” (Jazani, 1973). But, as we will explain later, their analysis is in error. The pre-capitalist formation of Iran was "Asiatic"; feudalism did not exist. Nor has there been semi-feudal social forma- tion. Theoretical Framework Analysis of the social formation of each period re- quires concern with the formative factors of human societies. People establish the communities through relationship and contacts with each other, and with their environments. These two factors Of social and environmental contacts inculcate the regularities, values, norms and beliefs which regulate the social system. The nature and qualifications of human existence and its relationship with nature, crystalize in the modes of :'~ 17 production. Modes of production indicate the progress of social formation in each period and its development in terms of production and distribution, the relations between labor and capital. Finally, they indicate those who have and those who have not. Every society in its development process within its single soCial formation may have various modes of production. But, in each period, one of these modes of production is the dominant one. The dominant mode of production rules human relations and regulates other social phenomena. To under- stand the mechanism of social motion, it is necessary to analyze the modes of production and distinguish the dominant one. The mode of production indicates the degree Of total- ity and unity, of the society. It also indicates the nature and qualification of the development, evolution, dependence and independence, and the progression and regression of the society. It is valid criterion for assessing the different periods of human society in different stages. The mode of production is constituted from two related parts, productive forces and productive relations. Productive forces are the bases of human societies and include the tech- niques of production, means of production, the population and its physical condition. Productive relations are the result of distribution of means of production among human groups. Pro- ductive forces and relations are the bases for establishment of the 18 value and belief systems and social norms in human society. Although the mechanism of social motion is based on the productive forces, especially the means of production, productive relations also affect productive forces. They intensify-or retard the development of social formation. Even the value system, social beliefs and norms affect the formation of social motion and social forces. Thus, they require consideration of the dialectic relations of the material bases of life and their productive social relations. It is the nature and qualification of the mdoes of production which determine the dependence and independence of social formations. Development of an indigenous or peripheral capitalist mode of production and their social relations depends on the Characteristics Of the mode of pro- duction. If the productive forces emerge from internal societal conditions, satisfy the requirements of the society and are not imposed from outside, it may be considered in- digenous development. On the other hand, the peripheral mode of production refers to externally-oriented development, which is imposed from outside the society and reflects the require- ments of foreign interests. The emerging relationships of such development will produce its nascent weaknesses, advan- tages and contradictions. The peripheralization of the mode of production in a given society produces various antagonistic relations and 19 anomalies alien to the society but imposed forcibly upon it. It also produces the dependent social relationships such as class relations, which are one of the major dilem- mas Of the peripheral societies in our era. The peripheral mode of production not only produces dependency, but deforms the entire social formation. The sociological perspectives approach this phenomenon of peripheral social formation from different dimensions and analyze it in terms of their ideologies and View points. In the present analysis, the study will apply the dependency/ world system paradigm which concerns itself with core-periphery relationships within the conflict tradition. The consequence of such relations is the peripheral capitalist formation and its dependent bourgeois relations in peripheral areas. There- fore, the theoretical statement of this work can be presented: deformation of the pre-capitalist social formations of periphery societies, through their forced integration into the world capitalist economy, not only did not lay the basis of a new social formation for independent development, but penetration, incorporation and disarticulation by the ex- ternal pressures of capitalist countries resulted in the transformation of these societies to benefit development of the core countries and for the requirements of their pro- ductive forces. Although the pre-capitalist formations of these societies were Obstacles in their developmental process, it 20 was the world capitalist economy from its beginning which played an essential role in depriving these societies from integrating into a world system economy. It preconditioned them for peripheral development from the early nineteenth century. The result of this unequal articulation and unequal development was the emergence of dependent social classes within peripheral social formations. This general statement requires some more specific explanation. To do this, re- ference will be made to some historical events in the econ- omic history of Iran. It should be treated as the theoreti- cal statement for this study. The following Chapters will assess the accuracy of these statements as well. The intent of this study is to analyze and explain why and how the dependent bourgeoisie in Iran in the period 1962-1978 established a dominant socioeconomic system. To make such an analysis, the dependency perspective has been distinguished among other paradigms. Having had various theoretical orientations and. explanations in this perspec- tive, the study concerns itself with that explanation which considers effectively, the internal and external factors in this emergence of the peripheral mode of production in peri- pheral country within the conflict and change tradition. That is, the nature of the internal social formation of the peripheral countries as an internal factor, and the nature of capitalist relations, as an external factor, create an uneven and unequal development in the peripheral countries. 21 One of the fundamental consequences of such relations is the emergence of the dependent bourgeois Class in peripheral countries to dominate the socio-cultural and politico- economic organs of the society in order to secure the var- ious interests of the world capitalist economy and their own. According to such an approaCh, the study mentions some aspects of the dependency perspective and matches them to see if the development of the Iranian political situation can be explained. The assumptions of writers such as Amin (1976); Santoz (1972) and Wallerstein (1974) are more appli- cable than others in the Iranian case? The peripheral capitalist mode of production and its development can be examined through the alterations in Class relations in peripheral countries caused by capitalist en- terprise, penetration by the colonial capitalist countries into non-European countries not only did not destroy the pre- capitalist Class structure of these societies, but trans- formed the Class structure to make it possible to extract the economic surplus and pave the way for capital accumula- tion. This began in Iran in the early nineteenth century and developed in later decades, as we see in this study. The role of the peripheral state in the social formation of these countries is crucial as it tends to nurture the cap- italist relationships. The state becomes the dominant Class system and establishes a set of production relations to 22 secure its interests. Such relations impose the social formation and pave the way for the emergence of a dependent Class which will be able to respond to the requirements of the colonial core country and the interests of its allies, such as the landlords, and courtiers. The state as the dominant class supresses other -c1asses and, in the case of dominant dependent bourgeoisie, it supresses and breaks down the progressive producer groups and deforms the social formation of the periphery countries for further peripheralization of the mode of production. As an internal factor the dominant class plays a major role in all phases of the world capitalist economy and peripher- alization of these countries, to integrate the peripheral econ- Omy into the world capitalist economy. In suppOrt of the state machinery and the world cap— italist economy, the surplus production not only cannot lead to internal capital accumulation, but is spent on industrial production, luxury goods and investment in light industry to Channel profits abroad. In this process the dependent bour- geoisie, in the last phase of its development, plays a fun- damental role. Throughout this conditioned situation, the nature of product and Class relations remains critical. In state capitalism the state has a dominant position in economic planning and investment. From this position the dependent bureaucratic bourgeoisie emerges. The agents of the core countries prepare this class to serve their in- terests and dominate the economic structure of the society. 23 The state and Class relations in these societies are con- sequences of peripheral development. Baran (1957) states that the periphery has its source in the nature of the pre- capitalist's social formation. The dominant class in semi-colonial, neo-colonial, and world capitalist periods was not permitted to develop independent capitalist relations, only dependent and peri- pheral ones. It was Closely linked to colonialist and core capitalist countries to serve foreign-oriented capitalist development. The nationalistic tendencies of the late nine- teenth century could not change these relations because the bases of such development did not provide for independent modes of production in the peripheral countries. The Iranian constitutional revolution of 1906, and some other movements over the past decades, were a good example of such a state- ment. The apparently independent state/machinery could not move toward real independence in the sphere of economic and social formation. It needed some fundamental Changes in core-pheriphery relationships to diminish the disarticula- tion in these countries and the structural changes within their internal social formations. To sum up, the major assumption of this study is that the development of the dependent bourgeoisie in Iran over the past decades and its dominant role in the last two decades are the consequences and causes of a peripheral Capitalist mode of production. Such development occurred in Iran because of the penetration of the world capitalist 24 economy and the nature of the Iranian pre—capitalist social formation which prevented the emergence of a dominant in- dependent mode of production in Iran. Examining the internal conditions of social forces in the Iranian pre-capitalist period, which have affected the development process of the social formation, is impor- tant. This prepared the way for the colonial capitalist invasion and paved the way for its invests by deforming the Iranian social formation and its mode of production. Without mentioning the history of the oriental and Iranian studies a brief review of Asiatic social formation will be provided to show how the Iranian pre-capitalist per- iod with its Characteristics paved the way for peripheral capitalism. Based on Marx's analysis, the Asiatic societies established socio-economic systems within despotis empires, people within such social systems were in isolated Village communities. Every community was an independent social for- mation and had self-sufficient production and reproduction. The modes of production in these communities were static because there was no fundamental basis for conflict situa- tion to force a change. There is no private property, especially land property. Therefore, the class relations do not appear in these com- munities. The monarch, an organizer of the community, im- poses himself as a despot. He appropriates the surplus production and expropriates the property of the whole society. The Villagers hand over their surplus production as a tax, rent, or gift to the monarch. 25 Division of labor between town and village is rare. Therefore, there is .essentially no conflict and antagonism between workers because the dOminant mode of production is agriculture with handicrafts a subordinate mode. In fact, crafts supplement that mode of production but little else. The monarch is the symbol of unity between communities and guarantees their security. The absence of private land ownershir>and the absence of conflict between Villages and towns, agriculture and crafts are the keys to understanding the development pro- cess of the social formation of the Asiatic pre-capitalist period. Because there exists no basis for conflict between individuals and the monarchy, there is no desire among the people for a new socioeconomic system. The established social formation continues in spite of the external factors which occasionally destroy such a social formation (i.e., tribal invasions or wars). Marx says: The simplicity of the organization for production in these self-sufficient com- munities that constantly reproduce them- selves in the same form, and when acciden- tally destroyed, spring up again on the spot and with the same name--This simplicity supplies the key to the secret Of the un- changeableness in such striking contrast with the constant dissolution and refounding of Asiatic states, and the never-ceasing changes of dynasty. The structure Of the economical elements of society remain un- touched by the storm-Clouds of the political sky. (Capital I, pp. 393-394). 26 The Asiatic pre-capitalist modes Of production and their social formation lasted centuries without any significant change in the socioeconomic system. It was such conditioned situations that retarded historical de— velopment and kept social evolution static which made them vulnerable to the penetration of the colonial capit- alist countries in the last centuries. It was the pene- tration by the European capitalist mode of production, and its social relations which destabilized the established social formations of these pre-capitalist Asiatic societies and paved the way for creating a new social formation, changing the dominant mode of production in these societies that were mostly agricultural and nomadic. Change arose, not from the internal requirements of these societies, but from requirements of the colonial cap- italist countries of the eighteenth and nineteenth centuries. This produced the fundamental dilemma of development vs. underdevelopment or, in our conceptual terms, the emergence of core and peripheral capitalist social formations. “As an Asian country, Iran had the same characteristics that are described in the Asiatic social formation. Incorporation of Iran into the colonial capitalist polity occurred at the end of the commercial phase of capitalist development in Europe. It was forced into a semi-colonial situation because of its strategic conditions and the rival relations of two colonialistic countries, England and Russia, from the early nineteenth century. 27 Under such a Situation, industrial and commercial production started to flow into the country and affected the internal handicrafts and the factories which were going to bring new enterprise. The existence of the des- potic monarchy system, lack of industrial development and division of labor between towns and villages, domination by the government in all spheres of social life, absence of the security of private property, and the existence of the pre-capitalist mode of production paved the way for the disarticulation of the social formation by colonial capit- alist relations. The above situations did not allow the emergence of an independent bourgeois mode of production but sustained the tendency which was progressing. The con- sequences were the disarticulation of the economy, emerging dependent bourgeois relationships and the involvement of indigenous merchants and craftsmen into the imposed peri- pheral capitalist mode of production. Emergence of the dependent bourgeoisie from the semi-colonial period to 1978 was the major effect of capitalist development on Iranian social formations. The emergence of dependent bourgeoisie in Iran dates to the early nineteenth century when the Treaty of the Irano-Russian War was signed in 1828. From that period Iran was in a semi-colonial situation until its Constitutional Revolution in 1906 that changed this semi—colonial status to a neo-colonial relationship. The culmination of this neo- COlonial period was the Reza Shah's state capitalist period, 28 from 1926-1941. The process continued, then, until the 19605 when international events and internal social forces pushed the social formation into a new stage characterized by the domination of the dependent bourgeois mode of pro— duction and its social relations. The social reform of 1962 announced the polarization of Class relations, that established the peripheral capitalist mode of production in Iran. This work will examine the above-mentioned statements to see whether or not the dependent bourgeoisie was the consequence of the development of the peripheral capitalism. If it was, how and why did it dominate the society in the period 1962-1978? Definitions of Terms Presented here are definitions of the major con- cepts which are applied in this study. The bourgeoisie is a Class in a capitalist society which controls the means of production, industries, banks, transportation, etc. The Western bourgeoisie is de- fined by the nature of its activities; it is divided into industrial, commercial, financial, and agricultural bour— geoisie. The industrial bourgeoisie's surplus Value is the origin of capital accumulation; the commercial bourgeoisie has profit; the financial bourgeoisie has interest; and the agricultural bourgeoisie collects rent. We can also divide 29 the bourgeoisie into three sub-Classes: the big bourgeoisie, the middle bourgeoisie, and the small bourgeoisie. In this situation, socioeconomic and decision-making power are in the hands of the big bourgeoisie. The divisions among the bourgeoisie are related to the stages of development Of capitalism in the West. In the early age of capitalism, capitalist activity was con- centrated in merchandising and trade activity. After the industrial revolution, the industrial bourgeoisie developed rapidly and overcame the commercial bourgeoisie. The agri- cultural bourgeoisie invested in the mechanized agricultural sector. The financial bourgeoisie undertook the highest level of corporate capitalist activity, becoming involved in banking and capital investment in the core and the periphery. A11 strata of bourgeois activity are related to each other in the market, both on internal and international levels. The division of the bourgeoisie into strata is use- ful in analyzing its nature and its requirements in the de- velopment process. The genesis of the independent or indegenous bourgeoisie in peripheral societies, especially in Iran, was spurred by the introduction of Western capitalism and de- pendency on the core. Because of its pre-capitalist forma- tion, Iran did not develop bourgeois enterprise in the same way that the Western countries did; rather, during the col- onial period and afterward, its genesis was influenced by 30 Western capitalist penetration and any indigenous tendency was usurped and steered toward dependency. This study will return to this concept throughout. The concept of bourgeoisie in capitalist terms is a new phenomenon in Iranian literature which emerged when the capitalist mode of production influ- enced the society. The concept of dependence is vital to the core dis- cussion of this work. A branch of the Dependency/world sys- tem perspective describes the development of a capitalist mode of production in so—called Third World countries as peripheral to and dependent on core countries. This per- spective states that because of the nature of the world capi- talist economy, which searches for surplus, and the internal conditions of peripheral countries, the development of capi- talist relations and forces are imposed on them. From this perspective, the requirements of the world capitalist econ- omy make such a mode of production necessary; though they are not in the interest of Third World'countries, but con- ditioned by and dependent on foreign organized tendencies. This explanation seems reasonably congruent with the socio- economic development Of Iran since its domination by nine- teenth century capitalism. Therefore, any explanation of the political economy of Iran should be considered within this context. The definition by Sontoz of dependence will help Clarify this explanation. 31 Dependence is defined as: a situation in which the economy Of certain countries is conditioned by the development and expansion of another economy to which the former is subjected. The relation of de- pendence (is present) when some countries (the dominant ones) can expand and be self- sustaining, while other countries (the de- pendent ones) can do so only as a reflection of that expansion, which can have either a positive or a negative effect on their im- mediate development. (Santos, 1970, p.23). Peripheralization here refers to the process through which the underdeveloped economies of these countries have been integrated into the world capitalist system and made complementary, secondary, or subordinate to the economies of the core or advanced countries. Having explained these concepts, some other terms which are used throughout this study should be defined. This is necessary before beginning analysis so that key words can be commonly understood in the context of this work. Dependent bourgeoisie belongs to peripheral countries, as a class with close ties to foreign capital and monopolies. Their interests are related and interdependent. The nature of the dependent bourgeoisie depends on its activities and it is divided into various strata, such as bureaucratic, commercial, industrial, financial, and agricultural. The major criteria of dependence and the development Of a dependent bourgeoisie in a given society or peripheral Country are: 32 a. Domination of various groups and the regime by world capitalist economicwent into anarchy, people fled the cities and the economy was in disaster. Such situations prevailed in different periods of Iranian history. The presence of a large variety of minerals, from oil to salt, gave each part of the country an opportunity to be self-sufficient and helped to develop crafts and com- merce on a local, regional and world level. Trade routes, such as the "Silk road" and "Shahanshahi road", had joined Iran to the Near East, Central Asia, Middle East and Europ- ean countries before the sixteenth century. Issawi dis- cusses their effects: ...However, the shift of world trade to sea routes since the sixteenth century deprived the ancient roads of most of their importance. And, in an era of sea trade, Iran was under severe handi- caps. Not only is its coastline short and inhospitable, but it is cut off from the heart of the country by high and rugged mountain barriers. It was not fortuitous that Iran did not have any large seaport on the Persian Gulf until the development of the oil fields began in this century. And the remoteness of Iran from Europe by sea, until the opening of the Suez Canal, its inward location, and its isolation left it outside the influence of the currents of trade and ideas that were flowing over other parts of the Middle East. (l97l:3). 97 The complexity and length of Iranian history neces- sitatesreviewof the fundamental aspects of her development process to understand the domestic emergence of peripheral capitalistm and its consequent development of a dependent bourgeoisie. PRE-CAPITALIST SOCIAL FORMATION~-1828 Review of the pre-capitalist formation of Iranian society is necessary, first, because it is the perspective of this study to approach any social phenomenon from its origins historically in order to be able to analyze its dialectical relations with other phenomena, and the reasons for its emergence and existence. Second, the nature of the pre-capitalist period in Iran:n5a controversial issue in present Iranian studies. Until two decades ago Marxist and non-Marxist studies used a Western model to study this period of Iranian history. Recent developments in Iranian socioeconomic con- ditions and their societal reactions have led social scien- tists to reconsider their use of this model because of its abstraction and failure to be consistent with recent Iranian events and conditions. Whether the Iranian pre-capitalists social formation conforms to an Asiatic or feudal model is beyond the scope of this study. However, it should be noted that conformity with a feudalistic model is unlikely because of some speci- fic Characteristics which have shaped the country's historical development. 98 Those listed below are particularly important to this research. 1. Within the absolute domination of the monarchy system there was no security in capital, crafts, or trade activity. In an autocratically con- trolled society the people serve at the pleas- ure of the monarch. Whatever they possess is at his disposal. There was no private ownership of land because all property belonged to the monarch, and his court. Everyone was a subject of the “King of Kings". - There were no differences between towns and vil- lages from a production Viewpoint. Both town and village residents produced agricultural and craft products for their own needs. A town was a princely camp. The tradesmen, craftsmen and merchants lived in Villages and towns but their main jobs were agri- culture and they held their land for farming. Landholders were also merchants and lived in towns rather than in villages. There was no conflict situation between land holders and merchants because most filled both roles and all were subjects of the monarch. The dominant production was agriculture but other industries production have Created con- flicts throughout Iran's history. Such kinds of production included the nomadic way of life and low level of commerce and trade. The monarch was the leader of one of the major tribes which gained (at least temporarily) as- cendancy over other tribes. Monarchies, though absolute, were subject to overthrow and revolutions created by other Iranian tribes or invasion from outside. This created critical issues for Iranian production because any poli- tical coup or invasion by foreigners meant be- ginning the process of settlement, trade and agriculture all over again. 99 Fragmentation, conflict and stagnation made develop- ment toward a new social formation difficult. Physical conditions, dissimilar cultural and ethnic groups and, most of all, differential development of means of production, aided the monarch to dominate all processes of social for- mation and suppress progress toward integrated modes of pro— duction. These characteristics differed from those common to Western pre-capitalist societies. Therefore, we need to have a model different from those used earlier to study such societies. Some social scientists have suggested the con- cept of an "Asiatic mode of social formation" suitable for such societies. Although this notion has some deficiencies which cannot be considered in applying the model, it is the one most appropriate to suCh societies. This study has benefitted from the use of this model. The period in which Iranian society was incorporated into the world capitalist market will be viewed from its perspective. First, it is necessary to mention some Characteristics that distinguished Iranian society in its pre-capitalist form. Asiatic Mode of Social Formation The history of Iran in the Gajar period is a rich lode for analysis of the pre-capitalist Asiatic social for- mation and its metamorphsis to a peripheral social formation. 100 The characteristics of Asiatic despotism and mode of pro- duction which have been described by many historians and social scientists were fully represented in this society. The role and power of the "Kings of Kings " (Abrahamian, 1974: 9), and their rise and fall, during this period, is an ex- ample of Marx's notion. The monarch owned all lands, the major revenues and the‘dominant means of production. "He could reclaim the property of those he disregarded. His word was law. He had the sole right to give acessions, privileges and monopolies." (Abrahamian, l974:9). The King intervened directly and indirectly in a whole peoples' individual and collective spheres of activity. He intervened in the market; his courtiers could and did fix prices and controlled buying and selling of anything produced, imported and exported throughout the country. His army of- ficers and administration from ministers in the capital to Khadkudas in the Villages arbitrarily enforced his orders and initiatives. Sir John Malcom describes the character of the nineteenth century Gajar regime in his comment that, "The monarchy of Iran is one of the most absolute in the world" (Malcom , 1829:303). Under these conditions the processes of capital ac- cumulation and merchandizing were distorted by the arbitrary power of the monarch and his courtiers. It is a characteristic 101 of Asian society, especially in Iran, that property relation- ships are determined by the political powers which often do not let natural social and economic relations evolve to their historical and logical conclusions. This, thus, undermines the social formation as happened in European countries. Another major characteristic of Iranian society has been its socioeconomic and politico-cultural stability, as conditioned by nature and the characteristics of the ruling monarchy. If a monarch was powerful and could dominate his administration throughout the country, the society was or- ganized and stable and communications were possible. 'If the monarch was weak, without effective instruments to enforce his power, the country went into anarchy. Such fluctuating societal conditions have reoccurred in Iran since its history began. The Gajar period was an example of this undesirable fluctuation. With both a powerful and a powerless monarch in this period, the country was fraught with ambiguity and disaster, major factors in its peripheralization when European capitals began their penetration. The conditions mentioned above were major obstacles preventing Iran's progress toward natural economic and socie- tal development. They provided negative internal forces that paved the way for England and Russia to interfere in the econ- omic and political affairs of Iran. 0"- In In I"? 102 Dominant Mode of Production The dominant mode of production in pre-capitalist Iran, before the constitutional revolution of 1906, was an Asiatic mode. This was a modeih.which the ruling class and its bureaucracy extracted tribute from the peasants in the form of the fruits of their production. Although there were other modes of production and other systems of exacting surplus from other social classes (such as: merchants, crafts- men, long distance tradesmen and nomads) the dominant mode that maintained the monarchy and the state bureaucracy, was agriculture and its land revenues. These crucial conditions existed in the middle of the nineteenth century before land revenues began to decline,causing serious problems to the state machinery of the monarch. Amin mentions the existence of various modes of pro— duction within a single social formation in these Asian socie- ties. Since a formation is a group of modes of production, every society actually presents the picture of a complex group of more than two classes: feudal lords, serf-peasants, free peasants, commodity-producing craftsmen, and merchants in feudal Europe; imperial court and "gentry" officials, communal peas- ants, free petty craftsmen and wage-earning craftsmen employed by entrepreneurs to produce commodities and merchandize in imperial China; ... (Amin, 1976:24-25). Associated with this dominant mode of production in the late nineteenth century, was a dominant social Class which Halliday characterizes as follows: The socially dominaigBClasses were com- prised of the tribal leaders, larger land- owners, merchants, and aristocrats in the court and civil service. Despite their land ownership, many of the agricultural proprietors lived in the towns (Halliday, 1979:14). While the main source of revenue for the government in this period was land revenues and the land tax, the emer- gence of Semi-colonial relations between Iran and the colon- ial capitalist countries, Changed this trend. Because of declining state revenues from land, the government needed other revenues to support itself. The only alternatives the government had were to sell the country's raw material resources to foreign capitalists or to sell state lands to the large landholders. Both alternatives led to cash crop production. Under this mode of agricultural production, self- sufficient Iranian agricultural communities began to evolve into single crop export centers. Around 1850 Iran began to produce crops for export, such as cotton, opium, silk and tobacco. The incorporation of Iran into colonial capitalist relations,held by the colon— ist countries of Russia and England and the Gajar dynasties, provided a situation that altered the dominant mode of pro- duction and, consequently, the state revenues. It was the beginning of a new period for Iran when the country would experience a new social formation and begin to develop peri- pheral capitalist relations with the colonialist countries. 104 Consistent with the social formation, which was in progress, the principal source of government revenue shifted from agriculture to export customs on oil and other raw ma- terials. This marked the dawn of a new relationship between Iran and the colonialistic capitalist countries. (position of the Merchants and Craftsmen in the Pre-Capitalist Period In the pre-capitalist period in Iran, as discussed, merchants and craftsmen did not achieve the status of bour- geoisie as these groups had done in Europe since the six- teenth century. The major Characteristics of Iranian pre- capitalist merchants and craftsmen were: 1. They could not establish an independent system of production because of their dependence on the dominant mode of production and its relation to the state and monarch. 2. Both landholders and merchants lived in towns, and had common interests because the merchants held land and the landholders were also mer- chants. 3. Most craftsmen had common interests with the peasants; crafts were the secondary occupation in the towns and villages. 4. There was no competition among merchants and craftsmen because of the state-enforced stability of the society and the absolute power of the regime, which could expropriate their property and means of production. 105 5. Motivation to develop new technology or markets, both of which would help increase production, was lacking because of the limitations of their present market, consumption, income and a self- sufficient economy. 6. State revenues and income were raised from land revenue, taxes levied on landholders, tributary and some customs duties. If necessary the govern- ment began to expand its territory by invasion of other territories. 7. Population size and labor force were held stable because of a high death rate and the domination of rural and nomadic life styles and social for- mations. Commerce, crafts and domestic manufacture were, for the most part, stable, stagnant and fragmented, by the early nineteenth century. The introduction of Iran into the capitalist market, emerging capitalist relations, and the ef- fects such Changes had on merchants and craftsmen were a few of the influences, mostly external, affecting Iranian social formation. They moved Iran to an unstable and unpredictable social position and Challenged the artificially stable Class relations. On the basis of these socioeconomic factors, it is erroneous to call the pre-capitalist merchants and craftsmen bourgeoisie. On the contrary, they were traditional and 106 domestic merchants and craftsmen. The bourgeoisie and bour- geois relations emerged when capitalist goods and ideology imported from Europe drew Iran into capitalist relations by establishing a dependent capitalist mode of production. If the capitalist mode of production had not been established in European capitalist countries, the Asian countries would never have undertaken dependent capitalist production. More traditional social formations in these Asian countries might have continued for years had not these processes been in- terrupted by capitalist penetration.8 SOCIAL FORMATION IN THE COLONIAL PERIOD, 1828-1906 The Irano-Russo wars in the early nineteenth century ended with the concession, by Iran, of Turkmanchi and Gholestan. This separated Iran from the fertile farm lands and decreased government revenues. Under economic pressure, the government began to sell state lands to large landholders, tribal lords and merchants, and to grant mining and eConomic privileges to foreigners, especially the British and Russians. This means of raising revenue has continued to this day. Regarding the controversial colonial period, some sociologists believe that a particular form of colonial rule or external influence provides for the political and economic 107 emergence of a powerful native elite class tied to advanced capitalist countries. This group can take control of the state and reorganize the state machinery and institutions to create a favorable environment for accumulation of capital and in- dustrial assests., Although this happened in Iran, it did not result in Iran becoming an independent capitalist country. Rather, Iran became more dependent and its economic and political institutions became more peripheralized. Resnick says: ...For some countries, the process of colonial development led to the establishment of the necessary social environment for an increased concentration of wealth in the hands of a landed elite from whose ranks rose a merchant capitalist class. .These two social groups, often interwoven historically by family or marriage, produced a ruling oligarchy directed against a large peasant body whose ties to land and landlord are intensified by a variety of traditional and political schemes. The turn to commercial endeavours by this ruling oligarchy must not be frustrated by colonial rule or by external forces. In fact, where this class made a successful adjustment to the external market and where it formed a successful political coalition with a colonial government or with foreign capitalists, then it served as a vehicle for capitalistic development... (1973, p.133). Although Iran in the nineteenth century saw the estab- lishment of such a social environment, she could not emerge as an independent economy because of the nature of her colon- ial capitalist development and the characteristics of pre- capitalist Iranian society mentioned before. 108 To sum up, it was in the early nineteenth century that Iran moved into the semi-colonial camp and lost its independ- ence. The Russo-Iranian war of 1828 and the intervention of England in the affairs of Iran since 1855 had paved the'way for this situation. ~Iran continued in a semi-colonial status until the Constitutional Revolution of 1906 against internal absolute monarchic rule and external colonial domination. Although the revolution did not succeed in disrupting colon- ial domination and internal despotism, it did Change the socioeconomic formation of the society to one in which pre- vailing rulers began to rely more heavily on surplus pro- duction. The resulting new social formation, neo-colonial re- lations, pushed the society closer to a peripheral condition within the growing world capitalist economy.9 Social Formation in Semi Colonial Period 1828-1906 It was the penetration of capitalism in the early nineteenth century which resulted in the emergence of iseml-COLODiall capitalism, and then peripheral capitalism, in Iran. Although the country had a history of long dis- tance trade, independent merchants, and craft production its Asiatic social formation did not allow the assumption of in- dependent capitalist status and relations. Amin explains this point: 109 Money and trade are, of course, older than capitalism. They appeared as soon as pro- ducers had a surplus available and when division of labor made possible exchange of the producers in which this surplus was incorporated. But not all exchanges are commodity exchanges: in pre-capitalist times the bulk of the exchanges effected between petty producers... within a single society took place without any specialized trader as intermediary, and often even with- out money playing any role. (1976:32). With the involvement of Iran in the world capitalist economy, Iranian merchants began to plan for their first inde- pendently merchandized capital investment, through which they were supposed to engage in large-scale internal and foreign trade. The purpose of such planning was to attempt to establish a nascent independent bourgeoisie in Iran for the first time, and restrict the domination of foreign capital which threatened the existence of domestic merchants and craftsmen. The rise of banking, which was emerging from control of the money leaders, appeared not only in major cities, but also the smaller towns. The ”SOVijDUiog" firm established several local firms dealing in trade with Russia. Examples of famous companies of this period which arose in various cities of Iran were: "Masudie", "Aminie", "Commer- cial Company of Iran", "Mansurie", “Ettehad”, "Islamie". Attempts of merchants in Iran to establish an in- dependent bourgeoisie before and during the Constitutional Revolution of 1906 were considerable. Behind their efforts 110 to restore a national bank in this period was a desire to create a native bank for commercial capital and also for industry. This was intended to break the increasing domina- tion of foreign banks over the economy of Iran. Despite these efforts other mainstream economic and political activities were in process to dominate the economic development of Iran and turn it toward dependent development. Toward this end some famous merchants communicated with foreign capitalists and companies. They were responding to internal pressures which prevented the development of a nascent bour- geoisie in Iran. Issawi described this situation: The absence of normal conditions for the development of a national bourgeoisie and the situation created by the increasing penetration of foreign capital and the dominance of feudal relationships made it seem expedient for the bourgeoisie to in- vest in farming, whose products (cotton, opium, etc.) were in great demand in world markets. Thus, as a result of the dominance of foreign banks, the resources of the nascent Iranian bourgeoisie became a power- ful instrument of the colonial policy and were directed to the production of agri- cultural raw materials required by the industry of capitalist countries. Through loans and banks, foreigners subjected the whole financial system of Iran to their control, and Iranian national capital itself was put in a dependent position. This had a disastrous effect on the process of primitive accumulation of capital, and more generally on the character of the bourgeoisie. Nonetheless, the period between the 18805 and the First World War saw definite progress in the process of primitive accumulation of capital in Iran, conditioned by the drawing of the country into the orbit of the world capitalist market and by other factors. (1971, pJ47). 111 The competition between the Iranian merchants, who wanted to progress toward a modern bourgeois formation, and the foreign capitalists, who wanted to penetrate the Iranian market for commercial activity, favored foreign capitalism because of their, "privileges and possibilities which arose out of the system of capitulations forced upon Iran and which opened wide doors to foreign capital" (Issawi, 1971:47). It was the intervention of Russia in the north and England in the south which put Iran in such a position. The treaties and political and economic agreements between Iran and those countries were all against Iran's interests. The merchants had to pay numerous arbitrary taxes, which were an obstacle to their develOpment. But, at that time, foreign traders were exempt from internal duties and taxes of all kinds, an unfair provision the Iranian government supported. Although since the middle of the nineteenth century, slow development of native and independent factories and industries had been underway, they could not advance as modern industries because of "...the rapid course of political de- velopments in Iran, the transformation of its territory into a war zone and the further loss of state sovereignty because of the venality of the ruling Classes..." (Issawi, 1971:47). Therefore, most of the independent factories and industries which had been established over the last few years in this 112 period began to close down. Issawi says: "The example of Amin al-Zarb serves to trace the descending curve in the destiny of the nascent bourgeoisie which strove to invest part of its capital in independent industry". (1971, p:49). "Foreign goods penetrated unhindered in all towns and regions of Iran...Thus, in the markets of that country foreign capital held a dominant position" (Issawi, 1971:47). Thus Iranian merchants could not have an active role in the economic activity of this period, they had two choices, either to cooperate with foreign-oriented trade or to fail and leave the marketplace. Because the fate of all native products was dependent on foreign companies, the native merchants had no choice but to play only an auxiliary part. The fol- lowing table shows the economic tendencies of Iran in the nineteenth century. TABLE 3: IRANIAN IMPORTS AND EXPORTS FROM 1800-1900 (In sterling) 1800 1820 1830 1868 1880 1900 Imports -- -- 2,000 2,500 4,669 5,000 Exports -- -- 1,500 2,331 3,000 SOURCE: Based on Issawi's The Economic History of Iran, 1971 113 The PrOcess of Neo—colonial Formation 1906-1925 The revolution of 1906 gave the Iranian people the freedom to participate in political activity and, most im- portant, personal security. It ensured economic safeguards for all sorts of private property and capital accumulation -and limited the power of the monarch. These provisions were necessary for capital accumulation and had been absent in previous social formations. Provoked by foreign-oriented capital and ideology, the revolution was a bourgeois up- rising. Although there were gaps between its objectives and its achievements, the revolution of 1906 paved the way for official attempts at commerical progress toward peripheral capitalist modes of production. It smoothed the shift in dominant modes of production from an Asiatic mode to a cap— italist mode. This new mode of production, which created its own new social formation, operated differently in Iran than it did in the western countries. A major characteristic was its dependence on foreign-oriented capital and imports. The changes in economic development in Iran required a new social formation. This happened in Iran in the middle of the nineteenth century when the merchants and other inter- ested groups began to participate in economic development. However, this development was originated by the colonial capitalist countries of Europe and feudal-capitalist Russia. 114 The only obstacle was the monarchic political system. Al- though the monarch. had been dependent, since 1928, on foreign colonial countries, especially Britain and Russia, the Asiatic social formation presented an obstacle to the expansion of bourgeois relations. There was an attempt to change this superstructure for further development by the new dependent bourgeoisie and allied interest groups, the intellectuals, workers, and urban tribes. With a scenario prepared by England, the monarchic system was overthrown in the Revolution of 1906. Thus, the process of social formation which was begun in 1828 ended in the Revolution of 1906. This was a bourgeois revolution, but its motivation was the unhappiness of the urban workers, dependent bourgeoisie, the intellectuals, and the capitalist countries. The revenue of the government had decreased and Iran was ready for a strug- gle that began with the uprising Of the people and ended in the change of the monarchic and Asiatic formations to a poli- tical constitutional system. Although the revolution of 1906 was a brougeois revolution and should have been led by bourgeoisie, it was led by big landholders-merchants, tribal leaders and some of the government bureaucrats with the support of England. The consequence of the revolution did not improve the lot of the 115 urban poor, independent bourgeoisiecm other progressive groups, but aided the development of a dependent bourgeoisie to keep Iran in the hands of the British capitalists. Thus, the political system of the new government was in the hands of those who were interested in the incorporation of Iran into a new colonial system. Issawi mentions some activities of Iranian merchants: ...The financial king of Southern Iran was Hajji Agha Mohamed Muin-Jujjar, whose real estate aroundéAhwaz and on the Persia Gulf Coast was put at one million Tumans,,, and was closely connected with the British. Another merchant, Hajji Named Jagi Shahrudi, was reputed to be very rich, had a large import and export business with Russia... as a result of the increasing involvement of Iran in the world capitalist market at the beginning of the twentieth century, the number of the representatives of large Iranian traders in the various world capitals rose appreciably. (1971, P.44). Iran was in the process of becoming a new colony of a capitalist country entering a rapidly falling world capit- alist economy. By the Revolution of 1906, Iran resembled a new colony in the process of becoming a peripheral country by developing dependent bourgeois relations. English in- fluence increased after this revolution and the political process of Iran was determined mostly by English interests. The society was getting involved, peripherally, in the world capitalist market which was a new colonial orientation. This process developed from 1906 to 1926 and entered a new stage 116 with the rise of Reza Khan, who became the monarch of Iran and was called Reza Shah. To sum up, the industrial.bourgeoisie could not develop as an independent commercialbourgeoisie because of the de- struction of the crafts and native factories and lack of capital investment in this sector. In addition there was the import of foreign industrial products. These processes advanced the country toward a peri- pherization of the infrastructure and a newly emerging depen- dent bourgeoisie that was supposed to cooperate with land- holders and tribal leaders, on one hand, and foreign capit- alists, on the other. Amin describes this process in peripheral economies: In the East and Latin America the new dependent national brougeoisie generally grew out of the classes of large landowners and higher civil servants, and in some cases also out of the merchant Class. The large landowners, often merging with the political ruling groups, by adapting to the requirements of export agriculture, grew stronger and changed into bourgeoise-type landowners (Amin, 1976-77:29). The consequences were predictable. The dependent bourgeoisie (commercial, industrial, bureaucratic, and fin- ancial leaders) with their internal and external allies (the ruling Class, the state, and the colonial capitalist countries) became Visible throughout the society and took control of its political and economic structures. This took place over 20 years (1906-1926) and culminated in the Reza Khan becoming the "Bela Shah". The previous political and economic formation 117 was on its way out as the dependent bourgeoisie gained power and state capitalism developed. Rising State Capitalism Between 1925 and 1941 Reze Khan.presided over a period of economic and social reforms in collusion with a dependent bourgeoisie financed with foreign-capital and aided by the leadership of England. These reforms succeeded for several reasons. First, they were nationalistic in character, which the people desired. Second, they favored the colonial capitalist countries, such as England, Germany and France. Third, they went against the increasing tide of communist ideas coming from socialist government on the northern borders of Iran. Foreign capital thus joined with nationalist tenden- cies to create a central government to carry out social and economic reforms. The Gajar dynasty had not understood the worldwide economic tendencies and could not respond to the internal and external pressures affecting Iran and was thus fated to be replaced by the powerful Reza Shah who began to reform the social, economic and military organizations in 1926. This phase in the history of Iran, the neo-colonial period, is called state capitalism and lasted from 1926-1962 in spite of some upheavals and changes in government. Keddie's various explanations of the Iranian economy in the period 1925-1941 shows how and why the state capitalism 118 developed in Iran and was connected with the European world market. She explains: Given the existing social structure and low purchasing power of most Iranians, the state was the logical initiator of develop- ment. Private capital was too undeveloped and too attracted to "safe", quickly profit- able fields like land and usury to be directed to industry, which often invovled high initial investment, slow returns, and competition with Western goods...it was in the West's economic interest to have modern transport to facilitate the sale of western goods, and it was in Iran's interest to encourage inter- nal trade. Since the late 1920's Western powers have backed efforts to improve Iran's transportation, military-strategic consider- ations also motivated both Iran and the Western powers. (Keddie, 1981:99). After coming to power Reza Shah and the dependent bourgeoisie began overpowering local governments and big Khans who were obstacles to centralizing political power. Meanwhile, they sustained the revolutionary groups, intel- lectuals and local movements, such as those of Jangal and Azarbaijan. In a few years, all the necessary steps for supremacy of the dependent bourgeoisie had been carried out with the support of England. The goals of the bourgeois revolution of 1906 had been thoroughly obliterated and Reza Shah had established a monarchical dictatorship throughout the country. By censorship and supression of any ideas and political organizations, Reza Shah molded economic, political and social reforms without the participation of the people. 119 The government itself attempted to play the role of the bour- geoisie, and invested in the public and private sectors. This led the government to a new kind of capitalist development, known as state capitalism, and created a new bourgeoisie, a dependent bureaucratic bourgeoisie, that later paralyzed the . development of Iranian society. For instance, the new, re- stored bureaucracy, which will probably hold the state's means of production and commercial activities for decades to come became a powerful stratum of the dependent bourgoisie. This stratum, by benefitting from public revenue, landhold- ings, and participation in state capitalist programs, played a significant role in the state's capitalist period by sup- pression of both reactionary and progressive groups. Then it became the Close ally of foreign capitalist countries, particularly England. The main Characteristic of state capitalism in this period was its dependent bourgeois nature. Because the state was supported and came into power through intervention from leading foreign countries, it was the major investor in in- dustrial and import/export sectors. The state employed a domestic policy which was initiated by foreign countries, in order to modernize Iran from above without paying attention to the needs of the people and the society. The result of such a policy was revealed during WWII, when foreign countries invaded Iran. The entire political 120 system collapsed within 48 hours and the people not only did not support the regime, but also opposed its foreign supporters. The reason for this was embedded in the historical develop- ment of Iranian society over the past centuries. The conse- quences are apparent today: the emergence and development of a dependent bourgeoisie. This happened in Iran when modes of production were changing. The old landholding revenues, systems of tribute and tax levies were not profitable with a capitalist mode of production and need to be replaced with a system that would respond to the requirements of a world capitalist economy. A centralized and powerful government was the basis for the next step: disarticulation of the economic sectors. This occurred through Reza Shah's control of the power system. An allied group was recruited to support the Shah's interests. This was the crucial stage and its results were the basis for future development of the dependent bourgeoisie. The political system invited the big landholders, merchants and intellectuals to share in running the country. The result was a political system organized by alliances of landholders, bureaucrat3., merchants and a few tribal khans, to facilitate the implemen- tation of foreign-oriented policy. Although the failure of this process occurred after the Shah's white revolution of 1962, it began through the development of dependent bourgeois 121 relations. Before the White Revolution these groups were influential and controlled the socio-political and economic organs of society through a coalition with the dependent bourgeoisie. The agricultural sector remained in the hands of the land-owners, tribal leaders and Khans; revenues and rents were_channeled into the state treasury by those groups. Meanwhile, they secured the nomadic and rural areas. Therefore, the disarticulation of Iran was accomplished with the help of the world capitalist economy through state capitalism. World capitalism disarticulated the undeveloped areas, such as nomadic and rural areas, that had traditional modes of production, peripheral commercial and industrial urban areas. This breakdown of the agricultural and nomadic production, on the one hand, and the dependent indus- trial and commerical production on the other, was the main goal of the state Controlled by Reza Shah, his court and administration, and supported by the world capitalist market. This process produced a superstructure, within which new social relations were established, known as the despotic state, to serve the infrastructure of dependent state capital- ism. Through dependent state capitalism the society achieved some social, cultural, economic and political reforms. Thanks to such reforms, raw material exports of oil and minerals and import of such industrial products as capital and consumer 122 goods were accomplished. This activity increased through the end of the first decade of Reza Shah's reign, but slowed down with the worldwide economic depression of 1933. State capitalism pushed Iran toward a relative stable situation under the supremacy of the world capitalist econ- omy. Having led in the reforms, the dependent bourgeoisie were in a favorable position to develop its various activi- ties. Thus, the merchants, petit bourgeoisie and some other independent economic groups started to cooperate with each other in order to merge into the world capitalist economy. Their activities served to advanced the interests of capit- alism through the political organs of the state. To see how conflicts arose during this period, it is necessary to trace the various modes of production in Iranian society. In the precapitalist period nomadic, agricultural and urban-oriented crafts and commercial activities were the basis of production and the state policy was to extract the surplus, mostly from agriculture, to survive. Beginning with Iran's entry into the world capitalist market in the nine- teenth century, however, its production Changed to depend on exports of raw materials and imports of industrial materials. This caused serious conflicts and contradictions in the late nineteenth and early twentieth centuries. The con- flicts among various modes of production appeared as con- flicts among the tribal Khans, landlords and urban residents, 123 who were seriously affected when capitalist relations emerged to dominate the economic and political organs of the society. It was in the state capitalist period that .this world capitalist tendency succeeded in Iran in spite of a lengthy civil war, uprisings, revolutions and the coup d' etat in 1921. The emerging state capitalism changed the tribal char- acteristics of the state because the dominant mode of pro- duction involved switching from nomadic and agricultural pro- duction to foreign-oriented industrial and commercial pro- duction. It took about two decades after the bourgeois Revolu- tion of 1906 to restore social relations throughout the coun- try. In this period, it was clear that the state's bourgeoisie had succeeded,.and had disarticulated other modes of production to stabilize the society for state capitalist relations. Keddie's interpretation of the neo-colonial relations of Iran and the European world market is anexplanation of how the socioeconomic formation began to change. She explains: Earlier Western activities had supported traditional ruling groups, but Western in- fluence on the socioeconomic structure undermined old relations and gave impetus to introduction of reforms and economic changes. The West continued to influence Iran's economic structure via world market conditions. Western demand and Iran's econ- omy limited Iran's exports to oil, carpets, and agricultural goods, while expensive manu- factured goods were imported, and Iran's bal- ance of trade continued to be negative. (Keddie, 1981:98). 124 Keddie describes the socio-political conditions of life by 1930 in Iran. By 1930 the foundations for a program of economic modernization from above had been laid. Most important was centralization, accomplished via a growing bureaucracy and a strong army. In the Reza Shah period, the main public expenditure was on the armed forces, which took over half of the govern- ment budget. The army was used primarily to strengthen the government's authority within Iran, over peasants, tribes and urban dissidents. The privileged classes now included more government employees, army officers, students, and merchants. The status of nomads was lowered when they set- tled, while urban unemployment, the out- lawing of trade unions and leftist groups, and laws strengthening landlords helped keep the peasants and workers impoverished. Reza Shah terrorized or jailed potential opponents, and there was no Chance for or- ganized oppositional politics. (Keddie, 1981:98). A glance at the following table will provide some interpretation of development process of this period. TABLE 4: BUDGETARY ALLOCATIONS FROM 1934-41 (AVERAGE INCREASE PER CATEGORY) War 19.6 Finance 10.2 Industry & Trade 19.0 Education 4. Interior 4 Posts & Telecommuni- cation Justice Foreign Affairs Health Agriculture Imperial Court Communication Other SOURCE: Based on Bharier, Economic Development in Iran, pp.65—6 N QWONNHNN O O mucous-Doha O‘D 125 Ashraf's explanation of the characteristics and the functions of state capitalism in early period of the reign of Reza Shah is appropriate as a final point. State capitalism was created in this period through the monopoly of foreign trade, es- tablishment of state banks, commercial agen- cies and certain monopolies, installation of state-owned industries and creation of the state-owned Trans-Iranian railway system. As a result, the state emerged as the largest industrial, financial, and commercial bureau- cratic corporate in the country, and mono- polized the major means of urban economic activities. (1971:66). State Capitalism Between 1941 and 1953 Post World War II was a crucial period in Iran. The exile of Reza Shah, intervention of invaders in Iranian af- fairs, and lack of any political organization and socio- economic integration forced the new and shaky government to demand U.S. support. With the involvement of the U.S. in the region, new socioeconomic and political formations were in process. The increasing influence of the Soviet Union in Iran, especially among workers and intellectuals, and England's weakness after WWII forced the U.S. to sup- port the Western-oriented policies in the region, against any revolutionary action. Ashraf describes the Iranian situation in this crucial period: 126 Once more the contemporary history of Iran- ian society evidenced the rise of an op- portunistic dominant class--landowners, tribal Khans, leading merchants, army generals and top bureaucrats--with the help of colonial powers. In this period, therefore, the Majles, the press, the political parties, the cabinets, and the tribal forces were utilized by British power. When the war approached its end, British imperialism was unable to resist mounting Soviet pressure in Iran, and thus, American power gradually appeared on the scene, and the second stage was constituted. (1971:87). State capitalism, after Reza Shah's exile, deteriorated under the pressure of various political demands for change. The post War world capitalist crisis created the conditions for American influence in Iran, which served to enlarge the dependent bourgeoisie after 1945. Keddie discusses the American influence in Iran. The post-war crisis in Iran, and the de- mand for change from many parts of the population, led even the landlord-dominated majles and government to undertake economic development. American influence in Iran grew, and as the United States was largely respon- sible for stabilizing the post-war Iranian government, it was natural to turn to an American firm for development aid. On the Iranian invitation, the American engineering firm, Morrison-Knudson, made a survey and suggested a development program in August 1945. They put heavy emphasis on agricultural technology and little on industry. Raw cot- ton and wool production were to increase, but no new plants were planned to process them (Keddie, 1981:130). 127 There were some fundamental contradictions in the state capitalism of this period which caused the regime to fall. Although its army, police and administration were modernized, they supressed all progressive groups, and alienated independent political and economic attempts, and betrayed the common people. It was overcome in a few days when the Russian and English armies occupied Iran and there was no opposition from the people because of Reza Shah's political suppression. The monarch's foreign policy attempted to show that the regime was independent, and that its economic and political policy was determined indepen— dently of the capitalist countries, particularly England. He thus encouraged the regime to have relations with Germany. This made England unhappy and World War II was a good oppor- tunity to take action against the regime. England and Russia ousted Reza Shah and took control of Iran as anarchy spread throughout the country. Russia controlled the northern parts of Iran and England controlled the southern parts. With a lack of political organization, political solidarity and in- dependent economic enterprise, the socioeconomic system col- lapsed and the dependent bourgeoisie began to organize itself to build a new political structure with a foreign-oriented policy. The world capitalist countries supported their ef- forts and ultimately urged the first son of Reza Shah, Mohammed Reza, to become the second Shah of Iran. 128 The effects of dependent state capitalism appeared in the first decade of the reign of Mohammad Reza Shah. Infla- tion, unemployment, disease and growing political factions disguised the face of dependency. Most of the industries were closed and the roads and railroads were destroyed be- cause of the dependence on English and American trucks. The situation paved the way for the bourgeoisie to accumulate a great amount of wealth as they supplied the needs of the occupation armies of England and Russia and black market dealings in industrial production flourished. A few years later the newly powerful capitalist coun- try, the United States, appeared on the scene, establishing some Iranian-American commercial firms and marketing cars, buses, and other industrial products. This action threatened the existence of any remaining domestic production and in- dependently growing socioeconomic groups. England, with assistance of the United States, began to determine (all progressive political and economic organiza- tions. It played a major role in reshaping the economic sectors and politiCal system through influencing the land- lords, religious leaders and dependent bourgeoisie, bureau- .cratic and commercial. A new phase in Iranian development was underway. The U.S. wanted to share with England in the oil industries and l— 129 play a role in the development of a dependent bourgeois society. The gap between the native bourgeoisie and various dependent bourgeoisie was increasing and the trend was favor- ing the latter because of the support of foreign capital and governments. A conflict was shaping up between the progressive economic groups and the dependent bourgeoisie and their sup- portive groups such as the landowners and the nomads. It was in the Mosaddeg period that the conflict between these two factions reached its highest point. With the overthrow of the Mosaddeg government, the native and independent bour- geoisie began to decline giving even more power to the de- pendent bourgeoisie. Decline of State Capitalism Between 1953-1962 The last attempt of the independent socioeconomic groups and organizations to take over the state administra- tion was through Mosaddeg's national government. However, this government was overthrown by the CIA and its Iranian supporters such as: courtiers, landlords and other dependent economic and political groups. Keddie mentions the CIA in- volvement in Cbup D' etat of 1953 against the Mosaddeg national government. Although many Iranians knew from the first that the United States Central Intelligence Agency (CIA) was involved in the overthrow of Mosaddeg in August 1953, only gradually did details of these events become available in the Western world. The idea of overthrow became 130 stronger in British and American of- ficial and oil circles over time. It gained some impetus from the replacement of the British labor government by the conservatives and in early 1953, the replacement of the Trumen government, which had hesitated to join schemes for Mosaddeg's overthrow, by the Eisenhower administration, with John Foster Dulles as Secretary of State according to var- ious sources including Kermit Roosevelt, he simplified the British plan and helped get it accepted by the very willing Dulles brothers.... Roosevelt then travelled to Iran to put it into effect via Iranian contacts developed through) American and British sources. She adds: After the overthrow of Mosaddeg, the Shah and those around him were determined to ally with the West and try to develop the Iranian economy along Western lines. The Mosaddeg experience of boycott and the re- fusal of foreign aid made the new regime be- lieve that economic development depended on setting the oil dispute, which had been an implicit condition of American and British backing of the coup. Development was also seen as dependent on loans and direct aid from the United States. (1981:145). The following table illustrates the economic policy of the independent bourgeoisie.It was in this period that the trade balance was in favor of exports. This lasted only a short time before the uprising of 1953 put the dependent bourgeoisie firmly in control and Iranian trade again began to favor imports. 131 TABLE 5: IRANIAN BALANCE OF TRADE (EXCLUDING OIL EXPORTS) 1948-53 (In Millions of Rials) Year ‘Exports Imports 1948 1867 5480 1949 1785 9320 1950 3563 7109 1951 4391 7405 1952 5832 5206 1953 8426 5756 SOURCE: Based on Vizarat-i- I tisad, Amar-i Bazaganr yi kharisi Iran (1981314 ). v- 132 The period after coup d' etat of 1953 was distin- guished by strong support by the U.S. government and some other core countries. The internal situation and external requirements led to some reforms to stabilize the government in Iran through capital investment from the capitalist coun- ‘tries, led by the U.S. Ashraf mentions this point: On this ground, the economic development or using a more precise term, economic growth, was achieved in the Iranian economy through U.S. assistance and the oil revenues. During the post-Mosaddeg epoch, from 1953 to 1960, the volume of foreign currency re- ceived by the government was approximatley as follows... (1971:132). The following tables illustrate the political and economic policies of the government after the coup d' etat of 1953. Table 5 shows the rate of foreign investment in Iran by capitalist countries and illustrates the increasing U.S. activity. Table .3 shows the sources of financial capital and Table 5; continues the information given in Table 5, the Iranian Balance of Trade 1954-1962. TABLE 6: FOREIGN OWNERSHIP OF COMPANIES IN IRAN 1953 COUP D' ETAT Companies Percentage British Petroleom Oil Co. 40 U.S. Firms 40 Royal Dutch Shell 14 Compayne Franchise des petroleum 6 100 SOURCE: COmpiled from various sources 133 TABLE '7: AVAILABLE FINANCIAL CAPITAL IN FOREIGN EXCHANGE 1955-62 (In Millions) Oil revenues 2129 Foreign aid and Investment (US) 1278 British Aid 28 Foreign Investment 100 Total ' 3407 SOURCE: Based on the Bank Markazi Iran. National Income of Iran, 1959-72, Tehran, 1974. TABLE 8: IRANIAN BALANCE OF TRADE, 1954—62 (In Millions) Non-Oil Imports Year Oil Revenues Exports of Goods 1954 10 135 106 1955 80 106 143 1956 146 104 345 1957 167 109 429 1958 291 104 610 1959 323 101 656 1960 364 110 693 1961 395 126 620 1962 443 113 551 SOURCE: Compiled from Bhriar The Capitalist Development in Iran. 134 Position of Dependent and Independent Bourgeoisie in this Period It was after the coup d' etat of 1953 that the depen- dent state of Iran again began extensive import of foreign goods and suppression of all progressive socioeconomic groups and organizations. This was done with the aid of the U.S. Political and economic aid from the leader of the world cap- italist economy allowed the commercial dependent bourgeoisie to have a decisive effect on Iran's economic sectors and channel production to a worldwide market. With an inflow of foreign industrial consumer goods, the dependent bourgeoisie grew rapidly and extended its economic activities. As in the period of the Constitutional Revolution of 1906, the independent bourgeoisie had two choices: either to be destroyed or to cooperate with the foreign-oriented trends and become part of the dependent bourgeoisie. As a matter of fact they went along with the mainstream tendencies and participated in the region's open-door policies toward im- port of world capitalist goods. In a few years, by exporting oil and getting aid from the U.S. the Iranian market Was full of foreign goods and an established commercial agent of the world capitalist market. The transformation of merchants and bourgeoisie into a commercial dependent bourgeoisie helped them to increase their wealth at the cost of the common peo- ple's surplus, and become fat. 135 This concentration of wealth within the hands of a minority commercial group led them to invest their wealth in the other economic sectors, such as factories for assem- bling imported industrial parts, and formed the basis for the industrial dependent bourgeoisie after the White Revolu- tion of 1962. GrOwth of the dependent commercial bourgeoisie and a dependent industrial bourgeoisie caused independent bour- geois activities to fail. State-run factories also went bankrupt and the intervention of the state could not remedy the general collapse of all kinds of internal and independent factories and trades. All sorts of imported commodity and consumer goods flowed toward Iran, but the society was not ready to swallow all these consumer goods. People's incomes were limited and rural markets were inaccessible. At this point, it is appropriate to discuss the fin- ancial bourgeoisie which emerged with the support of foreign- capital. Those Iranians who did not invest in commercial or industrial activities, tended toward investment in the banking and financial sector. By such investment several banks were established within a few years, with either Iran- ian or joint Iranian-foreign capital. Such banks captured the housing market and eased capitalist relations among the people. In the following years, these dependent bourgeoisie spawned others such as an agricultural and a consumer 136 industrial bourgeoisie. With the support of foreign capit- alists, then, the dependent bourgeoisie became strong enough to control the political and economic organs of Iran without additional internal allies. Therefore, it was time to sweep up all its old allies in order to have suitable standing for future social and economic domination of the country and be able to open up new markets in nomadic, rural and poor urban areas. CONCLUSION The purpose of the world capitalist economy was not to improve the living conditions of the people in peripheral countries but, in the final analysis, to safeguard profit- able outlets. ‘This intention was visible in Iran from the emergence of capitalist relations under the leadership of the capitalist world system. Since this phase of capitalism is monopolistic in nature, it did not allow countries, such as Iran, to develop independently and become a competitor in the world capitalist system. The nature of the development of the world capitalist economy and its expansion toward the peripheral areas en- countered great contradictions. While it started to incor- porate a peripheral society into its system, its internal dynamics moved this country toward development and destroyed the obstacles which might prevent such development: At the same time, the world capitalist economy opposed to internal development since it presentedwaconstant threat to its expansion. 137 We can see this process in the economic development of Iran over the last two decades. The policy of the world capitalist economy in Iran, and in most peripheral countries, was designed to permit sufficient development in industry and other economic sectors to allow a market for dependent and foreign capital. This process of development maintains the world capitalist economic commodity market. Later this process in Iran, the period under consideration, will be analyzed to show how it preserves the feudal remnants in agriculture and develops a dependent agricultural bourgeoisie. The land reforms of 1962 in Iran were designed to guarantee and protect the interests of the landowners and the market for agricultural products of the world capitalist countries. Therefore, from the beginning of the sixties and after land reform, Iran, traditionally an agrarian country, began to import all sorts of agricultural products. The economic development policies of Iran over the last two decades were thus determined by foreign capitalists who, allied with the dependent bourgeoisie in Iran, controlled most sectors of the economy, including commerce, agriculture and communications. Through the various groups of dependent bourgeoisie, such as agricultural, financial, industrial, commercial and bureaucratic bourgeoisie, the country was opened to the penetration of foreign capital on a giant scale, 138 which replaced domestic capital by means of extortion, com- petition and the advanced technology. This process ended in the monopolizing of credit, banking, and financial oper- ations and the creation of a dependent bourgeoisie working in the interesés.of the world capitatlists economy through the exploitation of weak sectors of the domestic economy. This happened in Iran when the dependent bourgeoisie began to ally with the landholding class and with the merchants to preserve the landowning relation in agriculture, and it provided weapons and military training to the army, police, and other repressive forces. Cultural penetration was ach- ieved via control over the educational system and communica- tion media and, finally, by training the intellectuals. In coming Chapters the nature of the domination of the dependent bourgeoisie over the political and economic structures in Iran in the period under study will be exam- ined, as will the requirements and needs of the advanced stage of capitalism, financial capitalism. We will see how financial capitalist relations within the world capit- alist economy exert control over others through finance capital and directs investment toward worldwide exploitation. The dependent bourgeoisie in Iran were supported by this world power system and encouraged to keep the society in their hands. This Class were the agents and allies of the world capitalist economy and support the interests of that system within the country.10 PART III THE DOMINATION OF THE DEPENDENT BOURGEOISIE IN IRAN 1962-1978 The process of peripheral capitalist development in Iran over the preceding decades led Iran to a new social formation that would further economic development. This development was foreign-oriented and involved the sectors required for the world market; it caused some fundamental problems for the Iranians including expanding dependent bourgeoisie. In the third part of this study it is incum- bent upon the researcher to analyze and explain the develop- ment of this phenomenon over the two most recent decades. This analysis requires an understanding of the nature of the peripheral capitalist formation and its functions. Although the emergence of this phenomenon dates back to the semi-colonial period, it was during the Shah!s White Revolution that this class expanded and became dominant in Iran. The growth stemmed directly from the functions of world capitalism which required new relations between core and peripheral countries to centralize and concentrate cap- ital for investment. The disarticulation and peripheralization of Iran's social formation occurred at this juncture, when development 139 140 began to respond to external rather than internal require- ments. Although the indigenous and independent Iranian bourgeoisie had struggled for capital development, the advanced capitalist countries intervened to retard such development. The period under study witnessed the final stage of the incorporation of these local and independent bourgeois groups into the world capitalist economy and their final dissolution into dependence on the international market along with the state bureaucracy and other co-opted groups. The influence over the state, with its monarchy system, was so complete that the Iranians called their monarch the “American king". It is necessary to examine this emergent dependent bourgeoisie to determine why these groups were so completely co-opted by the world capitalist market, against the interests of the people of this periphery nation. Cer- tainly, the answer will be found in the nature of the Iranian social formation, On one hand, and in the nature of dynamic capitalism, on the other. It is the task of Chapters Six through Nine in Part Three of this research to examine this phenomenon. CHAPTER SIX THE SHAH'S WHITE REVOLUTION: ITS CAUSES AND CONSEQUENCES This Chapter begins with some reports from 0.8. Senators, and other sociologists, writers and politicians to give a picture of Iranian socioeconomic life before the 19605. Then, the political economy of Iran will be analyzed for the period that the White Revolution was in its planning stages. The core discussion of this chapter will show the reasons and re— sults of the events of the period. A U.S. Senator's report to the U.S. Congress on Iranian social conditions in 1958 reflects the critical situation of the Iranian socioeconomic situation. He reports that, "In Tabriz [Iran's second largest City] we encountered such poverty as we had seen nowhere else in the world up to then... I visited a carpet factory employing 800 workers, 600 of them children between the ages of 6 and 14..." (Nirumand, 1969: 152). The conditions of life before 1961 were also pictured in one of Iran's periodicals: 141 142 I have witnessed appalling scenes of human misery. I have seen children and young people, men and women, slowly wasting away for lack of medicines and food, because of hunger and deprivation. I know of families whose utmost desire is a bit of bread; I know of bashful girls and women who do not leave their homes for months at a time because they lack the barest essentials of clothing. I know of children skinny as skeletons, who roll around in dirt for years, naked as worms, and live on weeds and rotten fish... (Nirumand, 1969:151). Ali Amini, who was appointed Premier on May 7, 1961, to carry out the reform program discussed the Iranian socio- economic situation on radio: The biggest economic problem in Iran, which afflicts nearly the whole population is the low standard of living and the lack of vitally necessary goods. The excessively high prices of food, the rapid rise of the general cost of living index, and, finally, the inability of the responsible authorities to draw upon accurate and workable plan for lowering and stabilizing prices and for prevent— ing the threat of inflation are the primary and most important problems that have to be considered. (Nirumand, 1969:114). F. Halliday, an Irish sociologist, specializes in the Middle East and Iran, talks about the nature of the Iranian political system and says that, ...Iran is in several ways an outright military dictatorship, no independent political activity has been allowed by the government; many opponents are jailed, tortured and killed. (Halliday, 1979:64-65). 143 The socio-economic formation in Iran before the White Revolution included various modes of production. Although the dependent bourgeoisie and land owners were the main groups and allies of the dominant political sys- tem over the past decades, there were some fundamental con- tradictions while peripheral capitalism was becoming the dominant mode of production. The tendency over the last decades had been to dis- guise the trend of expansion of the world capitalist econ- omy toward the peripheral countries. This tendency alie- nated traditional modes of production and disarticulated the entire society to create a new market; The nature and Char- acteristics of the peripheral societies and their internal conditions had presented some major obstacles to such ex- pansion. For example, in Iran there were three major modes of prOduction with different social relationships and means of production (bourgeoisie, land-holding and nomadic). Al- though those had their own contradictions, they shared in a political system and had common interests in appro- priating and exprOpriating their surplus production. The capitalist countries, England and the U.S. by supporting these groups penetrated their social formations to extract 144 raw materials and oil and sell their industrial pro- ducts. By 1960 development of the new international order and economy and development of a dependent bourgeois production in Iran had created increasing contradiction between allied ruling grOups and their opponents. Thus, between working Class and bourgeoisie, peasants and landowners, nomads and their tribal leaders the society was in conflict. New policy was necessary to prevent an explosion in the determinant historical development process. The political system and world capitalist economy needed to look at established al- ternatives to create a new order in the society. We know from history that the dependent bourgeoisie was to determine the dominant mode of production and new production relations had to be established. Monarchic system had a choice, either to reform and isolate its tra- ditional allies, the landowners and tribal leaders, let the dependent bourgeoisie become the dominant system, or to give up and let other alternatives arise. Monarchic system hesitantly accepted the plan and carried out the so- called "reforms from above". The nature, causes and conse- quences of such reform are called by the people, "the Shah's White Revolution". In sociological analysis it is called "Modernization of the society from above". 145 However, the Iranian dualistic mode of production, land- owning and other means of dependent bourgeois production, had become the dominant Characteristic of society. It was the Shah's'White Revolution" that determined to divide the dual- istic situation in favor of the dependent bourgeoisie. The reason for this determination was that the dependent bour- geoisie wished to control all the economic and political or- gans of the society. Hence the expansion of the internal contradictions between two economic systems through divisions between the progressive groups, such as workers and intellectuals. Because of the growth of wage labor in cities there were also internal factors which necessitated such social change. Be- sides the internal conflict situation and external factors, the world capitalist economy needed a new market for financial and industrial investment in the area. Therefore, it was neces- sary to decrease the contradictions internally and externally. Internally, the dependent bourgeoisie existed within the dependent social formation with the support of the state machinery and the core countries, especially the United States, which wanted to share in an effectively functioning government. Dialectically, this was predictable because: (a) it was the only social class, which was economically and politically organized and had appropriate productive forces and sur- plus labor; (b) the landowning was declinging be- 11 cause of a growing peripheral capitalist relationship; (C) 146 growing progressive groups and social movements threatened the entire system; and (d) an organized working class was lacking because of the peripheral capitalist mode of produc- tion; monarchic domination; and a consequent lack of inde- pendent economic development. Although in this period landowning had been one of the dominant modes of production and the landowners were socially, politically, and economically powerful and shared in state decision-making they began to ebb when dependent bourgeois relations developed within the state apparatus. The inter- national situation between peripheral and core countries created a situation in which foreign supporters of the land- owners could nOt continue their support. Landowners were forced to concede their prominant status to leaders of new mode of production which had more flexibility in generating surplus through appropriating and expropriating the fruits of labor. Although the state machinery from the monarch down had common interests with the landowners, change was imposed by the internal and external forces already discussed. As a mode of production, landowning and its social relations dis- appeared from the Iranian society, only to emerge in a new form and share in dominant social relations in a new role and position, as dependent agricultural, industrial and financial bourgeoisie. 147 After the change in the dual modes of production, Iran established a new social formation built around the dependent bourgeoisie. It either disarticulated or destroyed and marginalized other modes of production and subordinated any independent eConomic activity. This process will be analyzed extensively in subsequent chapters but it is useful, first, to examine some causes and results of this development. The Shah's White Revolution which took action on the internal and external contradictions, carried out some re- forms from above and decreased the internal conflict situa- tion for a while and let foreign capital be invested in var- ious economic sectors. It affected all social and cultural relations and began to establish a new social relations and a new life style. Insofar as the nature of this development was dependent and foreign—oriented, it was in the interests of the core countries more than internal economic requirements for in- dependent development. Through this action, the new social formation with its developing mode of production maintained the political system untouched and organized itself as a single social formation. It created its own social and political groups to sustain the effective organs of society. It also created some major contradictions which appeared later. It is advisable to see why such a program with such Characteristics prepared Iran for the early 1960's. 148 The following tables illustrate the socioeconomic changes in Iran over recent decades. These figures explain how imports of foreign industrial products increased from 1900-1965, affected local and internal production and gradually eliminated domestic products. They help explain how the de- pendent bourgeoisie emerged, developed, and become a dominant social formation. The figures have been adapted from H. Bharier's work, The Capitalist. Table id shows the trends of decreasing domestic econ- omic production and increasing imported materials over the same period. Table 12 shows the percentage of traditional and modern goods produced in the Iranian economy over the sixty-five years, 1900-1965. Table 13 illustrates increasing amount of imported capital goods. The figures presented here show the socioeconomic trends of the Iranian economy; the growth of imported goods and mod- ern established industries, and the decrease in local products in favor of imports. This was a general Iranian economic tendency which was supported by the internal political struc- ture and the world capitalist economy. In the coming pages these trends will be analyzed to determine why they intensi- fied and came to dominate the entire socioeconomic and poli- tical system. 149 TABLE_£9: GROSS DOMESTIC FIXED CAPITAL FORMATION 1900-1965 (Million rials) Year Impprted Production Domestic Production 1900 ' 6.0 108.4 1905 ' 26.6 112.3 1910 33.7 116.4 1915 94.9 124.9 1920 83.3 125.1 1925 102.7 139.0 1930 428.2 143.5 1931 154.1 148.1 1935 462.0 219.0 1939 462.3 348.5 1940 318.6 391.4 1945 960.3 1714.8 1950 2603.9 1775.6 1955 11089.5 3341.2 1960 29061.8 ' 6252.0 1965 34921.1 11374.0 SOURCE: Adopted from H. Bharier, The Capitalist-...Tables 5-1, pp.126-127. 150 TABLE 10: COMPOSITION OF G.D.F.C.F. BY "TRADITIONAL" AND "MODERN" CAPITAL GOODS IN PERCENTAGE TERMS 1900-1965 YEAR TRADITIONAL MODERN 1900 I 98 2 1905 . 90 10 1910 88 12 1915 76 24 1920 74 26 1925 32 68 1930 55 45 1931 34 66 1935 56 44 1939 71 29 1940 80 20 1945 80 20 1950 31 69 1955 20 80 1960 13 87 1965 13 87 SOURCE: Ibid, Tables 5-4,p.132 151 TABLE 11: G.D.F.G.F. IN IMPORTED CAPITAL GOODS (In millions of 1965 rials) YEAR TOTAL 1900 A . 100.0 1905 . 443.0 1910 561.7 1915 1530.6 1920 1388.3 1925 1604.7 1930 6906.4 1931 2446.0 1935 5250.0 1939 3502.3 1940 2182.2 1945 1613.9 1950 4742.9 1955 13046.5 1960 31520.4 1965 34921.1 SOURCE: Ibid, Tables 6-3, p.171 152 Although the causes of the reforms of 1962 are dis- cussed throughout this study, it is advisable to outline them at this point. The socioeconomic events since the coup d' etat of 1953 produced the basis of a dependent bourgeoisie but, in the process, the landowning mode of production lost its socioeconomic position. The reasons had their own in- ternal and external logic: the world capitalist economy needed further development to expand toward peripheral coun- tries for financial and industrial investment and to solve the contradictions between and within economic groups and the political system. These internal and international involvements were resolved, mostly to benefit the development of world capit- alist economy, although Iran did obtain some economic and social development. Its economic and political bases, the means of production, technology, and industrial instruments were produced and imported from outside the society. The above general explanation needs to be analyzed in detail to provide an explanation of how the dependent bourgeoisie overcame rival modes of production and political power groups and became the dominant economic and political power in the society. The major internal societal and econ- omic factors paving the way for such development were inter- nally: a. The dependent bourgeoisie wanted to secure its own position by enforcing its economic basis as the dominant mode 153 of production. It needed to concentrate all economic and social power in its hand. b. The landowners, because of their nature of econ- omic production and their modes of surplus expropriation, could not retain their traditional power and had to give way ‘for more progressive groups. c. The dependent bourgeoisie, because of its develop- ment in various economic and political sectors, were ready to grasp the power sources and isolate all allied groups. d. Through their grasp on the power system, the de- pendent brougeoisie could make decisions which favored their own development. Thus, they could facilitate commercial, taxation and customs regulation in their own interests. e. Decreasing agricultural production caused by peasant dissatisfaction and their migration to cities was becoming a serious political issue. f. Conflict situations created between capital and wage labor in the factories were a threat to the political system which went beyond the capacity of the state to control them. g. The society needed new social formations to re- lease itself from the old economic and political relations which were barriers to development and progress. h. The uneasy situation was intensified by progressive and non-progressive groups striving to profit from the situation 154 and ride out the storm. They spread uneasiness throughout the society to legitamize new development, and new structures without alienating the old power system and preventing any unforseen disruptive events. Externally, the factors related to the reform process are three: a. The establishment of new radical governments in the neighborhood, i.e., the communist regime of Iraq in 1958; b. The requirements of the world capitalist economy for new markets and investments (President Kennedy's admin- istration was responsible for encouraging the Shah and his regime to accept the reform program). c. As neighbors with the Soviet Union, Iran obtained from the USSR an obligation of non-intervention in Iranian affairs through signing a consensus about their future re- lations. This gave an opportunity to the Iranian government to expand its energy on internal socioeconomic issues rather than expending it in propaganda to secure the regime against communist ideology. These factors encouraged the Shah's government to ac- cept reform to secure its own and foreign interests. Most of the social groups and classes welcomed these actions with- out assessing their purposes, means and results. They brought major changes in social relations, encouraging peripheral capitalist relations among social groups throughout the country. 155 Keddie states the process of the reform by emphasizing the role of the U.S.: When Muhammad Riza Shah returned to take over full power in 1953, backed by U.S. aid and support, he began to adopt policies similar in many ways to those of his father. Apparently believing that parliamentarism could endanger his power, he returned to controlled parties and parliaments, jailing of opponents considered dangerous, censor- ship, and, as a contemporary innovation, an increasingly efficient and omnipresent security police. At the same time he be- came convinced, with some prodding from U.S. advisers, of the need for certain reforms-- reforms that, as in the time of Riza Shah, were the logical outcome of prior social and economic developments, but which also needed intelligent planning to be implemen- ted effectively. From 1933 to 1962, plan- ning efforts were rather piecemeal, and an early period of economic growth was followed by crisis and retrenchment. Following a recrudescence of opposition in the early 19603 the Shah, with apparent U.S. encour- agement, launched a series of reforms in 1962-1963 that helped alter the social and class structure of the country... In class terms this resulted in a growing capitalist class with very varied social backgrounds from the most aristocratic of old govern- mental and landholding families to the lowest ranks of the bazaar classes (1978:319—321). Before going on to the consequences of the reform pro— gram of the Shah, we are going to document this process with some official U.S. statements to help us to understand the nature and Purposes of this reform, see its impact on social formation and consider the consequences of such a program. 156 In the United States' Congressional Record, the nature and characteristics of the Shah's White Revolution were viewed as follows: In an effort to broaden public support for his regime, the Shah initiated in 1961 a series of administrative, social, and economic reforms. These were formalized in a national referendum in January 1963 as the "White Revolution" or "Shah-People Revolution" and constituted a determined effort to stabilize and modernize the coun- try and to eliminate foreign influence in Iranian affairs. In seeking to eradicate the country's perennial political and economic problems, the Shah's rule shifted from what has been termed a "loose authori- tarianism" of the 1950's to a "royal dictator- ship" in the 1960's, with increasing re- liance upon the armed forces and other secur— ity services to suppress opposition elements standing in the way of the Shah's goals of modernization. The period since 1963, has become characterized by rapid economic growth and the expansion of the armed forces". (U.S. Congress, House, 15th Congress, 1st Session,’1977, p:116). The meaning of the "Shah's goals of modernization" will be analyzed in coming chapters but the composition of the Shah's "regime" and his ruling class were detailed in this official report: The ruling elite comprising the Shah, the royal family, high-ranking officers of the armed forces and senior civil servants, wields absolute power. The division of power between the members of the court and the armed forces is delicately balanced; in instances of a threat to the security of the state, the Shah has relied upon the continued loyalty of the armed forces to maintain order (Ibid, pp: 115-116). 157 The White Revolution brought Iran economic growth and modernization but not as the people wanted. It resulted in integration of the Iranian internal market with the world capitalist market, decreasing agricultural production, in- creasing the dependence of Iran on the core countries, in- creasing of the defense budget to secure the internal and the retional markets for capitalist exploitation, suppressing opposition in Iran and the region. A brief look at the U.S. official reports on expansion of the armed forces in Iran will give the reader an idea of the results of having such an enormous defense budget in a country where 60 percent of the population is illiterate. As a result of the Shah's interest in foreign policy objectives and the pro- curement of military hardware for his expanding armed forces, Iran's acquisition of defense materials have competed at an accelerated pace since the late 1960's with economic development plans for foreign exchange resources, skilled labor, construc- tion, and electric power. Military expendi— tures have run at high levels for the past seven years and have to some extent, absorbed funds originally earmarked for the develop- ment plans. The defense budget, in current dollars, has increased from about $1.2 billion dollars in 1970 to $9.5 billion in 1976. (Ibid, p:118). It should be added that it was not only the "Shah's interest in foreign objectives" to be the gendarme of the region, but also the requirements of the core countries. 158 Because of its defense and foreign-oriented policy, the Shah's regime increased its defense budget in order to maintain na- tional and regional security through the use of the dollars received from selling oil, natural gas and other resources. The following Table shows the nature of the Shah's moderniza- tion and economic growth. TABLE 12 IRANIAN DEFENSE BUDGET 1970—1976 (In millions of U.S. Dollars) 1970 1971 1972 1973 1974 1975 1976 Defense Budget 1,160 1,620 1,704 2,611 5,970 8,000 9,508 Percentage of GNP 8.2 4.6 10.6 9.6 13.6 14.9 14.2 SOURCE: 0.8. Report of Staff Survey Mission to Emhiopia, Iran and the Arabian Peninsula, 1976, p. 119. Table 15 compares the defense expenditures of the Iran— ian government with other Middle East Countries. The results of such a policy paved the way for critical inflation in Iran which had crucial effects on socioeconomic conditions of life. Table 16 shows the situation in Iran. 159 TABLE 13: DEFENSE EXPENDITURES IN MIDDLE EAST, 1974 Defense Expenditure Per Capita Percent Country (billions of dollars) (dollars) of GNP Algeria 0.404 25 3.3 Bahrain 0.008 35 2.2 'Bgypt 3.117 85 35.8 Iraq 0.803 76 7.0 Jordan 0.142 54 10.9 Kuwait 0.162 154 1.5 Lebanon 0.113 42 4.3 Libya 0.402 178 3.5 Morocco 0.190 11 3.0 Oman 0.169 228 15.4 Qatar 0.023 130 1.1 Saudi Arabia 1.808 228 5.7 Sudan 0.118 7 5.9 Syria 0.460 65 16.4 Tunisia 0.043 8 1.5 UAE 0.140 821 2.8 North Yemen 0.058 9 3.6 South Yemen 0.029 18 4.8 Total 18 Arab States 8.209 60 7.1 Israel 3.688 1,131 42.4 Iran 5.328 165 13.3 United States 85.500 400 6.2 SOURCE: F. 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"mmaoz N.amma m.om~q n.m@m v.mmm m.~vh m.n~m c.5vm o.oqo ~.mmo ~.vvm 44909 .n.aq. .o.-. .o.mav .m.h~. .~.m~. .~.c~. .m.a~. .m.m~v .o.m~. .~.cmv v.om4 o.om~ o.vv« N.hmq m.~p~ o.v- m.a«~ m.om~ o.om~ o.vw~ acooo noesmcoo «.mm o.>~ n.mn a.mm a.~v h.n~ m.n~ o.m~ m.m~ o.o~ ousuqsownoc o.no~ m.~h m.mo «.mm n.5v h.m~ o.o~ v.m~ «.mo ~.mn noua>uom ~.am~ ~.an q.om~ H.~n~ a.~h °.vm o.~m o.vn H.vm ~.oo mucus a noauunDOCH .H.h~. .h.h~. .A.h~. .m.v~. .a.a~. .m.o~. .o.am. .d.d~. .m.v~. .o.o~. n.whm m.m~n h.ow~ c.m- v.~on v.voa m.v~« m.m~a A.ho~ ~.~«A ncooo Amuwamo h.m~ c.v~ n.h N.m o.o m.m c.m h.v v.~ m.~ ocwoooun xoOum |O>HJ a ousuqsowuoc 4.~m m.om m.~n s.om s.v~ ~.- m.n~ «.mm o.a~ «.mw noua>uom o.sva o.o- >.vh «.mm 0.9m m.vm o.mv m.mm v.ov «.mN :Oauusuuacou h.~vo m.mvm m.vvv H.ouv a.n~m m.-~ m.vn~ o.oo~ m.~w~ n.nH~ nos“: 0 OOHMDDDOCH Ah.aov .h.mm. .a.smv .h.>m. .o.mm. .m.mm. .~.nm. .v.mm. .~.~v. .N.mv. m.mmo c.-h N.wmm ~.aam c.aov ~.mm~ ~.n~m m.m~m a.v~m m.hc~ mcooo OumwcmsuODCH mama pond coma moan wood ncma Nomw Home ooau «mad .aundqoc «6 messages. oe-mmm~ .moooo amazemxn so ZOHBH mos—IOU "ON fiance 197 hm.m .mmfluumscCH Hfio smacmuH mo DCOEQOHO>OQ uflxmumnmmm.m EOHM OOHQOU< "mumDOm Hmuou mo ucooumm mmumOHcca A v "@902 s.maee 3.5msm 4.osm~ m.oeo~ 4.4544 s.~4ma asses l4.mac Am.4sc Am.~H. 1s.ssc Am.mac 1m.osc 4.4Hos 4.smm e.amm p.34m H.ss~ ~.mma mcooo smssmsoo m.mm s.~s m.~e s.mm 4.4m 4.04 osssasossme 4.444 o.sm~ 4.44s s.~m4 ~.Hm m.om mmosssmm 4.oss m.oem m.HH4 4.43m s.me~ «.msm amass s mmsssmsesH ls.o~c A~.4~c 1e.m~. 14.m~. 1m.mmv As.m~. m.omma o.eom G.N4e m.mm4 o.Hmm ~.smm mnooo Hmusamo o.-4 e.s4 s.m~ H.m~ o.m~ 4.~m ossommun soosm IO>HH w musuasoauo< H.444 m.es 4.sm m.sm s.~m 4.4m mmusssmm m.msm m.sm~ m.4o~ m.mma m.m4s s.~m4 sossusssmsoo m.4~mm o.~sma m.ms~a m.oHH4 o.m4m 4.sms sense 4 messsmsosH 1m.4es Am.eec 1H.Nec 14.441 As.mec .e.4ec 4.44m4 s.ms- ~.emms m.emms m.mooa m.smm meooo mumsemsumusH 4sms mesa Nsms Hess cess moms Amsmsaoe «6 msosaassc 4>\mea4 .moooo omsmOEZH so onsHmomzoo "HN mdm<8 198 that the regime began to sell state-owned industries to former landowners and the wealthier families to initiate capitalist relationships. Although it was announced that anyone would buy the state-owned industries or part of one, it was the wealthier familes who did so, furthering the development of bourgeois domination of the society, a process speeded through oil prices increases in the 19703. Saikal explains how land redistribution and industrialization were accomplished jointly through the reforms of 1962: The land was thus balanced, to a consider— able extent, by the public sale of state- owned factories to private shares. This reform was intended to achieve two inter- related objectives: to enrich the govern- ment with an additional source of revenue, so that it could finance the land reform effectively, and to provide the former land— lords with a necessary stimulus to reinvest in industry the money they had been compen— sated for their lands. In this latter ob- jective, the government sought to buy off the former landlords, and yet increase the share of private investment under its own guidance in developing the industrial sector. Many former landlords, however, soon managed to become industrial lords...(l980 :110-111). The functions of the dependent bourgeoisie in this period were to distribute the oil revenue, encourage consump- tion, increase consumer industrial production, and raw mater- ial export and to build up new subsidiary and consumer pro- duction. The state machinery led by the Shah and his cour- tiers was the apparatus which controlled this foreign-oriented plan and thus moved the dependent bourgeoisie towards its 199 dominant position in Iran. As the machine of control run by the Shah, his secret police and the army, these top of- ficials controlled the peripheral development of that coun- try. As the dependent bourgeoisie expanded its control over the society through its use of extensive oil revenues in the seventies and the support of the core countries, its domin- ation was not only economic but also social, cultural and political. As such its members made policy and set standards led trends and established fashion; in so doing they encour- aged their countrymen and women toward a Western lifestyle of conspicuous consumption. Parasitically, the people of Iran were demanding a Western style of life without having an appropriate economic base to justify this existence. In the late seventies the political system achieved full peripheral capitalism; the country was entirely depend- ent on foreign technology and direction. While it was Claimed that Iran would be an advanced capitalist country before the end of the century, analysis makes it clear this could only come about through continued dependence on foreign capital- ist countries and multinational corporations. It would re- quire an increasingly powerful dependent bourgeoisie to dominate all socioeconomic activity; extract more surplus value and production to escalate its flow out of the country 200 an even larger market for consumer goods, massive imports ($12 billion in 1974) and even more investment. Most of the investment which was planned by foreign companies and their internal allies, consisted of spending for consumption. By 1974 the amount of this investment had reached $42.2 billion, which included COmmunications, telecommuniCations, housing, (public buildings, capital and consumer industries. In the final chapter of this section the dependent bourgeoisie will be examined in five broad subsections to see how these sec- tors, some involved with consumption, others with investments, still others with the extraction of surplus value made up a cogent whole and interrelated with each other and the larger 16 society. CHAPTER 9 THE STRUCTURE OF THE DEPENDENT BOURGEOISIE AND ITS FUNCTIONS WITHIN THE PERIPHERAL SOCIOECONOMIC FORMATION The peripheral capitalist social formation with its characteristic mode: of production has emerged and developed over the past two decades to dominate other mode of pro— duction in Iran. Consequently the dependent bourgeoisie became the dominant social and economic Class and subordin— ated other classes; with the leadership of the Shah and his royal Circle they led socioeconomic planning toward further peripherization and militarization of Iranian society. Over the past two decades peripheral capitalism was expanded into most sectors of the Iranian economy and under- mined their internal processes to turn them toward peripheral development. The dependent bourgeoisie have then guided this development in the various economic sectors, enabling the ruling class and the state administration to direct overall socioeconomic decision-making and political policy making. The intent in this chapter, then, is to analyze the structure and development of the dependent bourgeoisie in terms of their sectors of economic activity, in other words, their functions. Although the composition of this class remains 201 202 the groups mentioned in previous chapters, the nature and characteristics of their activities divide them into spec- ialized economic sectors. Thus the political economy of Iranian society divided the dependent bourgeois Class into: commercial, industrial, bureaucratic, financial and agri- cultural dependent bourgeoisie. This division will provide guidance in this analysis. The structure of the dependent bourgeoisie which em- erged and developed over the last eighty years, evolved within a new dominant social formation by expanding its activity, not only in commercial areas, but in other sec- tors of the society such as industrial, agricultural, bureau- cratic and financial. Although these dimensions of the de- pendent bourgeoisie have existed since its emergence in society, they assume new importance when the dependent bour- geoisie system becomes a dominant mode of production within a new social formation. Then, its branches began to pene- trate specific sectors of the system and involve themselves as dominant participants in these areas. Therefore, it is necessary to analyze the structure of this phenomenon to see how its activities within the society and extracted surplus production to be Channeled outside the country. A specific characteristic of this com- plicated phenomenonis the direct relations and interests 203 of the state machinery directed by the monarch and his court; the dependent bourgeois class and the world capit- alist economy, the three allies that determined the trends of development in Iran over the last two decades. The var- ious divisions of the dependent bourgeoisie and their func- tions within the total system were: a. Commercial dependent bourgeoisie b. Industrial dependent bourgeoisie c. Bureaucratic dependent bourgeoisie d. Financial dependent bourgeoisie; and e. Agricultural dependent bourgeoisie. The Commercial Dependent Bourgeoisie The colonialist period in Iran began with commer- cial activities. Although the two rival colonialist coun- tries, England and Russia, pursued different goals, they had common interests in wanting to dominate Iran for their own commercial purposes. Their competition in this field has its own history outsidetfimescope of this study, but the consequen- ces of this competition resulted in their involvement in Iran during its semi-colonial, neocolonial and pre-capitalist periods. Commercial activities in semi- and neo—colonial Iran were the main goals of the rival colonialist countries and 204 the focus of pre-capitalist social relations that ended in the emergence of a dependent commercial bourgeoisie. The formation of a dependent commercial bourgeoisie in the early nineteenth century was the basis for a depend— ent capitalist formation founded in Iran. Commercial acti- vity was also the origin of other division of the dependent bourgeoisie. Through history, commercial emphasis has been on im- port and export activities. The growth of the industrial and financial investment sectors caused a decline in the external function of commercial activity. But this sector, through participation in export and import, industrial sub- sidiaries and functioning as distributors of industrial pro- ducts, saved its position. In functioning as distributors of industrial products the commercial dependent bourgeoisie extended its activities into transportation, education, chain stores and even re- tail activities which caused some conflicts with traditional merchants and retailers. Historically, commercial and trade activity has its roots in Iran's long distance trade before the colonial per- iod. In the semi-colonial period merchants, traders and money dealers tried to modernize their activities, but col- onial policy and state procedures did not allow the necessary flexibility. 205 Since the penetration of colonial capitalism the com- mercial bourgeoisie was divided into two groups: traditional merchants in the Bazaar communities, and a newly emerging dependent commercial bourgeoisie, who were the allies of foreign traders and supported by the state machinery and ruling Cla3s. The former were independent and locally- oriented. An alliance of religious leaders, and local traders and retailers participated in national and religious movements against the state and world capitalist penetration. As traditional commerce and trade activity had declined over recent decades and the new commercial dependent bourgeoisie was growing and developing, there was conflict between the two which was exacerbated by the fact that the former sided with religious and national movements against the regime, and the latter supported the government and Western-oriented activities. In the post war period the dependent commercial bour— geoisie had a chance to extend and exploit a chaotic situa- tion. The socioeconomic crises of this period provided a good opportunity for this group to demonstrate its potential future role. The situation was reversed in the Mossadeg period when the government supported internally generated commerce. The dependent commercial bourgeoisie joined other opposition groups in anti-government activity. The overthrow of the Mossadeg 206 government brought another supportive regime to power and enhanced dependent commercial activity. The dependent bour— geoisie co-opted the landowning and ruling classes, paving the way, politically, for massive importation under an open door policy. Thus the dependent commercial bourgeoisie accelerated their activity in the 1953-1961 period; the total value of imports increased from $168 million to $692 million (Ashraf, 1971:265). They participated in wholesale trade with the world capitalist economy and discovered new areas of pro- fits by investing in the banking system, industrial sector, and construction activities. The following table shows the growth of Iranian imports from 1964 to 1973. It should be nOted that, without exception, imports increased in every category and most showed an increase every year in the de- cade. The areas of intermediate agricultural products and capital agriculture expenditures are especially indicative of the overall decrease in farming in a formerly agrarian society. The import of industrial goods blocked the develop- ment of indegenous independent bourgeoisie in Iran in the early nineteenth century. The open-door policy led to the production of most consumer goods by large Iranian capital- ist and foreign investors, through the establishment of light industries. Trade between Iran and foreign core countries 207 .mma.o .ssumscsm aao smasaua osu «0 usOEOansoo .axmussnom .L "moesom ’ a.~mnm 4.oho~ m.ooo~ o.onoa s.~4ma ~.moma m.cmaa >.mom v.ooo m.~4n m.mam acaoe 4.nom o.amm n.av~ a.na~ ~.ooa v.oma o.oma o.44a ~.hma m.aha o.4~a mcooo Dossmcoo >.~n m.~o o.mm a.om a.cv v.mm o.p~ h.om a.mm m.av h.m~ ou:.a30auo< o.m5~ v.ooa h.~ma ~.am m.cn o.moa o.a~ m.mo o.mn n.hv h.o~ nova>uom m.oom m.aav o.oam n.mo~ ~.oam a.mm~ ~.om~ a.coa a.~ma o.~h o.vm mocax o nOaHDDDCCa c.ocm o.~vo m.~ov c.amm ~.nom m.ohm m.m~n h.oo~ o.m- v.~oa «.coa nooom amuaomu o.pv n.o~ a.m~ o.o~ v.~m s.ma o.va n.s ~.o o.o m.o mcacooun xOOumo>aa a ousuasoaum< m.o> v.5m o.nm n.~o o.vo a.~m m.om m.am n.¢m h.v~ a.- nooa>uom o.hm~ m.vo~ m.oma o.mva .m.~oa o.w4a o.o~a p.45 ~.mo o.om o.vm COAuosuumcoo o.~ama o.mo~a m.oaaa o.ovo v.nmn n.avo m.ovm o.vvv a.oav m.sam m.a- mesa: o moauunscca h.mn- ~.omma n.omna o.oooa n.5om o.ooo o.aan_ ~.omo ~.oam o.oov a.oo~ mcoom OuaacOEHOOCH msma Nnma ahma onma moma ooma soma ooma moma coma .moma .3386 6.: no 2.0235 mna4oma .9585 miss: no 203.3328 5.39.0 WNN mam: 208 peaked in the areas of industry, technology and spare parts, organized and supported by the dependent bourgeoisie. Nick- bin describes this situation: Insofar as imperialism is concerned the results (of trade) have been very successful. Iranian imports have risen from 49,000 million rials in 1959 to the astonlshlngj figure of 795,000 million rials, 90 percent of which has come from the few advanced capitalist countries--and this does not include military imports. Over 75 percent of the imports in the last five years were goods used in productive consumption, consisting of 45 percent capital goods and replacement parts and 30 percent raw materials and intermediate goods used in the new industries. (1978:11). The following table shows how the commercial dependent bour- geoisie imported materials which had been produced in Iran before the penetration of capitalist relations (See Table 25). It should be noted that a considerable proportion of the increased imports are intermediate goods for final manu- facture in Iran's light industries. For this reason the commercial bourgeoisie, through import and export, gave rise to the industrial sector of the dependent bourgeoisie. Industrial Dependent Bourgeoisie The overall position of the industrial bourgeoisie before the period under study is crucial. This stratum, in 209 aomoa 4~ma swam oam ommN mam omsamaomm new 0a» :Dsucmm .amusumzuumonsm mm 4mm 4mm ems ems 4oa m memm mo ammz so usoam a maosums aao mussaao .mommmaao mm m4mo~ omm4~ m4mm oaom omom maow msosoosm OUOOQOB o ooomnoa Na mao4 mm 4~ma mm om4 m mmmmumsmm aa mmmmm M4mm ommm moma mmam mmma soaumusm -mum Doom .omaz mo mo4m amm momm momm mm4~ smm massage Loo mason msaommm mo m4mm mam mmma 44a smm as mooamm o mos .mouou .oommou no ommm mm4~ sos4 44aa ems am mono: a soaumumm loam ummsm .Hmosm oo mmmaa m~4a coo sm 4mm moa meanmumm0> a «Danae mo 4mmmmm mmmmam omoom aaomm momom ammmm soasmsmmmsm amouou o mammumo vo omm oa Nma o om 4a coaamamo Imam swam o swam mo mam4m amm mmama mam omO4 mmm moms 4 muosuoum seams mo Nmamm 4saa mmmm oma can as soaumsmm Imam umoz o 9mm: ao amaoa G444 meow Nam mao oma massage msas oo .o.o.m.o .m.s .o.o.m.o .m.s .o.o.m.o .m.: mess 4 usam mama mmma amma 2¢mH OB WMHmBZDOU Bzmzmoqm>ma 024 ZOHacmmmOOU UHZOZOUM mom ZOHB¢NHZa mm Noamoa aamom mamm4 mO4m mmamm moom messomeoo m musmsmam amanmso am ammm Nmm mmma am amoa mm maao m mums Cmumcomoacmz Cam omxmz .moaom auamm m4 aamam a44aa mmomm m~4aa 4oma~ maamm aomumsmm IOHC>£ICOCV mumm m maao 0a3mu0m0> m4 Naam 4-m m4oa aO4m mmam m4am mums m maao amgace a4 ammma 4m4m mmma omam mmmm ~4ma mausooum ssma Ioaumm o Edmaoaumm mm moom aomm ama4 a4a moma m4m mamasmumz maomuomm> m amsasm mm am4m amm mmm ma ma mm omsom amumz m mono msoaummaamumz om mammm mmomm Nmam ommm maom ~a4a mamaocaz mosuo m mumuaaausmm 06:00 am 4oa-a 4mm 4mom4 mmma amNNN mma xaam 3mm .mummz names 4 mumnam maauxms mm mmma amom mm4a m44 mmma mooa seams mums: m mmasm mm 4mmm mm4a mama 4ma ooaa om xuoo m amass; .oooz 4N .o.o.m.o .m.s .o.o.m.o .m.s .o.o.m.o .m.o mmas 4 osam mama mama .szoo "mm mamms 211 amomoa avmm mvmov omma mNNma ooom madam: mzoaammcoz mo mommm4a mm~m4~ ommmmm mmmma mmmm4a ammo aamam m soaa am a4mooa mmm4 mmmmm maaa ommoa 4mma .o.m.z .mumusuommssmz amumcaz Oaaamumscoz mm m4mm4m 4mm~a mmmoma maaa chmm amom nauseous omumaom .moauauum QDIOsz .moaunmm .cum» .maauxms mm oemaa 4mmaa avvmm 4am4 mmama oovm womaona mamasuommscmz o cumonumamm .umamm 4o am4am omm oomm ama moam mm mamasuomm Idem: xuou o coo: mo maooaa vvaoa mamov aoom avoaa aaoa Conmacam o conmacamaemm mamasuomwsomz uonnsm No ammm amv ooma aoa amo 4m mcaxmasm Commoua o uneduommscmz umcumms .Dmsamms am mmmooa Naomm Nmamm mmmm 4maoa oomm .U.m.z .mamaaoumz o muuscoam amoaeoco mm Nomoma moaaa aoaoo ammma ammma moma mamaaoumz Oaummam o OmOaSaaOO cmumamcmmom .mcammm Oaumsusam mm mvoma ommm am4o Nmmm ommm a4~ . acoauassccm usages: .ausac muoscoam oaCCOOu uoumm o mosamOaaxm am .Q.U.m.0 .m.D .D.U.m.0 .m.D .Q.U.m.0 .m.D mm>8 # UBHm mhma mnma ahma 9200 "mm mdoes 212 moooNN momma mammm mmoa oamma maam mamcanumz mcaaccmm amoacmcooz m. mmoooa mvaav amomm Noaaa aoomm 44mm some Imasom OcauOuaam muommoaaeou .mmesm N. amamom Nmaao ommam ammwa aommm ooaoa Ocaaoou o mcaumom a. mmocmaammc o mawcanumz mam oaamma mmcoa omoam ovma mvoma mmm .Ouo .ocauaom .mcacmsau amamcaz m. movoom oammma mmmma aamov mmmoa 4o4oa moacaz o coauusuumcou 4. mamam aamm m~m4 mma omaaa moa scammmoosmnnoom m. mmama aaem Nmaa mmm m4a~ mm meansan Ixoom o mcaucaam N. omama 404a omoaa 4N4 oama mam aaaeaasm o momma a. muocacomz mmasamsoca amaummm maa Navmom 4oa4 mommo om04 ovoom ooa4 muocanomz amnumoq w oaauxme aaa aammoa ammam ammmm mmm4 mmmmm amma aumcasomz mcaxuozamumx maa mmmNo ovoam avvam moan mono omma muumm o mocanum: moamwo 4aa aoooaa maaoo aoomv ovaaa aomm ommm muoca nsomz amusuasuauom Naa mmovmm aoooo moweaa ammom oommv. om44m mumcanomz mcaumuocmo H0300 UaHuUOamncoz aaa mmmvom mammv m4moo omoma mooav mmmo .O.m.z .muousuommssmz amuoz mo .Q.U.m.o .m.: .o.u.m.o .m.D .Q.O.m.o .m.o wows # 09am MWma mama aama )l' l)‘ Bzooumm mqm<9 213 aaocanomz oauuowam ovmmo mooom 4ooaa memo mmoom ammv mma mooaa oamv mmmv amoa ommm oaoa msum Iammda amoaooaoacmm o amoacosnoauumam oma vomoa ovoaa Na4aa moaa ammo mom ucoeaasom Caocomsoz amoacmsooenouuomam o Oasaozunouuooam mma ommovm moaom mmomoa 4o44a ammmo oo04a msDMHMQd< mcoaumoacsseoomaoa 4Na ammaaa mmaO4 4oaom 4am~ ammaa oam Dawemasmm soau Isnauunao Oaauomam mma Novmmm Novom mmmma mooma momov 4oam Hmomnouasm o aaoca unom: Hmzom Oauuooam mma aommaa mooma mamov mmaa mmoma M4m4 .Oum .moxom Unavasoz auccsom amumz m. aavaaa mammm ammm4 Nmoo omoom oemm moocm -aamme amoasmsomz m. momma amam mma4 aoma mamm ~m4 mosasmmm a. momom aao4 Naama coma aamo Nmma .uuo .mcacco> .mcaCanz .msaom sxumm .mcaauuom .acaumvcmamu o. oooov mvmv Nvoma oao movm amm maooa umsom m. mmam mom ovva am omo mam aooaoscocv moocm : . uaadd< Oaummsoo 4. mmocmaaaac o mumcanomz maa .Q.O.m.o .m.: .Q.O.m.o .m.: .Q.U.m.o .m.D mama # 09am mama mama Mama 9200 "mm mama? 214 .moauaCSDHOQQO mmocamsm .m.D mo ao>asm a .man4a .m .aama “smua momDOm mmomoa mommm momvm 4aNm ovmma amma moaoauac UOHDHUMMDCMZ . UwHZ mm momvoa ovvma mmamm 4oma amomm vomm mxooao .mmnoumz msumummac aouucoo o ocausmmoz .amoaumo . .amoaomz .Oamausoaom mm mmaoa «oaa momm ama aoam oma moaaommmouc o Ocanuoao 4m mmmma mmoa maam omm a-4 amN ousuacasm mm mO4~m mmmm mmmma mma ma4m moa messuxam mcausOas m ocanESam .aumwasmm am ommooa ammm mmmo4 mmm m4o~ mma mumom o moanm mma mmmmmm mmoaom 4oomoa amamo aaa4m aom4m Homaouaa 4ma omooma amoma momo maoa mvmm Nooa moauazm> Houoz Hosuo mma mammama ommao4 mmommm mm4m4 aaomm mmoam moaoano> nouoz Omom Nma m4-o mam4a oo4oa ooma moama ooo4a moauaco> amsaamm ama .Q.U.mwo .m.: .Q.O.m.o .w.D .Q.U.m.o .m.D mm>9 # UBHm mama mama aama azoo 4mm momma 215 the pre-capitalist period, was not able to expand. Crafts were also one of the major revenue sources for state and local governors and were controlled by them, rather than by the craftsmen. In the semi-colonial period several attempts were made by this stratum, to expand their operations and influ- ence but this did not fit the purposes of colonial capital- ist policy and they failed in favor of imported industrial materials. The industrial bourgeoisie in the state capitalist period encountered serious obstacles, because industrializa- tion efforts were focused on state-owned industries. This policy impeded the development of independent industrial bourgeoisie. In the post World War II period the industrial bourgeoisie had no opportunity to enhance its development in Iran because of the socioeconomic crisis in Iran and the world. The period between 1941-1951 was allocated to the un- finished infrastructure which was begun under state Capital— ism in the Reza Shah period such as, expansion of roads and improvement of networks of communication. Most of these plans were U.S. military and economic interests and were utilized in the coming decade for strategic purposes. 216 It was in the 1951-1961 period that the private in— dustrial bourgeoisie had a Chance to grow rapidly. For ex- ample, industrial investment in 1956 increased from $60 million per year to an estimated $120 million (Ashraf, 1971:255). One of the major characteristics of the development .of the dependent bourgeoisie has been development and expan- sion of industrial sectors since the reforms of 1962. This was based, primarily, on foreign capital which was invested directly or indirectly in industrial sectors and especially in two major fields: mining and consumer industrial pro- duction. The role of state capital investment in mining in- dustries was significant. Private capital investment in in- dustrial sectors went, primarily, to consumer goods and trans- port. A major point in state investments in mining and steel was its intention to transfer this to the private sector. Industrial development in recent years, and its ex- pansion throughout Iran has been dependent on foreign capital, technology and foreign spare parts. A review of the nature of the capital investment, the kinds of industries which have been established, and the control of these industries will show how this part of the dependent bourgeoisie functions and is dependent on foreign-oriented policy. The greatest part of capital investment in this field comes, directly and indirectly, from foreign capitalists. Various banks, which function with foreign capital, are the sources from which these industries, at high rates of interest, 217 obtain credit to invest in the industrial section. Conse— quently, most of the surplus flows out of the country, as interest payments, through these banks. The dependent industrial bourgeoisie needed to buy foreign industries to establish in the country. This did not extend to investing in all the component parts of one or a few basic discrete industries. Instead they tended to buy various kinds of processes and needed to keep on impor- ting new machinery and spare parts spending large portions of the country's currency to import such materials. This meant the country could not achieve industrial independence. It is difficult to know whether core countries deliberately fostered this dependence or whether the industrial bourgeois- ie chose to buy the least expensive light industry processes-- rather than the heavy components of basic industries that are more expensive. By development of consuming industries, and the ex- pansion of their production throughout the country, consumer and distribution groups appeared to distribute these consum- er commodities and continue the development of their manu- facture. The following table shows one area of Iranian con- sumer industrial production, TV and radio manufacturing for 1976. The point to note is that while Iran had the capacity to produce 497,000 tv sets that year, 200,000 picture tubes, a vital component of each set, would be produced locally, 218 TABLE 24: TV AND RADIO MANUFACTURERS IN IRAN IN 1976 PRODUCTION CAPACITY NAME OF COMPANY (Units) TV Manufacturers Pars Electric Co. 170,000 Azmayesh Mfg. Co. 60,000 Bermo Electronic Ind. Co. 2,000 Iran Radio & TV Co. 40,000 Kashani-Akharan & Partners Mfg. Co. 10,000 Kogfard Electronic Ind. CO., 41,000 Mahboubi-Radjollah Co. 3,000 Mofid Mfg. Co. ' 60,000 Radio-Electric Iran Co. 60,000 Radio-Sharar Co. 45,000 Radio Manufacturers Mahboubi-Bodiollah Co. ‘3,000 Iran National Co. 10,000 Pictures Tubes for TV Transpic Company 200,000 SOURCE: Iran: A Survey of U.S. Business Opportunities, 1977 p.63. 219 leaving Iran's t.v. industry dependent on foreign manufactur- ers for the majority of these vital components. Halliday mentions the characteristics and structure of the Iranian industries which has been developed in the last two decades: . . .The state has invested directly in industry...The state has provided the funds for the private sector develop... The second agent of industrialization is the Iranian bourgeoisie. Historically there was no strong bourgeoisie committed to industrialization in Iran; private capitalist activity was based on trade and centered in the bazaar. The third final, agent in the industrialization, drive has been foreign capital. (149-151). Bill states how former landowners, after the reforms of the 19603, moved to invest in industrial sectors: ...The recent acceleration of the land reform program has estranged certain landlords from much of their land and there is good reason to believe that they might very well move from the landed to the industrial aristocracy. (1963:403). The reason why the industrial dependent bourgeoisie developed in Iran and alienated indigenous and local products was a lack of ability to produce their means of production in the history of the Iranian economy. This was the major factor which made this section dependent on foreign technology. Iran could not produce its means of production and produce its means of subsistence, independently. The consequences 220 paved the road for foreign-oriented and foreign-imported in- dustry, on the one hand, and the backwardness of internal crafts, traditional and modern factories. The climax of this period, in which foreign industries and technology were introduced into the Iranian economy to establish new style industries for consumer production, lux- ury and second hand productions; was the Shah's reforms of 1962. In this period, because of the internal security for capital and technological investments and the international situation, Iran industrial sectors started to extend through- out the larger cities. Iranian industrialization was known as an example which destroyed all societal obstacles for development. But this was only one point of view. Another view presents the other side of the coin, showing the dis- articulation, unequal exchange and inequality between Iranian social groups. To sum it all up, although the Iranian economic pro- file shows that the development and extension of industry throughout the country made possible economic growth and income increases among the economic groups, it was certainly peripheral development. The cOnsequences of such industrial development was the emergence of a dependent industrial bour- geoisie. This stratum became fully developed over the last two decades, and ecame one of the instruments of the state machinery. 221 The main features of the industrial sector of the Iranian society which resulted in the emergence of a de- pendent industrial bourgeoisie were: foreign—oriented and foreign-dependent; unequal development, disarticula- tion of the various economic sectors; and social and eeconomic inequality. Foreign-oriented and foreign-dependent industries, which characterize Iran's industrial and technological imports, mean a superficial development of the new indus- try onto the old traditional sectors. This process resulted in the emergence of the other aspects of peripheral develop— ment. Through the import of modern industry and technology traditional handicraft techniques were retarded, and sub- jugated the former one. The combination of Iran's industrial growth with these two kinds of industrial sectors were the major problems of economic development. The disarticulation of the socioeconomic formation and the struggle between the agents of these sectors were revealed through the recent movements in Iran. The agents of foreign-oriented and foreign- dependent industry were the dependent industrial bourgeoisie and the agents of the traditional, local crafts and indus— tries were the independent and traditional craftsmen and in- dustrialists. The independent and traditional factories and indus- tries could resist against the modern industries because of 222 the import of advanced technology and means of production and the support of the internal state machinery and the mediation of the world capitalist economy. What was the purpose of world capitalist imports to the new industrial sectors of Iran, which were established throughout the populated areas? The major purpose was the export of surplus capital and the growth of technology and investment in periphery areas. Through this, the world cap- italist economy exported it internal contradictions toward the rich and peripheral areas, such as Iran. The capital and technology were located in the areas in which labor and raw materials were already prepared, and the market for such production had been secured. Iran paved the road for such a process by preparing her internal conditions, getting the support of the world capitalist countries and increasing oil revenues. The landowners through releasing their capital from lands; the courtiers through investing their expropria- ted capital; the dependent commercial capitalists through plundering; and, finally, the foreign capitalists with their technology and the support of their states invested their capital“ in this profitable sector. They all created the new industries in Iran and established the dependent indus- trial stratum within the dependent bourgeoisie. 223 Although a recent attempt at reform was to open the rural and backward areas to capital relations and consump- tion through extending the new industry and technology to these parts of the country, the consequent process blocked this policy because of unequal industrial development from ' the standpoint of technology and geography. It is in the nature of peripheral development to result in such develop- ment. In fact, this is one of the core discussions of the dependency/world system perspective, the peripherization of the social functions of host countries through technological and capital imports. These imports are not requirements of the periphery but requirements for the world capitalist econ- omy. It is, through this process, that economic development and especially industrial development of the periphery re- sult in the disarticulation of the host country and growth of the dependent bourgeoisie. Iran's economic development is a good example of this process. The traditional craftsmen and factories survived, in remote areas of the villages and towns even though imported technology and industry was installed in the big cities and around the capital. Thus there was progress of one part and retarding of the other part of the sector. The result of this kind of industrial development limits the growth of internal markets and the generation of 224 internal dynamic development which induces expansion of the division between labor and the internal market. It produces foreign-oriented loyalties and consequently the development of a dependent industrial bourgeoisie. Bureaucratic Dependent Bourgeoisie The state machinery and the monarchic political system is a frequent topic of discussion for scholars in— terested in the role of such an institutionalized system within the Asiatic social formation in Iran and some other peripheral countries. This particular social phenomenon attracts researchers who want to examine the functions of such a system in developing or sustaining development of the societies they govern. V The Asiatic societies and their Asiatic modes of pro- duction imply the role of the existence and persistence of such phenomenon in determining the fate of the societies in the pre-capitalist period and later when the societies were undermined by being peripherized, their social formations in— corporated into the world capitalist economy. The role and functions of the monarchic system and its court (and lately its bureaucratic administration) in the development of the social formation in Iranian society have been decisive. The relationships between the monarchic 225 state bureaucracy and the dependent bourgeoisie are a good example of its function in the dependence of the society. The colonialist countries in the nineteenth century intervened in Iran with the consent and participation of the monarch and his court. Then there were a series of treaties, of concessions and agreements to formalize relations between the countries. The emergence of the state capitalism in Reza Shah's period was a direct consequence of the influence of the mon— archic system on trade and other activities. Through this experience it seemed that state activity in the economic sector, especially investment in public institutions, was necessary. Thus the state itself assumed a capitalist role and invested in various economic sectors to modernize Iran. This trend eased the incorporation of Iran into the world market. State capitalism in Reza Shah's period allowed the state machinery and bureaucracy to develop, and become an administrative force to impose the regime's goals on people. This bureaucracy was the basis for emergence of a dependent bureaucratic bourgeoisie in that period. The state's financial, bureaucratic and military forces were in the hands of this statum and played a significant role in the development of the dependent bureaucratic bourgeoisie in Iran. They participate in any investment sector and appro- priate from them to expropriate a higher degree of surplus. 226 They become fat by these investments through misuse of their political, administrative and military positions. With control of natural resources, the state bank, and investments in industrial and mining fields, the expand- ing state bureaucracy found numerous ways of securing individ- ual interests and private income. This happened, not only among high level bureaucrats and technocrafts, but also among court officials and military officers. The Shah and his family were the largest capitalist in the country; they dom— inated great fertile lands, factories, mines and opened up various state and jointly merchandized units and cooperations. ...The other main result of the re- form is that the state has inter- vened in the village, and is now in three ways the dominant power there... It has guaranteed and where necessary created private property in land... (Halliday, 1979;118-119). Halliday also addressed the question of the origins of the in- creasingly large bureaucratic bourgeoisie. He found that many in this stratum had arisen from the ranks of dispossessed landowners after the reforms of the Shah's White Revolution. ...Some landowners have become part of the urban bourgeoisie while those with large holdings have been integrated into the new, composite, rural bourgeoisie. Some have become state employees of one kind or another; others have gone into private business. The state has indeed encouraged the conversion of landowners into urban capitalists by providing some of the dispossessed landowners with their compensation in the form of shares in government industries (Ibid, p. 134). 227 The reforms from above in Iran were done with the state machinery with its bureaucratic apparatus, police enforcement and the support of the U.S. Through them the Shah, his court and the state bureaucracy became more power- ful than before.) The bureaucracy, through its involvement in the land reform program, and import and export enter— prises, attained a large proportion of the state's power and became the strongest stratum of the dependent bourgeoisie because of its political power, participation in foreign concessions and state capitalist background. A major characteristic of the state bureaucracy was its involvement in economic investment. Although the regime wanted to see a new middle Class emerge to support private capitalist development, it was primarily the state bureau- cracy which participated in industrial, agricultural and export-import investment and activity. This created a con- flict between dependent industrial, commercial and financial bourgeoisie and the dependent bureaucratic bourgeoisie and provided for the expansion of the state machinery into whole spheres of social relations to control the society. This was a contradictory situation because the nature of peri- pheral capitalist formation requires the development of capital relations and free enterprise activity to extract the utmost surplus. But the intervention of the state bureau- cracy paralyzed this development. The state bureaucracy 228 wanted to dominate these strata with the help of the Shah and his police apparatus. But these strata wanted to have their own way for expropriation and appropriation of surplus production. This conflict situation increased when the state bureaucracy encountered financial problems in the early seventies because of decreasing oil revenues. The depend- ent bureaucratic bourgeoisie was the most powerful element of the dependent bourgeoisie and played a significant role in the domination of peripheral capitalism in Iran. Amin talks about the nature of the bureaucratic de— pendent bourgeoisie in saying that "...the bureaucratic de— velopments in the periphery need to be interpreted, in my opinion, in relation to their own setting, which is that of the formation of peripheral capitalism." (1974:386). Looney discusses the attributes of the dependent bureaucratic bourgeoisie in running the state machinery. Although his language and approach differ from the perspec- tive this study has Chosen, he gives concrete examples of the original function of the state machinery. He says: Another Supporting element has been Iran's human sources, especially the role played by the country's top govern- ment administrators and enterpreneus. As a result of the critical need for trained people and of the nation's tra- ditional social values that placed edu- cation in an elite category, Iran has long given high status and positions of public responsibility to a small corps of highly trained people. In addition, a young group of highly educated 229 technocrats, many of whom were trained under the military education system initiated by the White Revolution, has played a dominant role in Iran's recent development success (1977:17). The Financial Dependent Bourgeoisie As mentioned in previous chapters, the traditional money dealers in the Iranian pre-capitalist period functioned as bankers in the semi-colonial period. Some attempts were made to establish a banking system, by big merchants and money dealers, but the monarchic system and the colonial- policies of England and Russia distrusted this capitalistic activity and the result was their bankruptcy. Instead, the government permitted English and Russian banks to establish a banking system within the country. State capitalism, in Reza Shah's period, did not al- low private individuals to establish any banking system, but the government itself started the first state bank in Iran, which is now the Iranian National Bank. The 1950's saw the emergence and development of a private banking system held by Iranians and foreign capital- ists; in this decade about nine private banks and eight mixed banks were brought to life (Ashraf, 1971:266). In expanding the banking system in Iran, top officials and some 230 dependent capitalists enjoyed participation in this branch of profit-making activity. Because of its high rate of profits, banking in- creased rapidly in the early sixties. Within the decade (19603) about 824 units multiplied to 2,290 units spread throughout the country. Most of the shareholders in these banks belonged to the court and royal family, or were top officials, generals and landowners or foreign capitalists.. In the late 19603 and early 19703 most banking activity was still shared by a handful of families but during land reform, former land- owners, invested their compensation in this branch of de— pendent capital activity. The White Revolution initiated the policy that the world economic system and Iran's ruling Class wanted. Since that period economic development has favored the rise of groups controlling the financial sectors of the country and they have become the politically and economically dominant' group and close allies of the world capitalist economy. For example, the banking system is controlled by a financial group which is known to be comprised of dependent financial bourgeoisie who are allied with the multinational corpora- tions. Through control of the banking system this group, with its foreign-oriented allies, could retard the growth of 231 domestic industrial, agricultural and commercial systems. This went on continuously throughout the 1960's when the power of the traditional economic sectors and their social relations were waning. The strength of the foreign capital- ists, however, was on the rise. The multinational banking system also had an ex— ploitive role in the peripheral countries. All sorts of in- vestments in these countries were possible through this fin- ancial system. It channeled the flow of surplus value from the periphery toward the core countries. The banking system in Iran developed and dominated all areas of the economic sectors through controlling industrial, commercial and agricultural investment. Through the expan- sion of this sector, the expropriation and appropriation of surplus production and value became possible for foreign cap- italists. The following tables show that multinational char— acter of banking activities in Iran and the contributions of Iranian and foreign shareholders. The foreign banking system in Iran is an excellent example of the overall economic dependence of Iran on core countries. In 1979 there were twelve major U.S. banks with about $2.2 billion in assets which controlled most capital and investment activities. Table 29 shows the U.S. banks and their credit exposure, capital which was invested in loans, agricultural and industrial sectors of Iran in 1979. 2132 TABLE 25: IRAN: MAJOR IRANIAN BANKS IN 1975 Commercial Banks Year of Issued Capital Ownership (Percent) (All addresses Tehran) Establish- (Millions of ment U.S. Dollars) Iranian Foreign Bank of Tehran 1952 11.4 65 35 Bank Omran 1946 10.6 100 -- Bank Etebarat Iran 1958 9.9 60 40 The Foreign Bank of Iran ~ (Bank of America) 1958 9.9 60 40 Distributors Cooperative Credit Bank ‘ 1959 8.5 100 -- Russo-Iran Bank 1924 8.5 -- 100 Bank Bazargani Iran 1949 7.1 100 -- Mercantile Bank of Iran and Holland 1959 7.1 65 35 Bank Pars 1952 7.1 100 -- Bank Binnch Iran 1958 5.7 100 -- The Bank of Iran and the Middle East 1959 5.7 60 40 The Irano British Bank 1958 5.7 60 40 Bank Melli Iran . 1928 227.0 100 -- Bank Shahriyar 1973 71.0 100 -- Bank Saderat Iran 1952 42.6 100 -- Bank Sanaye Iran 1973 42.6 100 -- Bank Dariush (Continental Bank of Chicago) 1974 28.4 65 35 International Bank of Iran (Chase Manhattan) 1975 28.4 65 35 Irano Arab Bank 1975 28.4 66 34 Bank Sepah 1925 21.3 100 -- Bank Kar ‘ ‘ 1958 14.6 100 ~- Bank Refah Karagaran 1960 14.2 100 -- The International Bank of Iran and Japan (Bank of Tbkyo) 1960 14.2 100 ~- Iranian's Bank (Citibank,N.Y) 1959 14.2 65 35 SPECIAL BANKS Bank Markazi Iran 1960 354.6 100 -- Agricultural Cooperative Bank of Iran 1933 299.0 100 -- Bank Rahni Iran 1938 142.0 100 -- Industrial & Mining Develop- ment Bank of Iran 1959 89.5 85 15. Bank Sakhteman 1974 85.2 100 -- Industrial Credit Bank 1956 61.3 100 -- Agricultural Development Bank of Iran 1968 56.8 100 -- Bank Iranshahr 1958 42.6 100 -— Development & Investment Bank of Iran 1958 42.6 100 -- Development Bank of Azarbayjan 1975 14.2 100 -- Development Bank of Khazar _ Rasht 1975 14.2 100 -- Development Bank of Khuzestan Ahvaz 1975 14.2 100 -- SOURCE: Adapted from Iran A SurveyiofC.., 1977, p. 49. 233 TABLE 26: IRAN: FOREIGN BANK REPRESENTATIVE OFFICES ABECOR (associated Banks of Europe) Algemene Bank Nederland N.V........ ............. ..Netherlands Banque de Bruxelles Lambert S.A..... ............. .Belgium Bayerische Hypotheken and Wechsel Bank. DreSdenerBank AGoeeeeeeeeeeeeeeeeeeeee Oesterreichische Laender-bank..... ..West Germany ..West Germany ..Austria Banaca Commerciale Italiana.......................Italy Bank of America............. ..... . ............. ...United States Bank of Tokyo Ltd.................................Japan Bankers Trust Company.............................United States Banque Nationale de Paris........ ..... ............France Banque de Paris et des Pays—Bas...................France Banque Rothschild....... ........ . ............... ..France Barclays Bank Ltd ........ .. ....................... England Bayerische Vereins Bank Munich. Berliner Bank AG.............. Vereins and Westbank AG....... Brandt LtdOOOOOOOOOOOOOOOOO... Grindlays Bank Ltd ..... . ....................... The Chase Manhattan Bank. ....................... Commerz Bank AG.................. Credit Lyonnais.................... The First National Bank of Chicago. Citibank........................... The Fuji Bank Limited.... ............. Berliner Handels-Und Frankfurter Bank. Credit Commerciale de France.......... Krediet Bank Bruxelles............ Nederlandsche Middenstands Bank, Privat Banken A/SOOIOOOOOOOOOOOOOO ..West Germany ..West Germany ..West Germany ..England ..England ..United States ..West Germany ..France ..United States ..United States ..Japan ........... Germany .... ..... France ..Belgium ..Netherlands ..Denmark Williams and Glyn's Bank, Ltd. ............. .......England Korea Exchange Bank. ..... .... ..................... Korea Lloyds Bank International Ltd............ ....... ..England Manufacturers Hanover Trust Co....., ........... ...United States Morgan Grenfell & Co. Ltd........... ............ ..England Midland Bank Group....... ........... . ............. United States The Philadelphia National Bank .................... United States Societe Generale ...... . ..... . ..................... France Swiss Credit Bank.................................Switzerland The Sumitomo Bank Ltd....... ...... ................Japan Union Bank of Switzerland.. ......... ..... ...... ...Switzerland Swiss Bank Corporation ....... . ............. . ..... .Switzerland SOURCE: Adapted from Iran, A Survey of..., 1977, p.150 234 . TABLE 27: CREDIT EXPOSURE OF AMERICAN BANKS IN IRAN AS OF FEBRUARY 1979 Group Bank Location Credit A Citibank New York $200 million Chase Manhattan or Bank New York more B Chemical Bank New York Between First National Bank Chicago $100 Manufacturers Hanover Trust Co. New York and Morgan Guaranty Trust Co New York $200 Bank of America San Francisco million C Wells Fargo Bank San Francisco $100 million Security Pacific or less National Bank Los Angeles First National Bank Boston Western Bancorp Los Angeles Crocker National Bank San Francisco Estimated Total $2,200 million SOURCE: Adapted from I. Fatemi, "The Iranian Revolution," 1980, p.316. 235 Among the thirty-seven banks which operated in Iran, thirteen of them had foreign partners. The total foreign investment in the Iranian banks was about $75 million (Ibifi, p.311). The financial dependent bourgeoisie, through its active participation in the banking system in industrial and agri- cultural projects, subjugated senstive socioeconomic organs of the political system. The Shah and his family were some of the major investors in these areas. The insurance in- stitutions were another sect whicn was attractive to this group. The following table shows this activity. Agricultural Dependent Bourgeoisie After the land reforms domestic Iranian agricultural production decreased rapidly and paved the way for foreign oriented agricultural production. The result of this was the importation of even dairy products for people in cities and rural areas. Meanwhile, large agribusinesses were underway on the fertile lands expropriated by courtiers, high level military officers and merchants to cultivate food stuffs required by the world market. Fertile farms were highly mechanized by foreign companies and their internal allies. ,236 TABLE 28: ACTIVITIES OF FOREIGN AND IRANIAN INSURANCE COMPAN- IES IN IRAN IN 1976 Registered Capital in Company Year Established thousands of U.S. Dollars Yorkshire Insurance 1929 N.A. Inyostrakh Insurance 1931 N.A. Iran Insurance Co. 1935 2,960 Sharg Insurance Co. 1950 1,481 Arya Insurance Co. 1952 1,480 Pars Insurance Co. 1955 740 Milli Insurance Co. 1956 900 Alboiz Insurance Co. 1959 1,480 Asia Insurance Co. 1959 740 Omid Insurance Co. 1960 810 Construction Labor Insurance Co. 1964 740 Dana Insurance 1974 7,400 Hafeez Insurance Co. 1974 14,800 Iran-America Inter- national Insurance Company 1975 14,800 Crasi Savoye Iran 1975 N.A. SOURCE: From Iran A Survey of..., 1977, p.152. 237 The government contributed to such production by building dams where necessary, financing some agribusiness operations and giving operators the right to expropriate private and state lands for such uses. The develOpment of a dependent agricultural bour- geoisie resulted as the Iranian agricultural economic sec- tor became dependent on foreign-oriented production. From being one of the net exporters of agricultural products, Iran became, after the White Revolution, one of the coun- tries which had to import the agricultural products neces- sary for people's daily consumption. Hence the White Revolution alienated the large land- owners but the material base of that system remained allied with the political system. The goal of the land reforms was to free this material base for new development but it was also a response to peasant or working class demands for better living standards and ownership of land. It came about because it was to restore agricultural profitability by form- ing a new alliance with the world capitalist economy- It was successful because a new agricultural Class began to emerge and organize in cooperation with that world system, which the analyzing of such phenomenon is the task of this study. 238 It was supposed that land reform would help to sup- ply the accumulated needs of industries with Cheap peasant labor and a flow of industrial productts toward rural vil- lages. But the policy affirmed the former landowners were welcome to participate in the new production order if they so chose. .Most did and this group was incorporated into the new political and economic order and restored to some strata of the dependent bourgeoisie, such as the dependent agri- cultural group. However, the economy encountered some severe short- ages of foodstuffs, and the government began to import them on a large scale. The food crisis remained acute through the 19603 and 19703; official figures for the output of rice, wheat, meat and other foods were literally lower than before land reform. The following table presents the production of major agricultural crops from 1969 to 1977. It shows how agricul- tural products declined during these years, even though land reforms had been carried out. The dependent agricultural bourgeoisie was the newest member of the dependent bourgeoisie and arose through land reform. Although some fertile lands in Iran have been newly cultivated in that last decades and mechanized for agricul- tural production, it was through land reform that most of the profitable lands were mechanized and went under cultivation. 239 TABLE 293 PRODUCTION OF MAJOR AGRICULTURAL CROPS FOR SELECTED YEARS 1969—1977 (in thousands of tons) Commodity, 1969 1972 1975 1977 Wheat - 4,400 3,700 4,700 5,000 Sugar Beets 3,410 3,980 4,300 5,250 Barley 1,160 900 863 1,100 Rice 960 1,050 1,313 1,400 Cotton 454 444 715 425 Oilseeds 10 46 79 89 Green Tea 81 65 96 88 SOURCE: Adapted from Iran, A Country Study, 1978, p.433. 240 This cultivation and mechanization was not performed by local farmers and peasants, but by large landowners, courtiers, state bureaucrats and foreign investors. One of the goals of reform was'Ulopen up the rural areBSto capitalist production. By doing this, the socio- economic structure of the Iranian society changed through industrialization to a peripheral capitalist formation which replaced traditional agricultural, handmade and manu— factured products with the fruits of capitalism on the world market. The other goal of land reform was to establish a large scale agribusiness sector in fertile areas to take advantage of agricultural mechanization and economies of scale to pro- duce agricultural products for a worldwide market. The nec- essary communication systems, roads, airports and other im- port and export facilities were undertaken by the govern- ment. The consequences, however, of this world market- oriented policy were drastic decrease in agricultural pro— duction for the domestic market. ...Although it was carried out under the slogan of 'land to the tiller', and thereby supposed to have an egalitarian character, the implementation of the reform has been such as to create new social division in the countryside, in fact to create a cap- italist Class structure in place of the earlier pre-capitalist one. 241 Reform has consequently created a new rural bourgeoisie and a new pro- letariat. The bourgeoisie's members include some of the old landowning families who have in one way or another retained land, plus those members of the previously better-off peasantary'who have become owners too (Halliday, 1979:103, 118). This decrease was so great that Iran became, from being a net exporter of foodstuffs, a net importer of food to feed its population daily (207,113.3 metric tons ex- ported vs. 3,185,950.5 metric tons imported in 1975). The decrease in domestic food production worsened as peasants moved toward wage labor in the cities‘newly estab- lished industries. Thus, indirectly, one of the core coun- tries' major goals, access to cheap labor in the peripheral countries, was accomplished. With the advantages of Cheap wage labor in rural, as well as urban areas, mechanization, large fertile lands, inexpensive artificial irrigation, an influx of cash from foreign capitalists and the sale of luxury products, farming gave way to agribusiness and agriculture became profitable enough to give rise to a dependent agricultural bourgeoisie. Table 32 points out the sources of foreign investment in Iranian agirculture and its effects. It should be noted that some of the largest multinational corporations are represented. As to where the money is going, Table 33 242 showing the projects that were granted loans indicates that agribusiness received more than three times the amount granted its nearest competitor. To sum up, the dependent agircultural bourgeoisie in Iran is a new phenomenon whose emergence began with the road, dam and railroad construction that followed World War II. Although Reza Shah dispersed the tribes in the arable areas to incorporate their lands into the crown, it was land reform which resulted in the rise of agricultural bour— geoisie. Numbers of peasants, expelled for their lands, be— gan to rush toward large cities to join the labor army of the newly organized industrial sectors. Many agricultural corporations, established in the Khusitan, Azarbijan, Gurgan,‘ Fars and Mished areas, within a decade after land reform, grew rapidly to become one of the most profitable sectors in the economy. Because these corporations produced luxury foods for export, this agri- cultural development also resulted in a scarcity of domestic agricultural products and the net importation of food to feed the Iranian people. 243 TABLE 30: FOREIGN INVESTORS IN IRANIAN AGRIBUSINESS Name of Date Agribusiness Established Hectares Investors Iran-American - N.H. Agro- Agro Industrial industries Company - 1970 20,263 Co., private Iranian in- vestors, ADBI Iran California Transworld Co. 1970 1,050 Agricultural Development Corporation, Bank of America, ADBI, John Deere and Co., private Iranian investors, Khuzistan water and power Iran Shellcott 1971 15,796 Shell interna- tional, Mitchell Cotts Develop- ment, Finance Co., Ltd. ADBI, Bank Omran. Internation 1973 16,690 ADBI, Ahwaz Sugar Beet & Refinery Co., Khuzistan Water & Power Authority, Chase Interna— tional Investment Corporation, Mitsui and Co.Ltd. Hawaiian Agro— nomics Co., Inter- national Diamond A Cattle Co. SOURCE: Adapted from IranLiA Survey of U.S. Business Opportunities, 1977, p.19. 244 TABLE 31: PROJECTS GRANTED LOANS BY THE AGRICULTURAL DE— VELOPMENT BANK (IRAN) IN 1975 Loan Amount Types of Activity No. of Projects (in U.S. dollars) Cultivation & . sheep raising - 277 51.3 Poultry farms 89 103.0 Orchards 157 29.4 Dairy Farms 59 31.0 Agri-business 19 320.8 Agricultural services 7 12.1 Distribution and marketing 12 70.5 Industrial Relative to agriculture 62 75.8 TOTAL 682 694.8 SOURCE: From: Iran, A Survey of U.S. Business Opportunity, 1977, p.25. PART IV THE MAJOR EFFECTS OF THE DOMINANT DEPENDENT BOURGEOISIE ON IRAN'S SOCIO-ECONOMIC FORMATION The peripheral capitalist social formation and its. class relations in Iran over the last two decades created some undesirable conditions and major problems for Iranian society. The creation of the dependent bourgeoisie and its domination throughout the society was nOt a minor event to be ignored. Foreign political, economic and cultural pene- tration and influence were revealed in the actions of this Class. It was apparent that the dependent bourgeoisie were direct allies of the core countries which expropriated and appropriated Iranian revenue for uses outside the country. The main factor with which Iran had to contend was that its international situation and its internal socio- economic conditions. Thus, any international recession, crises, or economic fluctuations affected the Iranian econ- omic and social formation. Following the Shah's White Revolution the reforms of the 1960's and resulting economic growth Changed the Iranian 245 246 socioeconomiC= formation; it could not effectivley improve the and and bit but for and Iranian social conditions of life as the Shah claimed the people expected. The oil revenue increased, heavy light industries were established around Tehran and the cities_and the military bases and power were restored, Iran could not afford decentralized planning and policy independent economic and societal development. The Shah his political allies did not concern themselves with social services such as education, health. socioeconomic equality, social justice and popular participation in polity. The suppression of the people did not allow them to form political organizations to participate in socioeconomic policy making. Saikal describes the situation: By the end of 1975, after two years of high government spending, heavy impor- tation of advanced industrial and mili- tary capital goods, and increased foreign investment (particularly by multinational corporations, mostly in specialized and capital, intensive industries, led by petro Chemicals and rubber), Iran was confronted with a serious shortage of trained manpower and an abundance of technical, infrastructural, and admin— istrative bottlenecks, as well as a spiralling inflation, a drop in its agricultural production, and social imbalances...since the Cities, especially Tehran, were the major centers for the sudden increase in capital accumulation and economic/industrial activities, the rural population began migrating to the cities in search of better employment and wages more rapidly than had been expected. (1980:184). 247 Although land reform had occurred in Iran and land- owning as a mode of production had already disappeared from the economy, agricultural production not only did not in- crease, but decreased rapidly. Migration of the peasants toward big cities, expropriation of the fertile lands by the former landowners, courtiers and top officials, and for- eign companies paved the way for decreasing the lifestock and food production; the independent agricultural bourgeoisie started to plant and produce the products that were required by the world market. This sort of agricultural activity meant the regime had to become a net importer of livestock and agricultural goods. As the result of such a policy, the government im- ported $2,500 million worth of food which was 10 percent of the oil revenues of 1977 (Ibid:184). The conflict between the town and villages, not only did not decrease, but over the last two decades it increased because of the increasing income in the urban areas and the. build up of industries and other facilities. The villages became isolated, alienated and fragmented areas. Capitalist relations, such as the consumer life style supported by the regime's propoganda, became dominant and deformed the life in the villages without giving them a suitable means of life. It resulted in movement of the villagers toward the cities 248 for higher paying, less onerous jobs. The consequence was a further decrease in agricultural goods and foods. Foreign and internal investors, through investing in much more profitable economic sectors such as petro Chemi— cals, pharmaceuticals, rubber, electrical appliances, auto- 'mobiles, and transport and metallurgical industries paved the way for the dependent industrialization of the Iranian economy. The result was a flow of the surplus out of the country, import of technology, and advisors, and the decline of the traditional Iranian domestic factories and industries because of the foreign-oriented policy of the government. Since the reform program had been planned from out- side it satisfied the requirements of the world capitalist countries, but did not meet the needs of most Iranians for socioeconomic development. Therefore, the reform or the so- called "revolution from above" could not win the people's support and the socioeconomic contradictions started to show. The increasing gap between the ruling class and dependent bourgeoisie and the other classes led to protests and re- sistance against the reforms. The progressive and reaction- ary groups were against the economic programs. Although there were increasing oil revenues and the U.S. backed the regime and the reform program, it could not improve the socioeconomic conditions of most peoples' lives because of its dependence on foreign requirements and the development of peripheral capitalist relationships among the people. 249 Recent events have revealed the antagonistic re- lations present in the society over the past few decades. The political pressures and lack of political organizations because of an autocratic monarchy increased the protests and resistance against the government and led progressive and reactiOnary social groups to rise against the regime. The partisan struggles, the peoples' flight from rural areas to urban settlements and a dissatisfied intellectual group pushed the regime to a critical point. International events such as an‘economic crisis of world capitalism and Jimmy Carter's human rights policy created conditions in which internal protesters could stand against the regime to show their hate to the regime, which was not for the regime, alone, but for its foreign allies as well. We will examine these events in this part of the re— search to show how the dependent bourgeoisie through its domination caused the problem which eventually resulted in the overthrow of a regime which was supposed to be one of the strongest pro-Western governments in the periphery areas. CHAPTER TEN SOCIO-ECONOMIC CONDITIONS AFTER THE SHAH'S WHITE REVOLUTION: THE PRESENCE OF MULTINATIONAL CORPORATIONS IN PEOPLE'S EVERYDAY LIVES Inspite of the Shah and his regime's claims, and although the country had vast oil revenues, the majority of people in urban and rural areas were poor. The imposed reforms could not cover the ugly face of a regime which was dependent on foreign—oriented development. The only inter- nal group which benefitted from the situation was the de- pendent bourgeoisie who piled the country's wealth in for- eign banks. Saikal explains the Shah's White Revolution as follows: Eventually, in 1963, there unfolded a reform program, which had already been initiated by his American-backed Prime Minister, 'Ali Amini (1961-1962), within the framework of what the Shah called, 'The White Revolution' (Engelabe Sefid). The program entailed both domestic and foreign policy Changes, with important implications for the Shah's domestic and regional position and for Iranian-American relationships. (l980:p.17l). Despite the reforms of the 19603, the continued American military and financial aid and the increasing Oil revenues in the 19703, the Iranian economy was in the grip 250 251 of rising prices, pervasive waste and corruption. Hence, the dependence of its socioeconomic growth on foreign- oriented planning could not help the socioeconomic conditions of life, but only deepened the dissatisfaction, protesting and unorganized mass uprisings during the last two decades. Through reliable statistical data the political econ- omists who are specialists in the Middle East and the Iranian society have discovered the characteristics and the nature of the recent economic growth. Generally, the period under study can be divided into two sub-periods in terms of Iranian economic development: the period between the beginning of the reforms in the 19603 until the increase in oil prices in the early 19703, and from then until the uprising of the Iranian people against the political regime in 1978. Although the first sub-period includes the Shah's reforms and the massive military and economic assistance of the United States, it was socially and economically an un- successful period from the regime because of its failure to effect real reforms in the socioeconomic and political arena. The reforms did not give the opportunity to social groups to participate in socioeconomic planning, they were fooled by the regime over and over. The regime got their support illegally to stabilize its political system. Hence, the economic problems were not resolved, the political sup- pression increased and the people were threatened by secret 252 police and paramilitary groups. This situation revealed the failure of the Shah's reforms which were supposed to improve the socioeconomic and socio-cultural conditions for life. It only worsened the people's social and individual condi- tion. The protests of various cultural, religious, economic and intellectual groups finally exposed the socioeconomic situation under this period. In the second sub—period, the regime, through the sud- den influx of vast oil revenues, could "paper-over" the socioeconomic problems for years, which helped them to re- tain power through the fifth plan. This economic plan for rapid growth, not only did not decrease Iran's core-peripheral relations, but it increased its economic cooperation with the United States and made it possible for the United States to realize its interests in the Middle East. The following statement by U.S. officials reveals the Iranian socio- economic situation after the reforms of the 19603 and the rise of Oil revenues. Imports affored the only way to improve conditions for the population. Hence the authorities annually used a large share of the foreign exchange received from exports to purchase goods abroad, such as foods, medicines, and machinery. Imports (excluding military) increased from U.S. $688 million in 1960 to U.S. $12.8 billion in FY 1976, an‘ average increase of about 20 percent a year. Imports accelerated sharply after 1973 (in- creasing by 77 percent in FY 1974 and 77 per- cent in FY 75 because of the large investment program and government imports to fight in- flation. Imported increased by about 10 per- cent in FY 1976. (Iran, A Country Study, 1976, p.258). 253 This information is shown in the following Table. (Table 34). Thus the consequences of the peripheral capitalist development in recent years not only did not increase agri- cultural products and some other economic consumer sectors, but ilzrather miserably decreased these economic sectors. The land reforms of 1962 and the economic growth of the early 19703 only contributed to declines in domestic agri- cultural development. Comparatives Tables (35 and 36) show the relationship of recent Iranian economic growth and the effect on the agricultural sector. Comparing these two tables shows that there was lit— tle relation between an annually rising G.N.P. and the annual fluctuations of total and per capita agricultural production. In contrast, agricultural production generally declined. Economic growth in Iran which coincided with land re- form and generally with the Shah's White Revolution was the result of increasing oil revenues which paved the way for rapid peripheral capitalist development. It made possible the growth of big companies belonging to dependent bourgeoisie and the influx of foreign investments to bourgeois agri— cultural and industrial sectors, as we see in this work. In contrast to domestic agricultural production, in- dustrialization proceeded at a rapid rate of growth. This 254 TABLE 32: COMPOSITION OF IMPORTS, 1971-75 IN MILLIONS OF U.S. DOLLARS Commodities 1971 1973 1974 1975 Food 174 332 865 1581 Chemicals 164 356 649 835 Basic Manufactures 692 1348 2380 3538 Machinery and Equipment 866 1403 2109 4973 TOTAL IMPORTS 1886 3439 6003 10929 SOURCE: Adopted from: Iran: A Country Study, 1978, p.426. 255 TABLE 33: GROSS NATIONAL PRODUCT 1960-1972 (in 1971 Prices) Year Total GNP Rate of Per Capita Rate of (Millions Growth GNP Growth of U.S. S) 1960 5040 -- 234 -- 1965 6970 7.7 281 4.0 1966 7510 7.7 294 4.6 1967 8390 11.7 319 8.5 1968 9200 9.6 340 6.6 1969 10020 8.9 359 5.6 1970 11150 11.3 389 8.3 1971 12750 14.3 428 10.0 1972 14400 12.9 470 9.8 SOURCE: From Hossein Askari and Shuhrah Majin, Recent Economic Growth in Iran, 1976, p.106. 256 TABLE 34‘ INDEX OF AGRICULTURAL PRODUCTION (1961-65 = 100) Year Total Rate of Per Capita Rate of Production Growth Production Growth 1960 88 -- 96 -_ 1965 105 +3.9 99 +0.6 1968 133 +8.9 115 +3.0 1969 128 +3.9 108 +6.1 1970 133 -3.19 109 + .9 1971 119 -10.5 94 -l3.8 1972 133 -1l.7 102 +8.5 SOURCE: _I_1_>_i_d_,p.106. 257 growth included subsidiary industries such as automobile, bus, truck, refrigeration, oil and gas production. Most of these industries were supported by foreign capital and investors. The following United Nations statistical data indicates how this recent development affected the Iranian socioeconomic structure and led it toward peripheral de- velopment. (Table 37). These figures should be compared with the contribu— tions of such economic growth to the major Iranian economic sectors. They indicate the recent economic growth was due to increasing revenues from oil. (Table 38). The economic growth and its effects on Iranian socio- economic formation are apparent if we consider the rate of the contributions of such growth to GNP by major sectors. Overall the following statistical facts issued by the Iran- ian government at the time, explain the characteristics of recent socioeconomic Changes in Iran. (Table 39). It was this economic growth that prompted Keddie, the American sociologist and specialist in Iran, to discuss the Iranian economic problems: Perhaps the largest social problem of recent years is the constantly growing gap between income strata. This increasing income distribution gap is felt between city and countryside, between the Tehran region and the provinces, and between the lower and upper classes. While the rich, helped by the possibilities arising from Iran's huge oil income, have been getting much richer, and new people have been joining the ranks of the rich, most of the poor have been getting only a little richer (1978:323). 258 .ooa .Q .oama .maoauo< m.aumcm¢ ca concommaaou .moaumaumum «0 sauoaasm manucoz .z.: new soooammm amoaumaamum .z.s "somDOm ~.om mm4 4.aa mmm 4.ma 4am a.ma mmm aama memm amm a.aa mam m.m mom m.m amm oama m.o4 mmm a.ma mma a.mm m4~ a.mm mma mmma m.~: 4ma m.oa 4aa a.ma mma 4.m mma mmma m.ma mma m.ma ama m.4a aaa m.ma oaa amma o.4~ m4a m.ma mma 4.ma ama m.ma ama mmma a: mm :7 ma as ma 1: ma ooma R mmmu R HO R * cuzoao o auao cuzouo Inauomm nusouo x cuzouu .coum mo oumm Iauuooam mo oumm 15cm: mo oumm ocacaz mo comm .Uca coo» aooaflmomav ZOHBUDQOmm JaJ o aaOIcoz uoz mwua>uwm o Hmumz nonhumcoo Icmuav aao Iommscmz mucuasoaamc How» mmOBumm mOhcz am mZO OB ZOHBDmHmBZOU "mm mamas .oaoauac m.aummm< soon .unommm amscc< .cmna HO xcmm amaycou "mumDOm m.ma -- m.4a m.aa m.~a+ a.oa+ m.aa+ o.oa+l a.ma ma\mama m.ma. n- a.ma a.ma m.ma+ m.a~+ m.ma+ m.m m.ma ~a\aama m.ma .. m.am a.ma m.~a+ a.mm- a.ma+ m.m+ m.m aa\oama m m.4a I- m.ma m.mm m.ma- m.o~+ m.am+ m.4+ m.ma oa\mmma m.4n .. a.m: m.mm m. . 4.~m+ 4.mm- m. . m.m mm\mmma a.ma I- m.ma m.m 4.aa- m. . 4.mm m.a+ m.ma mm\amma m.m .. m.m m.am m. 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Thus most of the agri— Cultural areas were expropriated by the agricultur- al bourgeois and foreign firms for cultivation of foreign-oriented products. The uneven development that led the society toward conflict by creating big gaps between ethnic groups urban and rural areas, Tehran and the other cities, and between various social and economic groups. The result was appropriation of the country's sur- plus by the dependent bourgeoisie and their for- eign allies. The peripheral mode of production and its tech— nological dependence disarticulated the Iranian economic system and produced richly developed areas, created by establishing non-productive manufacturers and non-competitive industries feeding the world market, and underdeveloped urban and rural areas which produced traditional products for local mar- kets. Expansion of the state machinery through the de- development of a dependent bureaucratic bourgeoisie 277 that garnered and controlled foreign aid and in- vestment and thus controlled much of the popula- tion. Inefficiency, nepotism, and corruption in this element resulted in the inefficiency of the total state apparatus in planning for socioeconomic development based on internal needs and priorities. Such economic chaos engendered social disruptions and forced the monarchic system to depend on the armed forces to secure the state and its foreign capital investments. The state's motives in ex— pending oil revenues for military purchases were thus to meet such an eventuality. These devices failed when the second economic crisis since the mid-1970's occurred. Oil revenues went down when the world market decided to reduce the use of oil and other petroleum products. Depen— dence on this single raw material had obscurred the underlying problems of the monarchy and its wide spread economic and social apparatus. 'Thus, when there was an uprising led by a popular religious figure, and the world capitalist countries failed 18 to support the Shah, the regime toppled. CHAPTER ELEVEN RADICAL MOVEMENTS AGAINST THE . DOMINANT POLITICO-ECONOMIC SYSTEM AND ,THE CORE CAPITALIST COUNTRIES It had taken about two decades for the Iranian monarchy and its state machinery to repress and eliminate internal oppositions to pave the way for the peripheral socio-cultural and politico-economic development extant between 1962-1978. The role and position of the U.S. after World War II, was to aid and support the regime. The Shah's White Revolution in 1962 was a periOd that the regime after the reforms, examined and designed Iranian foreign policy. Along with the suppres- sion of internal oppositions, the regime was willing to re- press by threats in the Middle East because any changes in the political conditions of the conservative regimes, in the region were a direct threat to the monarchy in Iran. By the "reforms from above" and the imposition of the dependent bourgeoisie as a politico-economic dominant system in Iran, the monarchy and its state machinery with its mili- tary power assumed the role of the old colonial capitalist, England, and secured the stability of the region with econ- omic, political and military support from the U.S. Thus, Iran, after the Shah's White Revolution, became the gandarme of the region (Halliday, 1979:251). 278 279 There were two effective factors for which Iran had been Chosen by core countries for such a position in the Mid- dle East. These two factors were: internal and external. The major internal reasons for the regime's foreign—oriented policies were: (a) lack of internal support from progressive (groups; (b) lack of socio-cultural cohesion in Iran; (c) repression of all political groups by the regime in order to secure the state; (d) the existence of various modes of production and consequently various classes and contradictions among and between classes; and finally (e) the existence of the resources for gaining such a position, such as, oil and population. The main external factors which led the Shah's regime to be the world capitalists' ally were: (a) the coun- try's strategic position in Asia; (b) the U.S. support of the regime since World War II; (c) the importance of securing the oil producing countries from any threats; (d) the coun- try's long boundary with Russia; and, most important (e) its developing dependent bourgeoisie. The domination of the dependent bourgeoisie in Iran was the key to achieving its position as the core countries' ally. Although, Iran by achieving its economic development secured the flow of capital and its investments throughout the country, recent events in Iran had revealed the conflicts and contradictions which the regime had covered up. Through suppressing its oppositions and getting the support of the 280 core countries, Iran was delivered sophisticated military equipment. The two following tables show the militarization of Iran through increases in its defense budget, and purchase of military equipment_from the U.S. However, oppositional politics had taken a socio- economic stand against the dominant political system since the early years of the Pahlavi's regime, because the nature and politics of the regime were foreign-oriented, foreign- supported, and oppressive. Over the past decades, the regime had not only suppressed nationalist,religious, and socialist tendencies, but also suppressed the independent bourgeoisie which attempted to be active in creating inde- pendent capitalist social formation. The history of the early twentieth century is full of such struggles against the Pahlavi's regime. The core coun- tries, led by England and then by the United States, supported this polity and aided the government in suppressing progres- sive socioeconomic activities. The result was a fragmenta- tion of Iran's political organization and group efforts at mobilizing the people against socioeconomic inequalities. Long unsuccessful, the underground and resistance groups per- sisted in Iran and revealed themselves where and when it was suitable. Thus, the struggles continued in various forms over the past century. 281 TABLE 48‘ IRAN'S DEFENSE BUDGET 1970-77 (IN U.S. $ MILLIONS AT CURRENT PRICES) Percentage Increase Year Defense Budget Over Previous Year 1970 880 -_ 1971 1,065 17 1972 1,375 29 1973 1,525 11 1974 3,680 141 1975 6,325 72 1976 8,925 41 1977 9,400 5 SOURCE: Halliday, Iran: Dictatorship and Development, 1979 TABLE 49: U.S. MILITARY SALES TO IRAN 1950-1977 (IN U.S. 3 MILLION AT CURRENT PRICES) Year 1956-69 757.0 1970 113.2 1971 396.8 1972 519.1 1973 2,157.4 1974 4,373.2 1975 3,021.0 1976 1,458.7 1977 4,213.0 1950-77 17,669.4 Estimate SOURCE: F. Halliday, 1979 282 Therefore, the social movements which have occurred over the past two decades represent the nature, character- istics and trends of the dominant socioeconomic system. The slowly organizing development of peripheral capitalism in Iran over the past decades and its situation since 1962 in which it dominated the socioeconomic system revealed its ultimate purpose. Various groups over the last decades, from progressive to reactionary, represented their suppres- sion by the monarchy and dependent bourgeoisie. The partici- pation of all these social groups in people's uprising of 1978—1979 shows the dissatisfaction of all the classes and strata with the regime. The participation of the workers in radical movements was not surprising. Their conditions of life in urban areas reveals that the goals of the political system and its socio- economic plans were not for the common peoples' betterment but for the development of peripheral capitalist relations. The inflation, rising prices of housing, schooling and food were significant factors showing that the recent economic growth and industrialization were no boom for the working people. The local and indigenous merchants, craftsmen, and supporters of independent bourgeoisie tendency in the bazaars of the Iranian cities, especially in Tehran, were also against the regime and its socioeconomic programs. These groups had been isolated from socioeconomic activities during the 283 Pahlavis regime in favor of dependent bourgeoisie. They showed their dissatisfaction by participation in various movements that supported their interests and opposed those of the Shah and his allies. The educated middle class, composed of several social groups with various economic and social backgrounds, opposed the regime and its socioeconomic plans. These social groups, state employees, university students, private companies' employees, ‘technocrats, and teachers, analyzed and under- stood how the penetration of the world capitalist economy had turned the Iranian economy into a peripheral capitalist formation. They could see how the political system through the dominant dependent bourgeoisie had exploited the society in their own interest and the interests of foreign companies and dispersed the surplus value to foreign banks. This real- ization made these groups angry with the regime, the depen— dent bourgeoisie and the foreign countries which supported this system. i The religious groups and their protests and struggles against the regime are known throughout Iran and the world at the present time. These religious movements in Iran have their own historical background that needs to be considered in Iran's socio-cultural and politico—economic context. The recent Iranian developments have religious characteristics 2 84"- that extend back before the Iranian constitutional revolu— tion of 1906. The penetration of the capitalist influence into the colonized countries in the early nineteenth century that continued throughout the twentieth century made the religious leaders and their supporters angry with the political system. The foreign-oriented socioeconomic system, the presence of the foreign companies and foreign advisors and, most importantly, the penetration of Western lifestyles, was taken as a threat by the religious groups. The continu- ous opposition of these cultural groups against the political system over the last two decades made them one of the major politico-religious forces that threatened the established political system. Nationalistic tendencies in history of Iran also have a significant place in Iranian social movements. Most of these movements were against the central government and its foreign allies and their repression of ethnic groups in Iran. The influence of the bourgeois' tendency on Iranian society, the domination by the colonial powers in the nineteenth cen— tury and the influence of world capitalist economy on the Iranian socioeconomic system in the twentieth century led nationalist movement to rise up against the internal politi- cal government and its foreign supporters. The exploitation and suppression of ethnic groups in Iranian society was and is one of the worst characteristics of the central political 285 system over the last few decades. Strong protests against this system, which had governed the society through suppres- sion, arose from nationalist tendencies. In this chapter, the social movements which arose as a direct result of the domination of the dependent political system and its dependent bourgeoisie will be discussed. It was the emergence and development of the peripheral capital— istformation which changed the social structure in Iran and gave new impetus to radical and reactionary social movements. These movements were different from the others which had oc- curred repeatedly in Iran over the past centuries. Their purposes, tactics and strategies were a reaction to the es- tablished political system, the socioeconomic conditions of life and, finally, dependent on the international situation. To analyze the major characteristics of these Iranian socioeconomic movements, they have been divided into four categories: (1) nationalistic movements; (2) religious move- ments; (3) bourgeois movements; and, (4) socialist movements. Briefly, I will review these movements to show how all these socio-cultural and politico-economic groups became united against the political system. The suppression policy of that system and the continued struggles of the Iranian people were the critical and determinant forces of the Iran- ian socioeconomic formation. Recent Iranian history is full 286 of mass uprisings, armed struggles, socio-cultural and poli- tical protests. The resistence of the people which represented the struggle between people and the political government never stopped. ‘The Nationalist Movements Iran is a multinational society comprised of various ethnic groups which are different in terms of language, cul- ture, religion and socioeconomic conditions of life. Over the past centuries the ethnic groups had their struggles against each other to exert their authority over the society in interests of their own members. It was the penetration of the colonial-oriented capitalist mode of production in the early nineteenth century which gave these ethnic groups the idea they would have to struggle for their identities. Briefly, the Fars, Azarbaijanis, Kurdish, Gilakis, Mazandaranis, Turkmanis, Baluchis and Arab ethnic groups were involved in process of establishing an Iranian country. The Fars ethnic group has, however, dominated the other ethnic groups politically, economically, and culturally. The nationalist movements over the past decades, es- pecially after the Constitutional Revolution of 1906, had specific Characteristics. These movements opposed unequal living conditions among the different ethnic groups and sup— pression of their identities by the dominant ethnic group, namely, the Fars, and the central government. 287 For example, the Azarbiajanis movements lead by Sheikh Khiabani in the early twentieth century and the Pishararis movement in 1945 were all against the domination and exploitation of the central government which had sup- pressed these people over past decades. Keddie talks about (the nationalist Azarbaijanian movement of 1905-11: A Democratic party was formed under Sheikh Mohmmad Khiabani, a leader of the 1905-11 movement in Azarbaijan . By April 1920, it was strong enough to force the government's agents to quit Tabriz. The movement was reformist and also expressed newly awakened na- tional sentiments of the Turkish-speaking Azarbaijanis, some of whom felt oppressed by the Persian central government. Khiabani formed an autonomous local government and renamed the Province Azadistan (Azadafree). Reforms like price control were undertaken to counteract continued inflation. The success of the Azarbaijani movement encour- aged similar forces elsewhere.... The government supporessed the Azarbaijani move— ment through use of the Cassack Brigader. Khiabani was killed and reprisals taken. (1981:83—85). All the nationalist-oriented movements were suppressed by military forces over the decades and the domination of the central government was a well known characteristic of the Iranian political system. The government put down any move- ment that threatened the central government. For example, in 1921, the central government overran the Jangal movement of Gilan and suppressed it. 288 In the same year they destroyed the Kurdish movement in Kurdstan and the Khorasanian movement in northeast Iran with its superior armed forces (Keddie, 1981:88-89). From 1940 to 1978 the political system attempted to overpower and isolate the ethnic groups by politics of "divide and govern". It suppressed all ethnic movements throughout this period, and, not only did not allow these people to participate in their own economic and cultural affairs, but tried to assimiliate them into the dominant ethnic groups, the Fars. The attempts of the central government failed and ethnic struggles continued for improved living conditions and socio-cultural identity. The participation of the various ethnic groups in recent revolutions, in spite of their ethnic diversity reveals the broad base and strength of their dissatisfaction with the established system. The Religious Movements Socio-cultural factors have been fundamental forces in the formation of social life and social relations in Iran from its earliest periods. Religion as one of the major in- stitutions of socio-cultural phenomena has shaped the histor- ical and societal process of social movements in Iran. It has had progressive or reactionary effects on these movements. Thus religion has had an active role in Iranian culture. 289; In the politico-economic shperes of social life, the function of religion, as an ideological instrument of the political system, has been significant. Every social move- ment against or for the established political system has had a religious element. Iranians have often appealed to religion to protest against their socioeconomic conditions of life. It is a Characteristic of the Iranian society like other Asian socie- ties which maintains religion as an instrument to show the suppression and critical socioeconomic conditions of life. That is why the social scientists involved in Asian studies discuss the specific religions historical development of these countries. The state and religion have had a close relationship to each other. Together they have dominated the country's social life throughout Iranian history. When they cooporated with each other the society was stabilized by their united power and the powerful alliance of spiritual and secular ruling groups. When they have been in conflict the society has been unstable. The kings and ruling Class in Iran have attempted to retain the support of religious leaders through giving them lands, some part of the state revenues, and social or cultural positions. The religious leaders, like any other socio- cultural group, related primarily to their socioeconomic 290, positions. Some promoted the ruling class because of their own high positions in that ruling class. Others took the common people's side in any conflict because their own socio- economic positions identified them with the lower and middle classes. On this basis Iran's religious leaders have histor- ically formed two factions. Frequently, throughout Iran's history the religious leaders have stood with the people against changes desired by the ruling Class. In other words, if socioeconomic Changes went against the established religious norms, behaviours and beliefs, religious leaders took a conservative position and conflicts between the ruling class and these leaders were produced. The common people tended to the religious side because of their own protests against a ruling class that was repressive and exploitive. Although the ruling class in Iran was composed of the king, his courtiers, tribal Khans, landholders, religious leaders, top military officers, high state bureaucrats and wealthy mercnants, it was the religious leaders who could mobilize the people because of their great commitment to re- ligion. This was an instrument in the hands of the religious leaders who used it to threaten the king and the ruling class now and then. In the recent century the functions of religion in Iranian socioeconomic movements has been tooppose the pene- tration of capitalism since it began with the colonialist 291 ideology in the early nineteenth century. This penetration, not only disarticulated the Iranian economy, but also cul- turally alienated the Iranian people from their folk-ways. Hence, socioeconomic and politico-cultural positions of the religious groupswere threatened by these changes, which also worsened living conditions for the common people. Thus socioeconomic Changes and religious ideology have paved the way for the protests and uprisings of the people in this century. In these events most of the religious leaders have been on the side of the people because their own situations were threatened as well as the peoples' by the processes of dependent capitalist social formation. Religious movements over the last decades were sup- pressed by Pahlavi's regime not only because they have had reactionary tendencies, but mostly because of the nature and characteristic of the regime, which supported the core countries, and the foriegn-oriented socioeconomic reforms, which led Iran into a peripheral capitalist formation. The participation of the major religious leaders in the early days of the Iranian constitutional revolution of 1906, the oil nationalization of the 19503 and the events of 1964 and the struggles of the "Mujaheddin Khalg's Organiza— tion" were cases in which they supported the popular move— ments to overthrow political systems which had not been able 2.9.2 to meet the people's needs. The recent Iranian uprising of 1978 was another such case. The people and the religious leaders successfully overturned a monarchic system which was dependent on foreign powers. The socioeconomic conditions of life, inflation, the gap between the rich and the poor, _and suppression of political organizations and political parties combined to produce popular resentment in concert with religious ideology that produced Islamic revolution. It is not, therefore, comprehensive to simply say that this revolution was "an upsurge of religious revivalism against materialism and corruption in high places" or "a re- jection by the common people of the socioeconomic benefits of modernization and Westernization" or "a spontaneous reaction by a democratic faith against tyranny and absolutism" or, finally, to attribute to, "the most prominent of its leaders, the Ayatollah Khomeini, almost supernatural, messianic powers" (Elwel-Sutton, 1979:392). All these factors contributed but might affect. They were not the key to the massive movement. The key was the socioeconomic conditions under wnich people lived which pushed them to take action against the system. In this situation any available method or instrument would have been tried. Religion was and is a profound ideological social institution which has often been at the forefront of social movements. It is not surprising that people of various social and cultural backgrounds accepted the leadership of 293 religiously-oriented movement against the unjust, oppressive and autocratic authorities in Iran. Religious ideology has frequently been one of the channels through which Iran's people found the fortitude to bear suppression and the stren- gth to rise up against it. The Bourgeois Movements The influence of Western type bourgeois ideology and the penetration of the colonialist countries and capitalist relations into Iran since the early nineteenth century crea- ted new socioeconomic relations among the Iranian people. The rise Of urban settlements against the monarchy and the critical social conditions of life in the middle of the nine- teenth century generated the protests which ended in the con- stitutional revolution of 1906. Although various groups with various ideologies parti- cipated in this revolution, it was characterized as a bour- geois revolution in which the merchants, craftsmen and urban dwellers had a significant role in a radical movement against a despotic monarchic system. It was also interpreted as a reaction to the penetration of Iran by capitalist countries with a colonial ideology, which prevented the rise of new independent bourgeoisie and paved the way for the emergence of dependent commercial bourgeoisie. From the constitutional revolution of 1906 until the early 19603 there were struggles 294 between the independent bourgeois sectors and the dependent bourgeoisie, that were aided by various socioeconomic groups that supported one or the other. Bourgeois-oriented movements over the past few decades, however, were mostly against the political system because this bourgeois was independent and locally oriented. That is why these movements opposed the dependent bourgeoisie, which was foreign-oriented and foreign-supported, and the dominant political system which supported the dependent bour- geoisie and was part of it. The independent bourgeoisie and its ideology had sur- vived in Iran with considerable evidence of vigor, even through conflicts, until it encountered the emergence of the depen- dent bourgeoisie. The dependent bourgeoisie because of its favored position did not allow the independent bourgeoisie to develop or even maintain its former strength. The consequence was conflict between these two. The history of Iran's political parties and their strug- gles is largely the ideological confrontation of the indepen- dent entreprenures and the dependent bourgeoisie. The last rise of the independent bourgeois movement came in the early fifties when the Mossadeg goverment came into power. This government took some serious action on foreign import—export activity and encouraged the development of independent 295 bourgeois activities. The nationalization of Iranian oil was one of the major actions taken by the leaders of Mossadeg's government. It was the Shah's regime, with its internal and exter— nal allies, that Overthrew the Mossadeg government in 1953, land restored the pro-Western Zahedi's government which was dependent on the core countries. After this the independent bourgeoisie began to decline, its members absorbed or co-opted by the dependent oriented bourgeoisie. The struggles of this socioeconomic group did not, however, disappear completely from the society. In any socioeconomic movement it stood against the dependent socioeconomic and political system. Bourgeois-oriented movements had their own ideology. Their capitalist structure was designed to allow internal craftsmen, factories, and merchants to grow and function in- dependently. It was against the domination of the core coun- tries and also the autocratic rule of the monarchic system which governed the society. The independent bourgeois ideo- logy defined the role of the king as a mandate to reign but not to govern. The middle class had supported this ideology and the bourgeois movements over the past decades but the de- pendent bourgeois domination and the radical movements arising because of the situation of the Iranian socioeconomic system caused support for this ideology to wane over recent decades. 296 Its elements remain within the socioeconomic system, how- ever, as do its supporters. The Socialist-Oriented Movements The origins of the socialist tendencies and movements in Iranian society date back to early history of Iran which the Mazdak movement in late Sasanid period (550's). But the more recent socialist-oriented movements in Iran which have had considerable political effects on socioeconomic movements originated in the late nineteenth century when Iranian poli- tical factions were getting organzied against the political system and the colonial capitalist countries. The socialist—oriented groups participated in the con- stitutional revolution of 1906, but could not greatly influ- ence the political system and sway the people. Although there were some socialist-oriented political organizations and publications in the post constitutional revolutions, it was in the late period of the Reza Shah's reign that the socialist-oriented ideology came to the fore. Groups with this orientation established their first political organiza- tion in the early 1940's, and called it the "Tudeh Communist Party". This party had an active role in the Second World War period, organizing several strikes and demonstrations which were comprised of workers and the lower middle classes. 297 Although some socialist-oriented governments were es- tablished in some parts of Iran over the past decades, namely in Azarbaijan in 1945 and in Kurdestan in 1945, and some socialist organizations and parties, the movement was not able to gain an organized socialist perspective with any realistic plan for socioeconomic and political success. Al- though the orientation has had some respectable leaders and strategies they have not been able to function effectively in the Iranian society where absolute royal power has not given people the right to participate in political decision- making. Other obstacles which prevented expansion of the socialist ideology among the lower classes, namely, the dom- ination of core capitalist interests in Iran. The gap between the political organizations which hold such ideology, and the people is the major problem in organizing successful socialist-oriented movements. The role and functions of socialist-oriented groups have been noticeable in recent political movements and revolu- tions in Iran. The participation of socialist partisans in the constitutional revolution of 1906, the nationalist move- ment of Gilan, Azarbaijan and Kurdestan have affected the Iranian socioeconomic and political situation. The armed struggles of socialist organizations since the late 1960's have showed others that the dominant politico-economic system was not all powerful. 28.8 ‘- The existence of the socialist—oriented ideology, organizations and political bodies in Iran was one of the major threats to the political system and its core allies. Most of the state revenues allocated to the army went to prepare the military for suppression of such ideology. It is little wonder that Iranian socialist movements and ideo- logy achieved minimal political identity and organization. Keddie mentions the role of the government and capitalist countries in suppressing socialist—oriented movements and ideology: The new American Ambassador to Iran, George V. Allen, was a major supporter of an Iranian anti-Communist policy. Since the withdrawal of Soviet troops the Russians had less influence in Iran than the United States, and only the TUdeh and its allies were effective in— struments of pro-Soviet policy. Soon after Allen's arrival, in November 1946, the Qavam government sent troops north to put it down very brutally. Some leaders fled, some hid, but others were excuted. In Kurdestan, the leaders were shot, and numerous jailings also occurred in both areas. The economic and social problems of Azarbaijan and Kurdestan grew after the re-establishment of central government control, and there was a severe famine in Azarbaijan in the winter of 1949. (1981:122). By the use of these tactics the central government over the past decades suppressed other political ideologies and organizations that threatened its rule. No competing politi- cal organization could organize itself openly and go to the people to make plans to meet their needs and ask for their 299 support. The result was political, social and economic domination by a corrupt foreign-oriented socioeconomic sys- tem which extracted the surplus from society for its internal and external allies. CHAPTER TWELVE CONCLUSION AND RECOMMENDATIONS SUMMARY Although the economic and military growth since 1962 has been significant and changed Iran's socioeconomic con— ditinos of life, it has failed in providing socioeconomic development to better the lives of Iranians because of its foreign-oriented development, peripheral capitalist forma- tion and repressive political system. For the Shah and his regime strong military power, anti-Communist and pro-Western tendencies and a high rate of economic growth were the means to maintain himself and his political system in favor with the Iranian people and his Western allies. The core capitalist countries, for their part, wanted the Shah's political system to stabilize Iran's internal sit- uation and the region, for their political and economic bene- fit. These allies did not concern themselves with how the Shah and his dominant ruling class maintained their power in Iran or the fate of the common people under his regime. The politics in Iran, were for the benefit of the in- ternal ruling class, the dominant dependent bourgeoisie, and 300 tr ur S! h ti 301 the multinational corporations of the core countries. This unholy trinity arose from the nature of the Iranian political system which was deeply rooted in characteristics of the socio- economic formations of the Iranian pre—capitalist and peri- pheral capitalist periods. Development of the dependent bourgeois in Iranian society over the last decades was the direct consequence of the historical processes of socioeconomic formation and the penetration of the world capitalist economy in search of mar— kets and raw materials. The domination of the dependent bour- geoisie as a ruling class, composed of the older ruling class from elite families and some newly emerged and foreign-allied wealthy families, was the result of developmental processes in recent decades which had pushed the Iranian society and its political system to alter ruling class composition through some reforms. In the early 19605 the Shah's regime reluct- antly accepted the leading core countries advice to modify the worst conditions of Iranian life with an apparently modern new program that did little to diminish exploitation, just obscurred it while the old fashioned polemics continued, temporarily out of sight. Isolating some strata of the ruling class, such as landowners and tribal Khans was the real intent of the re- forms which were carried out in Iran. The Shah and his po- litical minions, without truly involving. the people and get- ting their participation in socioeconomic decision-making and 302 planning, advanced the reform plans in several steps. The regime eased the way for isolated ruling groups to partici- pate in new economic plans and subtley co-opted them into a growing dependent bourgeoisie. Thus the new dependent bour- geoisie, with old content but new form, gained new power to dominate the economy and sped the society toward peripheral development. Two decades of successful peripheralization of the Iranian socioeconomic formation resulted in full dependence of the Iranian political, economic and cultural system on the world capitalist economy. Although the political system and its foreign allies succeeded with their main objectives, the regime could not save itself from the popular insurrections. It was, finally, a mass uprising of the Iranian people in 1978 which overturned the Shah's monarchic system in early 1979 and established the "Islamic Republic“. It had been obvious for some time that the regime would be overthrown, but no one had expected it to collapse so soon. International conditions made possible the Iranian's open opposition toward the regime with its suppression, its domin- ation, and its foreign allies. Saikal analyzes the failure of the Shah's reform program: 303 Iran achieved a capacity to strengthen its bargaining position in the conduct of its regional relations, winning friends and pursuing a resolute stand against what the Shah regarded as 'subversive/ Communist' forces. But the Shah's progress in strengthening and exerting Iran's position as the anti-Communist, pro-Western power in its region failed to transform Iran into a self-generating industrial and military power. His policies were not only unsuccessful in fulfilling their original objectives, but also caused serious tension within Iran and its region. This was largely because they were, on the one hand, over-ambitious in their objectives, poorly planned, badly coordinated, and mismanaged; and, on the other hand, they were based on a frail domestic political structure (1980:182). The reform program changed the Iranian social forma- tion through transition of the dominant mode of production from agriculture to peripheral capitalism. In the process, social relations changed drastically. New strata within the ruling class appropriated the socioeconomic organs of society and forced itself into power as the dominant class, the de- pendent bourgeoisie. With its relatively improved socioeconomic conditions Irans' government considered itself the leader of the Gulf area. This not only was supported by the ruling class but also by the core countries to keep the region, with its vast oil fields, secure from any kind of radical movement. The military expansion of the regime through sophisticated army gear brought from the U.S., France and England was an example 304 of its efforts to maintain the security of the flow of oil from the region toward the industries of the core countries and also secure foreign capital investments. Functioning as the policeman for the region, Iran, without any benefit for the Iranian people but only for the regions and foreign capitals, suppressed radical movement in Oman and participated in Somalia's war against Etupi. In this way the regime spent huge amounts of revenue on war material for its own security and in the interests of foreign allies. Because of the socioeconomic reforms, the regime had the opportunity to suppress all organized and non-organized oppos- ition. It proceeded through such undercover organizations as SAVAK and the secret police, extending a reign of fear and domination even into families. The people had food for sur- vival but few dared to participate in everyday social or poli- tical activities. Instead, they lived behind walls of silence afraid to ask about the ordinary realities of life, not daring to venture an opinion or comment, even in their homes. The Shah's reign had withing it,though, the seeds 0f its own destruction. He valued education and the resulting expan- sion of schools, high schools, universities, libraries and mass media that came about under his direction gave an oppor- tunity to some people to gain new ideas on polemics and con- ditions of life elsewhere among the nations, various social systems and ways of thinking. 305 Such knowledge fanned the resentment of oppressed Iranian people and they began to speak up, to protest, to struggle and even riot in the streets. The government was blind to the roots of these struggles and put out the brush fires caused by oppression with even more suppression, with army troops and secret police, and by excution and dispersion. The regime did not want organizations or individuals to participate in social and political activities. It wanted them to be "yes" men but not to question or verify the social realities. The Shah wanted popular support, or at least no dissention, but only on his own terms, without sharing any power or decision-making. Thus dissention and dissatisfaction con- tinued, as did oppression. The economic crisis of 1976 had a pround effect on de- pendent capitalism in Iran. Its consequences were a slow down of industry and a decline of capital investment in various Iranian economic sectors. By starting as a decline in invest- ments flowing into Iran, the diminished inflow continued to slow to the point at which it became a net out-flow as the dependent bourgeoisie transferred abroad their accumulated capital assets. The dependent state facilitated the drain on resources from Iran through a dependent and foreign-oriented banking system. What eventually remained from once enormous accumulated assets were some deserted and bankrupt building, factories and industries. 306 Suddenly the country faced failure after decades of growth and development in most of its economic sectors. The consequences of dependent development that any peripheral country will have to face had caught up with Iran because its dependent industry, technology, state machinery and economy rose and fell with the fortunes of the countries on which it depended. Iran was not excepted from this general rule. The worldwide market of leading world capitalist economies incorporated peripheral economies into its system, not on an equal basis on behalf of equal development, but often for extracting surplus value through the mechanisms of import and export of industry, technology and finance. CONCLUSIONS Although the fundamental bases of all societal move- ments and revolutions are rooted in socioeconomic factors, each society's radical movements are crystalized within some specific parameters. Iran's recent radical movements and changes are no exception. The major objectives of Iran's social movements and revolutions over the last century have been three primary goals: (1) equal opportunity to benefit from socioeconomic development; (2) nationalism; and, (3) popular participation in decision-making processes. Although the political organizations and the people who support them have emphasized some other aspects of the 307 most recent revolution, it was one or more of the above- mentioned goals which were the dominant motivation for the people who participate in it. The social objectives in the "socioeconomic" sense, in this context, represent aspirations to change the socioeconomic conditions of life. Local Iran- ian insurrections before the White Revolution of 1962 in rural areas and the nationalization of oil industries in 1952, and also the strikes and insurrection in urban areas, especially Tehran, before the Islamic Revolution of 1979 were examples of socioeconomic striving for radical changes. The nationalistic social movements emphasized the political aspects of dependence which have undermined the soverignity and independence of Iran. This includes in— ternal and foreign domination. Most of the radical movements in Iran in recent decades have had one or more of these ob- jectives. Khiabani's movement in Azarbiajan, the Jangal movement in Gilan, and the Coup de ta of 1921 by Reza Khan are three examples of such movements. Participation in decision-making processes requires the people's involvement in their own destinies. The existence of a despotic autocracy in Iran over the past centuries has prevented popular freedom and participation in socioeconomic decision-making processes. The constitutional revolution of 1906 and the people's uprising in 1978 resulted from such repression. 308 The religious thread running through Iran's radical movements has a long history. Most of the movements in Iran against internal despots and external invaders have had religious overtones. The recent decades have witnessed such movements as Babis, the religious uprising of 1963 against the White Revolution, and the Islamic Revolution of 1979. The struggles against socioeconomic inequality, inter- nal or external dependence, despotism and cultural deprada- tions (religious) have had a long history in Iranian society. Each struggle has been carried out by its own organizations and supporters but the fundamental goal of all of them was improvement of socioeconomic conditions of life in Iran, with a specific emphasis on particular aspects of social life. RECOMMENDATIONS There exists no single country which does not have a relationship with other countries. The developments of com- munication, mass media, technology and the increasing ex- pectations of all classes necessitate interrelationships with each other. This interdependence between societies supplies human needs through societal, scientific and economic ex- changes for further progress and development. These exchanges make it possible to overcome the poverty, starvation and any discrimination and exploitation within and between human societies. 309 The major disputes and dilemmas emerge when such interdependence becomes drastically out of balance result- ing in exchange and, consequently, unequal development. To search out the roots and causes of such a phenomenon, one must look at the mechanisms and nature of the capital- ist mode of production. Capitalism functions wherever it finds profit. Profit arises from surplus value and results in capital accumulation. Surplus is created from human labor. Capitalism, therefore, needs to extract surplus to obtain capital accumulation and invest it in available mar- kets; both internal and external. With this process for development and expansion, it is in the nature of capital- ism to create inequality within and between groups of people. Thus, development and underdevelopment are two sides of the capitalist coin. The flow of capitalism from a core capitalistic coun- try into a country which has different modes of production results in a rejection of capitalism or changing such a country to meet capitalist needs and ends. The pre-capitalist period in Iran is one example of a society which did not reject capitalism. Qualifications which determine the method of penetration into this country depend on the nature of the guest capitalists and the extant phase of capitalism. In any case, the consequences will be the establishment of an 310 unequal relationship between the core capitalist country and the other country; the process will end in the peri- pherization of the economic sectors of the host country because core capitalist policy will heavily influence the decisions and planning of the host country. From the view- point of capital circulation, this means favorable economic planning is more profitable for capital than for the host country. In any relationship between core and peripheral countries, the outcome tends to favor the stronger, or core, country. Conflicts emerge in the host society when established modes of production are confronted with the new capitalist mode of production and competition for essential markets, raw materials, labor and political influence arises. To resolve such conflicts guest capitalists may seek allies within the host country. Depending on the nature of the country, state officials, merchants, landholders, or tribal leaders may be potential capitalist allies. What invariably evolves is either a societal rejection of capitalism or a new social formation with capitalist relations. Such forma- tion prepares the groundwork for future development of the economy of the host society: dependent develOpment with a coalition formed between the capitalist country and its internal allies to seek out and profit from surplus. The state machinery secures the capital by getting its share of the obtained surplus and the support of the core countries. 311 A dependent bourgeoisie is formed from the internal allies of capitalism who pave the way for capital penetration throughout the society using the mechanisms which then gov- ern the host society. Independent socioeconomic development for a given de- pendent and peripheral social formation in the world capit- alist economy is an utopian impossibility. It is impossible to have a trace of independent capitalist development within such a closed world system. Divisions of labor among the core and periphery countries worldwide have been attained after several wars. The achievements that the core countries have attained over the past centuries, structurally and his- torically, belong to these countries. They can be maintained only by continuing core-periphery relations. Capitalist de- velopment is inherently uneven development and unequal ex- change. The peripherization of some human societies is a natural consequence of the historical development of capit- alism and can be eliminated only for rejecting the dependent capitalist mode of social formation. There are two ways for currently peripheral countries to achieve socioeconomic independence. First is an unex- pected event which will end in the collapse of the world capitalist economy. Such an event might provide ways for peripheral countries to release themselves from the socio- economic and politico-cultural domination of the core countries. 312 The only other way would be for the peripheral countries to reduce and withdraw from relations with the capitalist countries. This would require considerable committment and a long period of struggle for the peOple of the country. It is a difficult approach because of the socioeconomic de- pendence of these peripheral countries on core countries. For example, one of the main elements of such an approach would be an independent, democratic government and political system. Such a government with a socialist orientation would be a way these countries could cut down their relations with capitalist formations and release themselves fromeuadomina- tion of core capitalist relations. To approach such a long term goal, Iran would need some developmental changes in order to maximize the potential of its strategic geographical location and raw material re- sources. These changes and their relationship to Iranian historical development and the nature of world capitalist penetration form the discussion for the final pages of this dissertation. Indigenous economic development and infrastructural changes for the improvement of Iranian socioeconomic life could be achieved only by complete termination of the present peripheral mode of production. Hypothetically this would be possible through establishing new independent foreign re— lations and instituting new socioeconomic relations among 313 the Iranian people, giving them equal access to the coun- try's resources for their individual and social needs, and letting all the people participate in social and economic decision-making. The reason why democracy in Iran would have priority over other important aspects is the specific historical de— velopment of Iranian society. It is also the only way in which progressive socioeconomic groups can succeed in pre- paring the way for a conscious organizing of the people against internal and external obstacles and domination. Political organizations and parties will mature through be- coming involved in social issues and people from various econ- omic backgrounds will be able to evolve an ideology to fit the societal realities. With a concrete ideology, each social class will understand its class interests and role in an independent socioeconomic development process. The classes will elect their own agents, then, for political and socioeconomic responsibilities. In this situation, the society can implement real development and the efforts of government and other institutions would be intended to promote improve- ment in the people's social and individual lives. The fundamental question raised here is: how can the Iranian society achieve such a condition, considering its historical background and existence of the world capitalist economy? It is not an easy question. The general perspective 314 is that the people must handle their own socioeconomic and political affairs in order to preserve their own interests. The peOple are the essential element in this process. They would have to be aware and fully understand the social and individual ramifications of any issue, the international situation and the concrete societal realities. Thus, they would be able to elect their government and participate fully in the socioeconomic and political affairs of their country. Still, there exist various dilemmas here. A demo- cratic government in any given society requires the peOple's participation in the entire gamut of socioeconomic activities. Decisions must be made as to how this is to be achieved. In the conflict tradition, we should pay attention to productive forces and relations to realize the social con- ditions of life and forces for socioeconomic activities. Through this process, we will be able to examine the capacity of the social groups to achieve their own socioeconomic de- mands. Generally, this perspective is valid. It has been a guide for this study. But, in concrete analysis atten- tion must be paid to the social realities. In the context of Iranian society, there were some fundamental issues which prevented the functions of material bases, productive forces and relations and goals from achieving their ends. At the time, it was not the modes of production which blocked pop- ular participation and democracy in the society but super- structural phenomona. That is, the productive forces and 3l5 relations were blocked by other obstacles. Therefore, concrete analysis requires consideration of specific con- ditions of the issues which have prevented an independent developmental process. As considered in the theoretical analysis in Chapter One, each society comprises productive forces, productive relations, and super-structural phenomena. Modes of pro- duction, consisting of productive forces and relations, are the material bases of the society. The superstructure, consisting of social beliefs, norms and behaviors, pave the way for accepting production relations, such as class re- lation. In Iran the productive forces and relations had the potential for independent, democratic development but the superstructure presented overwhelming obstacles. What needs to be done is to develop social, political, cultural and economic awareness among the population to establish an ideology that will not prevent independent development. Through this the social groups would be able to participate, seriously, in their socioeconomic activities to secure their individual and collective interests against the interests of foreign-oriented development and foreign capital. Based on the develOpment of productive forces and re- lations, progressive political organizations would need to utilize their energies and potential in educating the peOple toward social awareness and understanding the concrete 316 realities of their society. This process would help the people evolve an ideology consistent with their own social realities and prepare to order their own destinies by par- ticipating in the popular decision—making of a socioeconomic democracy. The material base of a new Iranian socioeconomic sys- tem is in place. Through reducing and alleviating the super- structural obstacles, each ethnic group would be able to exercise its own economic, social, cultural rights to improve its quality of life without facing insurmountable economic gaps between those who have and those who have not. The gov- ernment, as the representative of all the groups, would sup- port and facilitate socialist-oriented planning, allowing the society an independent political and economic system that will resist future dependence and peripheral development. The main efforts to create this situation would have to be focused on the following areas to create the conditions for achieving the above goals. A. External — Elimination of socioeconomic dependency, which requires these major steps: (1) breaking down core-periphery relations to throw off any kind of domination by foreign capital and its internal allies, the dependent bourgeoisie. (2) nationalization of all foreign resources. 317 (3) planning to change foreign-oriented dependent capitalist relations within the society. B. Internal - Attention to the internal conditions of life: the socioeconomic and politico-cultural institutions and their functions. ial and economic relations, and without an organized poli- tical ideology, such attempts will be impossible to elimi- nate the external and internal economic and socio-cultural domination. Thus the following steps are needed: (a) (b) (c) (d) (e) (f) (g) nationalization of all natural resources participation of the people in all societal acti- vities elimination of any kind of discrimination such as: national, economic, cultural, and political. democratization of state machinery. leading the political organization toward such organized and ideological institutions through the understanding the social and cultural realities. giving the people real knowledge of their socio- economic and cultural conditions to achieve inde- pendent opinions for sicla and individual decision making. giving opportunity to intellectuals to participate actively in the whole transitional period and lead the technology and bureaucracy sectors in the ser- vice of the entire society.20 Without fundamental change in internal soc- ENDNOTES ENDNOTES SELECTED REFERENCES l. The following sources present the major assumptions, statements and paradigms of the modernization/development perspective. Danial Lerner, the passing of traditional society, Glencoe, Ill.: 1958. The Free Press. Marian Levy J. Jr., Modernization and the Structure of Societies, 1966, vol. I and II. Princeton: Princeton Univ. Press. Szymon, Chodak. Societal_pgxelgpment, New York: Oxford University Press, 1973. Barrengton, Moore, Jr. (1967) The Social Origin of Dictator- ship and Democracy: Lord and Peasant in the Making of Modern World. Boston: Beacon Press. David.CL McClelland. (1961) The Achieving Society, Princeton: N.J.: Van Nostrand. Walt, Rostow W (1952) The Process of Economic Growth. New York: W.W. Norton. Norman Jacombs (1971) Modernization Without Development. New York: Praeger Publication. Alex Inkeles and Smith, David H.(l974) Becoming Modern, Individual Change in Six Developing Countries. 2. Some major books in this case which can be cited here are: Andre Gunder, Frank, Capitalism and Underdevelopment in Latin America. 1967. New York: Monthly Review Press. Samir Amin. 1976, Unequal Development, An Essay on the Social Formation of Peripheral Capitalism, New York: Monthly Review Press. 318 319 Immanual, Wallerstein, 1974, The Modern World-System. New York: Academic Press. Paul Sweezy, 1977. The Political Economy of Growth, New York Monthly Review Press. Paul Baran and P.M. Sweezy, 1966. Monopoly Capital: An Essay on the American Economic and Social Order. New York: Monthly Review Press. 3. Some famous sources of modernist studies on Iranian society: James, A. Bill. The politics of Iran: Groups, classes and modernization, 1972. Columbus, Ohio: Merill. Marvin Zonis 1971. The Political Elites of Iran. Princeton: N.J. Princeton University Press. Nikki R. Keddie, 1981. Roots of Revolution: An Interpre- tive History of Iran. New York: The Rail Ballou Press. 4. The selected sources of the Marxist studies in this field are: Bizan Jazani, 1973. The Socio-economic analysis of a dependent capitalist state, trans. and pub. by the Iran Committee, An introduction to the contemporary history of Iran. trans. and pub. by the Iran Committee n.d. 5. The following are some more sources in this field: Samir, Amin. Unequal development, Monthly Review Press. Immanual Wallerstein, 1974. The Modern_World Systel:_Capital- ist Agriculture and the Origins of the European Work Economy in the Sixteenth Century. Academic Press. A.G. Frank, 1969. Latin America: UnderdevelOpment or Re- volution. Monthly Review Press. 6. Various historians and social scientists from ancient times to the present have mentioned differences between orien- tal and occidental societies. Some fundamental differences exist between these two in socio-economic development and in their political and cultural situations. The reason why these differences have been noted in this thesis is that, however, interpreted, oriental societies have their own specific history of socio-economic development and their own socio-economic formation which were different from those of the West. Because 320 of this Western social scientists have called oriental for— mations "Asiatic Social formations". Although there has been criticism of this kind of interpre- tation, it still provides a useful basis, as a model for analysis of these societies, and its application is both ap— propriate and useful in this case. The following is some literature in this field: Perry, Anderson (1974) Lineages of the Absolutist State. London: New Left Books. Karl Marx Pre—Capitalist Economic Formation. , (1857) The Anglo-Persian War. New York Daily Tribune February 14. Karl A. Withfagal, 1957. Oriental Despotism, New Haven, and London: Yale University Press. George Lichtheim, "The Concept of Ideology and Other Essays" Ervand, Abrahamian, 1974. “Oriental Despotism: The Case of Gajar Iran" International Journal of Middle East Studies. vol. 5, p: 3-31. 7. In this case see the following sources: Ervand Abrahamian, 1975, "European Feudalism and Middle Eastern Despotism", Science and Society, vol. xxxx, summer, Katouzian, H., 1981, Political Economy of Iran, 1926-1979. London: MacMilan. Ahmad Ashraf, 1969, "On Economic DevelOpment and Historical Specificity" Iranian Studies, vol. 2, no. 4, pp. 189-92. 8. For more basis literature in this field refer to the sources mentioned in no. 2. 9. The following sources give the readers some spec— ific idea on the history of Iran. Edward G. Browne, 1910. The Persian Revolution of 1905-1909, London: The University Press. Leonard Binder, 1962, Iran: Political Development in a Changing Society, Berkely and Los Angeles:University of California. 321 R.N. Frye, Persia, 1968, London: Allen & Unwin. Lucien Rey, 1962 "Persia in Perspective"..New Left Review, nos. 19 and 20. 10. For further study of the socioeconomic history of Iran see the following sources: Nikki R. Keddie, 1971. "The Iranian power structure and social change 1800-1969: An Overview" International Journal of Middle East Studies, vol. 2, no. 1, pp.3—20. Ann, K.S. Lampton, 1957. "The Impact of the West on Persia" International Affairs, vol. 33, no. 1, pp. 12-25. Charles Issawi, 1971, Economic History of Iran 1800-1914. Chicago Univ. Press. Joanna de Groot, 1979. "Iran: What past? what future?" Marxist Today. April pp. 102-109. Lucien Rey, "Iran in Perspective" New Left Review, no. 23. 11. See the following sources: Ann, K.S. Lampton, Landlord and Peasant in Persia, 1963, no. 19 and 20. Charles Issawi Economic History of Iran...PP.24S-246, 209. Nikki R. Keddie, "Historical Obstacles to Agrerian change in Iran." 12. Rouhollah K. Ramazani, 1974. "Iran's White Re- volution: A Study in Political Development."w International Journal of Middle East Studies, vol. 5, pp. 124-139. Amin Saikal, 1980, The Rise and Fall of the Shah, New Jersey: Princeton University Press. Christopher Rand. 1975. Making Democracy Safe for Oil. Boston: Atlantic-Little-Brown. Kermit Roosevelt, 1979. Countercoup, the Struggle for Con- trol of Iran. New York: McGraw-Hill. 13. Although throughout this work the relations between core capitalist countries and Iran has been analyzed, it is emphasized that the goal of this study is to trace the nature of the relations of the core capitalist countries with Iran but not the socialist countries such as Russia. It needs further study in this field to see the relations of social- ist countries with peripheral countries. 322 14. In this case see the following sources: Michael E. Bonine and Nikki R. Keddie, 1981. Modern Iran, The Dialectics of Continuity and Change. Albany: State University of New York Press. Peter Avery, 1972. "The Many Faces of Iran's Foreign Policy" New Middle East (London) No. 47 August pp. 17-19. Amin, Banani, 1961. The Modernization of Iran, 1921-1941. Stanford: Stanford University Press. Julian Bharier, 1971. Economic Development in Iran, 1900- 1970, London: Oxford University Press. 15. The following sources are some in the case. Hamid Safari 1359. Enhesarhaye beinalmelali Dar Iran: the Tudeh Party Press. Zamamdarye Carter, Siasate Jadide Imperialism va bazlabe an Dar Iran 1358 sazaman mojahedine khalge Iran, Tehran Shahram Chubin and Sepehr Zabih 1974. The Foreign Relations of Iran, A Developing State in a Zone of Great-Power Con— flict, Los Angeles: University of Cal. Press. Rouhollah K. Ramazani, 1975. Iran's Foreign Policy 1941-1973: A Study of foreign policy in Modernizing Nations. Charlottes- ville, University of Virginia. Michael Ledeen & William Lewis Debacle the American Failure in Iran. New York: Alfred A. Knoft. U.S. Congress House Subcommittee on Europe and the Middle East U.S. Policy Toward Iran, Washington, U.S. Government Printing Office. 16. Refer to these sources: Leonard Helfgott, 1976 "Iran Capitalist Formation in the Periphery" The Review of Iranian Political Economy and History, vol. 1, no. 1, pp:2—25. James A. Bill, 1970. "The Modernization and Reform From Above: The Case of Iran" The Journal of Politics. vol. 32, no. 1, February. Mehrain, Fattameh, 1979. "Emergence of Capitalist Authori- tarians States in Periphery Formations: A Case Study of Iran" Ph.D. Thesis, The University of Wisconsin, Madison. 323 17. See the following sources: Joanna de Groot, 1978, "Empty Elites or the Perils of Poli- tical Science" Review of Middle East Studies, no.3. Marwin Zonis. 1971. The Political Elites of Iran. Prince— ton, N.J.: Princeton University Press. Hamad Ashraf, 1971. Iran: Imperialism, Class and Moderniza- tion from Above. Unpublished Ph.D. Thesis, New School for Social Research. 18. For more information see these sources: Michael E. Bonine and Nikki R. Keddie, eds. 1981, Modern Iran: The Dialectics of Continuity and Change. Albany: State Uni- versity of New York Press. Amin, Saikal, 1980. The Rise and Fall of the Shah, N.J.: Princeton University Press. U.S. Congress, House, 1979. Subcommittee on Europe and the Middle East, U.S. Policy Toward Iran. Jan. 1979. Washington, U.S. Gov't Printing Office. U.S. Congress, House, 1977. Report of Staff Survey Mission to Ethiopia, Iran and the Arabian Peninsula, United States Arms Polities in the Persian Gulf and Red Sea Areas: Past, Present and Future. Washington, U.S. Gov't Printing Office. 19. The following are some of the sources in this case: International Bank for Reconstruction and Development. 1967. The World Bank Group in Iran. Washington, D.C. International Bank for Reconstruction and DevelOpment, 1970. Industrialization of Iran: The Record, the Problems, and the Prospects. Washington, D.C., May. Iran Buys More Military Equipment New York Times, 1974, 11 June, sec. 6,p.4. "Iran to get Better Helic0pters than U.S. Army" 1973. Armed Forces Journal, Feb. 20. See the following sources: Zabih, Sepehr, 1966. The Communist Movement in Iran, Los Angeles: University of California Press. 324 Nikki R. Keddie, The Roots of Revolution. Bizan Jazani, 1980. Capitalism and Revolution. London: 2nd Press. Homa Katouzian, The Political Economy of Iran. Robert J. Pranger, 1959. "Currents in Iranian Nationalism" Current History.- 37, Feb. pp. 102-106. APPENDICES APPENDIX A MAPS OF IRAN .,_ «A '. \ \ > . . ' (jun ‘ «3 at": . -. .. V m... ' ~ w . i ‘. _. - -' ‘ V ‘ 7.. ' ‘ , .. .913}? . 4." “’0‘" -- . . --'-. z,- .- . - o v _ r. 1 ' .' I I ”h ' \_’\ ‘ ‘ '- y ’ . , R. ‘9 ’ ' . , -u- . ' “."" \fl ’ ’ 4 . fi'. '- 3E}: Gull '0! cm}. . 4-'-=-'.'.;:z_‘.;.'; .9 32 'U.S.S.R. U.S.S.R. A Load A lam. A Lmul 1m 0 COpp-rl 0 Nulummy o Manv ans-..- 0 n U Maku Khny . - Mamm 0 Caspian Sea Turkey ' Ah." 1.1km! - Mlmmh . Mutual-ad "SH?" - A/-Il|.|.u|0m o 0. Shaun?!) u Salon-v." o "m.m-so ”...-v». 0 o O m . “MW". ... ”I..._9L.'_'" M . Irmumn ' ad'mmm‘ ' O O Tmlml-v Ho-yclmlyvrl, o o 0“,... Shim! Hmuudan TEHRAN - ' ' ' ' , 00m , . . A k 0 A “m.m...“ K-‘rmansmah m. o K AD , .lshnn A Khmmm Ahuzi . m 0 o Ammrm O "3‘: . A O "tum“! AfghaniSlan 1"" A-Fshhmn . Mm O A Y.'(C‘ I] A A Khomnmshaht fl Abadan O ' [We 0 ° hrnlmn O ’ o . Shit.) . 0 lo’lhD-l'l" ' ./ .MO‘JH ' m , ,, m, Pakistan D a C r---- . . ..- _..____ Legend It'd" HJH'L': o'ulvhd'o a ' 3'.HI'JI.‘IN' Cluomltc ' Mum!» . Coal Sultuc ..- Pcrslan Gull "an!" Chmmnhm a! Ila-quota: Gulf of Oman W wmoco (MOCIENIIWINMW) OIL AND GAS IN IRAN 7 Oil Service Conway 0! Iran Um Causation am) 1 ‘¢' a v' a mac (macadamia-Gum) 5151'." KERHANSHAH ; : upco (MC/Neo/uiondWIW/Sm) . . WW... .2, :m zmm'mwmwwmm 9 A“ 7‘ + an 9 ~ ii / - §+ 0 Wk: «lac/Pam I 99+‘( "‘3 1 sum (woo/Em) ) y/ \\/./’ 6“ XISPHANAN I SOFIRM (NIOC/Eu-ERAP/Wm) ’f/{fi I// ,9” I PHIURAN (moo/Pam) %‘/ /v.° + to EGOCO (NOC/EIO-ERAPIENl/HWIPOWMIOMV) \/\\ 9‘ ’9, 1' u HOPECO Mac/Maul) ~ ".0149" + :2 mm co (NKXJMnInd/Lnuwa'wmlmo) i, ' u NIOC ‘ oaCn AHWAZ ll‘sfi. “y/fif’ Q) + u . Wham ) ‘ 9’ . q u . m r/ c ”gt/fi‘+£f I! AGIP . KHURRAHSHAHR «f. .o’y". 'r + “ ”M“, P” mm" ABADAN " i .; rm won a , .{r‘ ,' \\ \ I .\ I l I ' a O 4:.” so .’ . .. ' f "<1 ' ABMS LEGEND O vulva W 009mb!“ a. OILFIELD “u I; G ‘ \\ ' 1 '\ o: ' ‘\ m «snap o /; I \ xr ‘ \\:‘.'\. ,—\ ¢ GASWELL \ // I . \ -’ x..-.:‘::;: \ +++ GAS mma [ / \ , !_~ / \ -- - moses: GAS PIPELINE ‘ 133/I“ " - --- j \\ —— on. meme -.-..:.-.\ The Petroleum Economist June 1975 APPENDIX B GRAPHS 328 l = 100 million dollars 60 .. 55 1r 50 ‘r 45 t. 40 0 35 «~ 30 25 o 20 J} 15 (I. 10 1P g A 1 l v v V v 1955 1960 1965 1970 1975 YEARS GRAPH l: The Increase of Imports of Goods To Iran Over the Past Two Decades SOURCE: Based on various tables presented in the dissertation. 329 35 o ' 1 100 million dollars 30 0 25 ¢ 20 10 l 5 J A A A A A 1955 1960 1965 1970 1975 YEARS GRAPH 2: Iran's Decreasing Non-Oil Exports, 1955-1980. SOURCE: Based on tables presented in the dissertation. 330 8 l = 100 million dollars A L 19§b 19%; 19i4 1976 1978 0 GRAPH 3: Rate Of Invest In Iran's Defense Budget SOURCE: Based on tables presented in the dissertation. 331 l = 100 million dollars 14 .l 10 " A A l J 1 A 1950 1955 1960 1965 1970 1975 GRAPH 4: Iran's Oil Revenue Increases SOURCE: Based on tables presented in the dissertation. BIBLIOGRAPHY Abrahamian,Emrand (1969) "The Crowd in the Persian Revolu- tion". Iranian Studies, Vol. II, No. 4, pp. 128-50. (1974), "Oriental Despotism: The Case of Qajai Iran.” International Journal of Middle East Studies, 5, pp. 3-31. (1975), "European Feudalism and Middle Eastern Despot- ism." Science and Society, vol. xxxx, Summer. (1978), "The Political Challenge," MERIP Report, No. 69. (1978), "Factionatism in Iran: Political Groups in the 14th Parliament (1914-46)," Middle East Studies, vol. 14, no. 1, January 1978. 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