Iran’s Islamic Socialism. By: Marius Trotter

​The recent (apparently) accidental death of Iranian President Ebrahim Raisi in a helicopter crash, along with Iran’s prolific foreign minister Hossein Amir-Abdollahian, has prompted much speculation and discussion about what changes in Iran’s political power arrangement may occur. How will this affect the nation of Iran itself? What are the prospects of the Resistance Axis against Zionism that Iran leads? As is often the case, the discussion in both the mainstream media and even many progressive/left media traffic in cliches and superficiality, even going so far to make Chicken Little proclamations that the Islamic Republic will imminently fall due to the death of some of its leadership. This mistakes the true pillars of power in the Islamic Republic of Iran to be individual clerics and politicians (rather than the foundational institutions these leaders stand on).

In the following essay I intend to make the argument that Iran’s system has a deeply grassroots character built on mass working class support, which makes its political system extremely difficult to dislodge- despite the best efforts of the US Pentagon and the CIA, the Zionist entity, the Gulf monarchies and their Wahabbi/Salafi proxies. It can be argued that Iran is not only anti-imperialist, but socialist, a rare model of Islamic socialism that has not existed elsewhere since Libya’s model of Islamic socialism was destroyed in 2011.

How Iran’s unique economy developed

First, some historical context is necessary. In its 2,500 years of history, Iran/Persia has never had an economy that could be considered a free market. The state has always played a dominant role. From the ancient Persian Empire onwards a powerful, centralized monarchy ran what could be considered a ‘palace economy’ whereby the great bulk of resources went to the king and his officials, who redistributed resources as they saw fit. In essence, the palace planned the economy (this system also existed in ancient Egypt, Babylonia and China).

This system had a nobility, but they never had the same power or status that the feudal nobility possessed in medieval Europe. The Persian emperor was so vastly wealthier than all the nobles put together that they were completely subordinate to him. The emperor was also obligated to protect the serfs from the worst abuses of the nobles, and “Debt Jubilees”, in which the emperor canceled the debts of peasants to their lords, were a tradition.

Iran/Persia got its first exposure to the global capitalist system with the rise of the petroleum economy. Oil was discovered by British speculators in Abadan in 1901, and 13 years later British capitalists acquired effective control over all major oil production in Iran, a monopoly they held for 37 years via the Anglo Iranian Oil Company. For 2/3rds of a century Iran’s oil production was dominated by foreign imperialists: first the British until the 1950’s and later the US from the 1950’s until the 1979 revolution. As bad as this exploitation was, it was largely confined to this one industry. Since petroleum was fairly disconnected from the rest of Iran’s economy, foreign exploitation of that commodity did not have the same debilitating and deforming effect on the countries overall economic development that, for example, the British cotton industry had in Egypt and India, which meddled deeply in those countries' food production. Iran was never formally colonized, meaning it kept much of its traditional economic structure and social cohesion intact.

The Pahlavi Ancient regime

The Shah Reza Pahlavi, Iran’s last monarch who reigned from 1941 to 1979, was a brutal US backed autocrat. Nonetheless, some of his policies unwittingly set the stage for Iran’s revolutionary economic system today. Desiring to turn Iran into a great modern power, the Shah enacted a series of reforms between 1963 and 78 that radically altered Iranian society, known as the “White Revolution” (white being the color of the monarchy). These included major land reforms in the countryside, where the rural estates of big landowners were broken up and redistributed as small plots to the peasantry. This completely upended the rural feudal order. The Shah did this not out of benevolence to the peasants but to break the power of the traditional landed nobility, who he compensated by granting them ownership of businesses in the major cities.

The Shah also reinvested some of Iran’s massive oil revenues into the country's manufacturing base outside the oil sector, kick starting an industrial revolution in the country. He imposed trade barriers and tariffs to keep out foreign competitors and protect local Iranian industrial capitalists. Paved roads and railways connecting the major Iranian cities were built for the first time. Urbanization accelerated and the modern working class exploded in numbers (the urban population went from 7.2 million in 1960 to 18.2 million in 1979, which was 33% to 50% of the total population in two decades). Iran produced virtually no steel in 1960, by 1977 it was producing as much steel as Britain.

But the fruits of this modernization and development in the 1960’s-70’s did not reach the overwhelming majority of Iranians, and this is what doomed the monarchy. In 1973 85% of all private industry in Iran was owned by only 45 families. The Iranian capitalist class was tiny and completely dependent on the Shah for contracts and favors- the Shah preferred it this way, as he wanted to be sure no one amongst the Iranian bourgeoisie became potential rivals. Thus, the Iranian capitalists had no political independence from the monarchy.

Iran’s middle class was somewhat larger, about 5% of the population, or around 2 million out of 40 million people total. Many were culturally liberal and adopted Western fashions and trends. But 95% of the Iranian people remained deeply exploited, impoverished and highly religious workers, farmers, artisans and small shopkeepers. They grew to resent the monarchy’s rampant corruption, the neglect of the urban and rural poor, the Shah’s alliance with Western imperialist powers and disrespect for traditional religious and social norms.

The Shah, obsessed with centralizing power around himself, had systematically weakened and reduced the size of two classes which had a vested interest in defending his regime, the landed nobility and the urban bourgeoisie. He also alienated much of the middle class with his refusal to make liberal political reforms and his personalized, autocratic rule. He wound up with millions of enemies and only a handful of allies.

These tensions came to a boiling point in 1978-79, when the working-class majority, in alliance with nationalist minded petit bourgeois and Islamic clergy, rose up in their millions against the monarchy.

Thus, the revolution in Iran quite swiftly destroyed the political power of the Iranian bourgeoisie, who were expropriated or fled the country when the monarchy collapsed. In 1979 state power passed from the hands of the monarchy which ruled in the interests of a handful of capitalists and aristocrats to a vanguard of Islamic clergy whose base of mass support rested on the impoverished working class/peasant majority. The centrally planned economy which was already in place was redirected in service of the Iranian people and nation as a whole instead of a small elite.

What is important to recognize is that while the Islamists, liberals and Marxists who took part in the revolution against the Shah had different ideas regarding what path Iran would take following the deposing of the monarchy, there was significant cross pollination in terms of their ideas. Shia populism, representing a dissident strand of Islam that had often been at odds with the wealthy and the powerful in the Muslim world over the centuries, had common ground with many aspects of socialist thought.

A notable example of this was the political and religious development of Mahmoud Taleghani, a leading intellectual influence on the Iranian Islamic Revolution and a lieutenant of the Ayatollah Khomeini. Taleghani was imprisoned alongside Iranian Marxists under the Shah and frequently engaged in debates and discussions with them. While rejecting Marxism on the grounds that he found historical materialism incompatible with Islamic faith, he took their arguments seriously and socialism heavily influenced his ideas. In Taleghani’s famous book “Islam and Ownership” he argued in favor of collective ownership of natural resources in the national interest, saying this was in line with Quranic teachings. Taleghani was even called ‘the Red Mullah’ for this reason.

In the economic policies implemented by the leadership of the Islamic Revolution since 1979, conceptions of social justice, the uplifting of the poor and an opposition to usurious financial speculation at odds with healthy national development have helped shape Iran’s economic institutions.

How do these state institutions of Islamic socialism operate in Iran? Let’s examine them in turn.

1. The Bonyads

One aspect of Iran’s post 1979 economy which is very non capitalist is known as the Bonyads. These are Islamic charity organizations, essentially run as cooperatives, which are responsible for providing social services and welfare to Iran’s working classes. They are usually administered by religious clergy. Although they receive state funds and subsidies, they are not directly state run and make the day-to-day decisions as to how funds are allocated and spent. Eighty percent of Bonyads are estimated to run at a loss yet continue receiving state subsidies because their function is social, not profit driven. Twenty to thirty percent of Iran’s entire economy consists of these Bonyad enterprises. One of the more famous Bonyads, the Mostazafan Foundation of Islamic Revolution, is the single largest holding company in the entire Middle East. It consists of the Shah’s expropriated personal properties.

The Bonyads employ up to five million Iranians, causing Western business outlets and pro neoliberal Iranian opposition groups to complain that these organizations are ‘overstaffed’, bloated and inefficient. In a capitalist framework, having large institutions devoted to reducing unemployment as an end in itself makes no sense, but under the religious and economic justice priorities of the Bonyads it makes perfect sense. In Islam “zakat”, or charity is one of the Five Pillars of Faith for any true believer. Iran is unique in that it took a practice that was normally the prerogative of individuals to carry it out and made it a central duty of the state to subsidize and promote.

2. The Basij

This is another component of Iran’s revolutionary system and how the government is connected with the working masses. The Basij is often incorrectly described as only a pro government militia. Although that is one of its functions, it doesn’t come close to describing the actual picture.

The Basij were first created during Iran’s 1980-88 war with Iraq, where local councils were set up on a community, village and neighborhood level to defend the Islamic Revolution from foreign invasion and internal counterrevolution. When the war ended in 1988, the Basij took on many other functions besides military, community service, education, health clinics, infrastructure construction/repair, and disaster relief. Their mandate is to serve the Iranian masses. Joining is voluntary, and the only requirement for joining is that you agree with the principles of the Iranian Islamic Revolution.

Today the Basij councils have 17 million members. Each council has a “base” at a neighborhood or village level. Approximately 60-80,000 of these bases exist nationwide, with as few as ten people or as many as 100+ assigned to each base. Their recruits are overwhelmingly drawn from the working class and the poor. Half the Basij are youth, and one third are women. Basij are not only Muslims- there are also Christian, Jewish and Zoroastrian Basij as well.

A required part of becoming a member of the Basij is ideological, religious and political education. Members are expected to take classes in the Quran, studying the works of key thinkers of the Iranian Revolution (for example, Ayatollah Khomeini, Morteza Motahhari, Ali Shariati, Mahmoud Taleghani), the struggle in Palestine, ethical codes of conduct, and other subjects. The Basij are under the direct command of the Supreme Leader of Iran and answer to no one else.

One of the appeals of the Basij is access to higher education, 40% of undergraduate university positions and 20% of graduate school positions are reserved for Basij members, making it attractive for working class people to join.

When you look beyond the ideology espoused, the structure and function of the Basij is almost identical to that of the Communist Party apparatus that existed in the USSR and which still exists in China, Cuba, Vietnam and the DPRK today. The Supreme Leader of Iran, the Guardian Council and the religious clergy in the holy city of Qom function as the politburo/party vanguard, while the Basij councils are the equivalent of the soviets in Russia or the Committees for the Defense of the Revolution in Cuba, which keep the leadership rooted in the working masses. Whether the ideology is Marxism Leninism or Shia populism/Islamic socialism, the institutions themselves are very similar.

One cannot possibly understand how the Islamic Republic has held together for 45 years in the face of war, sanctions, imperialist encirclement, and ethnic separatist terrorism if one doesn’t recognize the popular and working-class backbone of the Iranian state.

3. Iranian Revolutionary Guard

It might seem strange to include them in an analysis of Iran’s economic system, but the Revolutionary Guard are key players in Iran’s planned economy. They directly own and control much of Iran’s vital infrastructure outside the oil industry- roads, natural gas, railways, even banking. Many of Iran’s Revolutionary Guard were Basij militia in their youth, and thus have been heavily vetted as patriotic and committed to the ideas of the Islamic Revolution. The purpose of them managing Iran’s infrastructure is Iran’s national security above all else.

Iran’s Revolutionary Guards are important to mention because Western media coverage often talks about Iran’s state run assets being ‘privatized’, especially during the tenure of President Ahmadinejad (2005-2013), when in reality most of these so called privatizations transferred state run enterprises (under the purview of the Iranian parliament) to Iran’s Revolutionary Guards. So, Iranian assets were moved from state control to state control- not privatization at all, not in the neoliberal sense anyway.

So, between the Bonyads, the officially state-run sector, and enterprises run by the Revolutionary Guards, the majority of Iran’s economy is either directly controlled by the state or subsidized by it.

In conclusion, the lesson to be taken from this overview of Iran’s economy is that whether you can technically label Iran’s economy as socialist or not (despite the many controversies over what socialism is), it is crystal clear that it is NOT a neoliberal or free market system. The main purpose of this economic model is to 1) Ensure the economic sovereignty and national security of Iran and 2) Provide a safety net for the working classes and rural poor who are the main base of support for the Islamic Republic. It is not about enriching individuals.

Even allowing for corruption where unscrupulous individuals misuse such institutions to enrich themselves (a problem in every socialist system including the USSR and China), it is a very difficult environment for a conventional bourgeoisie to grow, much less flourish. The arch neoliberal heritage Foundation ranks Iran in terms of ‘economic freedom’ (openness of its markets) in the bottom ten, along with the DPRK, Cuba, and Venezuela.

Contradictions and Ongoing Challenges of Iran’s Islamic Socialism

Obviously, the threat of a direct military confrontation with Zionism is dominating the headlines, as is ISIS terrorism (the heinous attacks on the memorials for General Soleimani that killed over 100 people this January comes to mind). But the biggest vulnerability of the Islamic Republic are the class contradictions arising from within Iran itself. Without resolving these contradictions, Iran cannot continue to be the effective leader of the Resistance Axis and the player in the emerging multi polar world it aspires to be.

In certain ways, the Islamic Revolution is burdened by one of its greatest successes: the expansion of its middle classes. In 1979 only 5% of Iran’s population was middle class, now over 34% is. This was not a mere accident, but a result of government policy. In the wake of the Iran Iraq war, the government provided university scholarships for millions of family members of veterans of the conflict; In effect, Iran’s version of the GI Bill. This gave many working-class men and women access to a university education for the first time and allowed them to enter the middle class. In a twist of irony, this very class created by the Islamic Revolutionaries has largely come to turn against the Islamic socialist system.

Liberals and even many Marxists ignore the class dimension of these clashes in Iranian society. This class conflict is best represented and explained by the two main parties in Iranian politics. There are the Reformists (as represented by President Khatami who was in office from 1997-2005) and President Rouhani (served 2013-2021), and the Principalists (represented by President Ahmadinejad when he served 2005-2013), and Raisi (who served from 2021 until his death in 2024). The Iranian middle class tends to vote for the Reformers, the working class tends to vote for the Principalists. There are of course exceptions, but these are the general trends.

The Iranian middle class tends to desire more personal freedoms and resents the conservative religious laws enforced by the clergy. As aspiring entrepreneurs, they feel stifled by the large public sector, and demand privatization of the state-run enterprises/the bonyads. Many are also unenthusiastic about Iran’s commitment to the Palestinians and other anti-imperialist causes, feeling that these constitute an unnecessary drain on Iran’s resources.

By contrast the working class/rural poor majority, roughly 2/3rds of the population, feels differently. They support maintaining the state sector (since they materially benefit from it), and since they are extremely religious, tend to view cultural liberalization as creeping Western influence.

The two camps have come into increasing conflict with each other. The West funds, encourages, and carries out information warfare in support of the Reformist camp, since they see them as more likely to destabilize and bring down the Islamic Republic.

In 2009, President Ahmadinejad won re-election, and the Reformers cried fraud, mobilizing a largely upper middle-class movement known as the Green Movement. Working class Principalists supporters, Basij activists, and police fought against them in the streets and dozens were killed, and thousands arrested. Western and Iranian exile media gave overwhelmingly positive coverage to the Green Movement.

The same playbook unfolded in 2021-2022. In 2021, another Principalist, Raisi, won Iran’s national elections. The next year, the same middle-class forces that supported the Green Movement seized upon the death of Mahsa Amini to kick start mass protests against the government- protests which became violent. Hundreds were killed by the police and security forces as well as by the protesters themselves (the exact numbers of those killed and the circumstances of their deaths is hotly disputed). There was also an ISIS terrorist attack on a Shia shrine at the same time as the protests, further contributing to the destabilization.

How can these contradictions in Iranian society be resolved? The harsh US sanctions on Iran give encouragement to the Reformist/middle class tendencies, who believe that if Iran relaxes its anti-Western posture, drops its anti-neoliberal and anti-imperialist policies (especially its support for Palestine), the sanctions will be lifted and the new prosperity from trade with the West will boost the middle class. This was the logic of President Rouhani's nuclear deal with the Obama administration in 2015. While it did initially succeed in increasing Iran’s trade with Europe, the Trump administration pulling out of the deal and assassinating General Soleimani in 2020 proved the Principalist arguments against the agreement correct, and badly damaged the credibility of the Reformist camp.

By contrast, the late President Raisi’s strategy has been to turn to the rising Chinese/Russian economic bloc for economic support instead, working around the US sanctions and not compromising on the Islamic Republic's anti-capitalist and anti-imperialist principles. It seems likely that with time, prosperity coming from trade via the Belt and Road will help create a different middle class, one that has access to the consumer goods and opportunities it desires, but one that is also loyal to the Islamic Revolution and turns to the East instead of the West for inspiration.

Therefore, the notion that the Iranian system is a house of cards in imminent danger of collapse is in error. Given the deep well of support and legitimacy the system has with the majority of the population, a rapid collapse is unlikely barring a nuclear conflict or some equivalent catastrophe. Hopefully, the turn towards the BRICS and multipolarity will be continued by whoever Raisi’s successor is in a prudent fashion to resolve Iran’s external and internal contradictions. Iran’s upcoming Presidential elections on June 28 will provide more clarity on the path forward, but a continuation of the path the late Raisi took is likely, due to the factors outlined in this essay.

Sources/Further reading:

Kevan Harris, A Social Revolution: Politics and the Welfare State in Iran(University of California Press, 2017)

Razmin Mazaheri, Socialism’s Ignored Success:Iranian Islamic Socialism(PT. Badak Merah Semesta, 2020).

Vali R. Nasr, The Shia Revival(W.W. Norton, 2006).

Mahmoud Taleghani, Islam and Ownership(Mazda Publishers, 1983).

Woman, Life, Fiction: Exposing the Lies Behind Iran’s 2022 Color Revolution.(January 8, 2024) RTSG publications. https://rtsg.substack.com/p/woman-life-fiction

Graphic of social gains of the Iranian Revolution:

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Author 

​Marius Trotter is a writer residing in Massachusetts. He comments on history, politics, philosophy and theory. He can be reached by his email [email protected]

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