Kevan Harris is an assistant professor of sociology at the University of California, Los Angeles. His book A Social Revolution. Politics and the Welfare State in Iran (University of California Press, 2017) won multiple awards and was published in Persian translation in Iran in 2019. Daniel Walter spoke with him about the inadequacies of rentier state theory, the Iranian “welfare state”, and possible developments following the recent protests.
To what extent is “neoliberalism” the cause of the latest protest wave in West Asia and North Africa?
I would say there is a rising discontent with the analytical usefulness of the term. It is very hard to delineate and usually applied to all aspects of social life. As a result, all crises end up looking the same, while historical differences between regions and state projects are erased.
As a historical sociologist, I look at similarities and differences. In order to do that, you often need to bring in other types of characteristics, which cannot just be covered under the term “neoliberalism”. Otherwise you will not be able to analyse these situations properly. The civil war in Lebanon produced a very specific state and elite bargaining process, for instance. It looks very different than the common state form coming out of the Arab Republican era that we see in the Middle East, including the state in Iran in many ways.
David Walter studied political science and Middle Eastern Studies in Bonn, Sweden, and Tehran, and is currently working on his PhD at the Leibniz-Zentrum für Zeithistorische Forschung (ZFF) in Potsdam, Germany.
There are no similarities?
Iraq, Lebanon, and Iran of course share similarities. Austerity politics has been obliterating the social contract in all three. But there is a tendency to collapse different contexts and processes into a single term. For activist purposes, however, I don’t find any problem with using the term “neoliberalism”. It’s a common term, it’s easy in the vernacular. But we cannot stop there. I think the term neoliberalism has replaced a more useful set of debates about capitalism, both historically and in the present, across the Middle East.
There is a big puzzle about the Middle East that the Left has not been able to address. Historically, the region on the whole has been less subject to neoliberal strictures and economic re-regulation than Latin America or Sub-Saharan Africa. Geopolitics put a brake on the pressures of neoliberalism experienced in the Middle East as compared to other regions. Egypt, for example, was never really forced to go through so-called “shock therapy”—compared to Brazil, Mexico, or other middle-income states. The reason was arguably the necessity of Egypt as an ally to the West in the 1980s and 1990s.
That is not to say that these countries have not shrunk their social contracts and increased pressure on the working classes, but an adequate perspective towards the world should be able to denote variations in similarities and differences. By criticizing “neoliberalism” alone, we are not going to get that far. Moreover, it leads to mostly useless debates over whether a policy or government is neoliberal or not, as if this were a binary variable.
In A Social Revolution, you analyse the Iranian welfare state built during the Pahlavi era and the Islamic Republic. You call it a “warfare-welfare complex”. How does the welfare state help us understand the Islamic Republic?
A widespread theory usually referred to as “rentier state theory”, often applied to Middle Eastern states, portrays these countries as well-designed, functioning systems in which authoritarian leaders strategically use resources from oil or external support, such as aid from Western and Gulf states in the Egyptian case. The political elite takes these resources, for which they do not have to tax the middle class, and distribute them to the poor through welfare organizations. The result is a clientelist machine with a loyal base that can reproduce itself.
That is the portrayal of Iran I read many times before I decided to look at its welfare state. It turns out that that story is incorrect. It’s not only ahistorical, but doesn’t even empirically represent what the majority of the resources spent on social policy in the country resemble.
Most of the resources Iran spends on social policy—such as social insurance, education, healthcare, and pensions—are directed at the middle and upper middle strata of the population. The Islamic Republic inherited these organizations from the Pahlavi monarchy, but extended them quite broadly.
At the same time, however, there is a peculiar case of additional, parastatal organizations with a social policy mission. They are products of the revolution, the war with Iraq, and tend to be highly politicized. Their activities are directed at parts of the population that were perceived to have been excluded from the Pahlavi monarchy’s social policy system.
Iran’s welfare state thus has two dimensions: a set of self-proclaimed revolutionary social policy organizations, and a larger set of corporatist organizations directed at middle and upper strata. The second dimension is common to many parts of the Global South, of course, which also rely on the legacy of corporatist state-building to distribute social policy albeit in an uneven fashion. In Iran, these two dimensions have moved in tandem. The expansion of welfare state organizations after the revolution—of both types—partly contributed to a transformation of Iranian society. At the time of the revolution, the country was largely rural, uneducated, and young. Forty years later it is largely urban, far more educated, and people see themselves much more as citizens who can make claims on the state.
As opposed to this social welfare system stabilizing the political order, as is often claimed of oil-producing governments, this social welfare system contributed to the generation of new and expansion of existing social classes. These social classes held an expanded degree of social power, which was then directed back at the revolutionary state. In that sense, the welfare state formed part of a dialectic between state and society. State-modernization projects attempt to strategically use social welfare, of course. They would love for the recipients of social policy to be the base of state projects and support their system, but historically that hasn’t happened.
Instead, new social classes have been produced, new social cleavages have formed, new political claims have been circulated, and new types of social power have been exercised back against the state. Therefore, what happened in Iran is the opposite of the classic rentier state theory. It’s a dialectic understanding of social policy and social contracts as opposed to a static, ahistorical approach, which I find present in previous scholarship as well as in writing on Iran and the Middle East in general.
You have described the social contract in Iran as one fuelled by “developmental populism”. What do you mean by that, and has it failed to deliver?
After the 1979 revolution, Iran’s political elite was highly fragmented. In terms of developmental policies, land reform, questions of private property and commerce, taxation, welfare policy, and family planning were all hugely divisive issues within the revolutionary political elite itself during the 1980s. At some point near the end of the Iran–Iraq War the political elite came to a collective realization that they face the same dilemma every revolutionary state faces: modernize or perish. The basic agreement was: “Okay, we disagree on almost everything, but we do agree that, for the revolution to survive, we have to engage in some type of modernization project.”
Early tropes in revolutionary rhetoric stressing morality, creating a new type of human being that revolutions are supposed to produce, have largely been relegated to the side and replaced by a discourse of development, meaning: “The revolution and the Islamic Republic is going to produce the good life in a material sense.”
If you look at the class structure of Iran today, the main transformation has been the depeasantization of the workforce. People have become either informal laborers, petty bourgeoisie, working-class individuals, or part of the middle and upper strata.
That creates contradictions. There has been a rise in average living standards in Iran, especially after the Iran–Iraq War and continuing until the late 2000s. Nevertheless, that doesn’t mean it was the end of politics. Rather, it was the beginning of a new type of politics, where new kinds of claims were made on the state and the people demanded different types of political representation. If one only views Iran as a kind of “Ayatollah state”, one misses, first of all, the cleavages within in the political elites amidst this social ferment, in which different class coalitions interlink with political cleavages in the elite and contribute to these very unpredictable cycles of politics in Iran.
Particularly as far as the economy is concerned, the Islamic Revolutionary Guard Corps (IRGC) are often depicted as a monolithic, powerful bloc pulling strings in the background. What is the IRGC’s actual role in the economy?
In the late 1980s, a revolutionary discourse of self-sufficiency and the strictures of internationally imposed autarky led to a process whereby different parts of the Iranian state essentially began privatizing themselves. They did this through subcontracting, private firms that were unofficial businesses attached to ministries along with the IRGC and other state organizations. It was a general process of sub-contracting to parastatal institutions.
By the 1990s, the government encouraged this development because it wanted these parts of the state to pay for themselves. At the end of the decade, all these different institutions—not just the IRGC—created their own special banks because the state banks wouldn’t lend money to these new businesses. The IRGC has a bank, the military has a bank. Even the municipality of Tehran now has its own bank! To only look at the IRGC is to miss the ecosystem in which these activities take place.
How did that change under Mahmoud Ahmadinejad?
The state collected large amounts of revenue during that period, but privatization and shrinking the state were also high on the agenda. Iran, however, only had a small private sector that either could not or was not allowed to buy up the huge assets nationalized into the public sector after the 1979 revolution. So in the 2000s, under Ahmadinejad, big parts of the public sector were essentially given to these parastatal entities, including large shares in companies handed over to huge pension funds heavily invested in the economy. All of these entities began taking parts of the state, leading to this grey zone of semi-state ownership that produced lots of space for corruption.
The sanctions under the Obama administration in the early 2010s made everything even more opaque, because everyone was hiding their transactions. After 2013, when the reformists and moderates returned to power, they were accused of corruption and often caught in the act. This shows there is a historical process that produced this form of semi-state ownership system, and if you only say that the IRGC is controlling all of these things, you’re missing the real story.
So who owns these organizations?
The parastatal organizations are not owned by individuals. Oligarchs of the Eastern European type are largely absent in Iran. It’s not like Russia or Ukraine, it’s still a kind of statist milieu.
Just because organizations or individuals attached to an organization are highly present in the economy doesn’t automatically mean that economic power translates into political power the same way around the world. To me, those who go on and on about the IRGC and the economy, assuming that economic and political power are totally fungible, are, in a way, vulgar Marxists. They’re not historicizing the process, they’re not taking into account the entire ecosystem in which these ownership processes are occurring, and they’re also conflating the political and the economic.
The major protests since 2018 are commonly seen as fundamentally different from the Green Movement in 2009. The prior cases are comprised of the lower- and lower-middle class in provincial towns, the latter was mostly urban intelligentsia. Is this picture accurate?
There are two very big assumptions in most analyses of the recent protests that I would challenge. One is the assumption that the poor in Iran, the bottom 30 to 40 percent, are the main foundation for the conservative elements of the Islamic Republic. That assumption has arguably been incorrect for at least the past 20 years. Instead, it’s more likely that both the main sources of support as well as critique and protest have been the new social classes produced and expanded over the post-revolutionary period. The middle strata of society is where you find strong support for the state, as well as strong opposition against the state. Just look at the funeral marches for Qasem Soleimani—these are not the poorest people in Iran.
The idea that poor people are the foundation of the Islamic Republic is a myth. This argument resembles the theory that Iran can simply give resources to poor people and then they support the state, just like a bribe. The argument reflects the diffusion of right-wing discourse from Europe and the US into analysis of Middle Eastern politics, claiming that state welfare programmes produce dependent or supplicant clients who become apolitical through some kind of left-wing redistribution policy. Many Iranian intellectuals write about the poor in the same way inside of Iran.
There is little empirical evidence that the Islamic Republic’s main base is in the poorest strata, whether in electoral matters or in the social bases of conservative institutions. In fact, the poor were slowly pushed out of the social compact altogether over the 1990s and 2000s, aside from benefitting from the trickling down of economic growth and the universal subsidization of staple goods and fuel. That in turn might explain why Mahmoud Ahmadinejad was so popular in Iran. Not only did he look and talk like the bottom 30 percent, he was also an example of how to escape that bottom 30 percent.
He was a man who came from a poor family and became an engineer, mayor, and president. He also implemented one of the liberals’ ideas—a near-universal cash-transfer system, something Iranian liberals hated him for. Instead of subsidizing gasoline at the point of consumption, cash would be handed out to households directly.
That had a big impact under the previous round of sanctions in 2011 and 2012 under the Obama administration, because it created a buffer at the bottom of the income bracket. Many economists claim that the Gini index actually reduced by several points on the basis of introducing this universal cash transfer.
The cash transfers linked up many Iranians who had been slowly been excluded from many segments of the post-revolutionary social welfare system into a shifting social compact. When you think about it that way, it’s not that surprising that the grievances of the 2017–2018 protests and the grievances of the 2019 protests are really revolving not around individuals who are always excluded, but around individuals who have access to some parts of social policies. Some of the main protagonists in 2017–2018 were pensioners, teachers, truck drivers, people who commute to their jobs. The same goes for 2019. The rise of gas prices had a very real effect on the people’s daily lives.
Now, are these individuals radically different than the Tehran intelligentsia? To be honest, the Tehran intelligentsia are pretty removed from a lot of the country. But these individuals are probably not that different from most Iranians.
In what sense?
I’m not saying that they’re all this upper-crust elite, but I have a story in my book where I talk to some young cosmopolitan Iranians in Tehran in 2011, who asked me, “Where have you been the last few weeks?” And I replied that I was doing field work in villages near Kashan and looking at the healthcare system in the villages, and said “I was in the health houses—the village clinics constructed since the revolution that helped provide health care to the rural population.” These people looked at me like I was talking about the moon. They said, “There is no health care in the countryside?! The government doesn’t take care of anybody!” I asked, “When was the last time you’ve been to a village?” And, of course, they hadn’t been.
The state usually portrays this demographic in a similar way.
That doesn’t mean those people in Tehran are aloof. I don’t want to portray them as the state portrays them, that they’re somehow not Iranian or disconnected. But the impression that the protests are being carried out only by the poorest of the population is partly a product of the way in which some of the people in Tehran and Iranians outside of Iran perceive the protests. It’s a good example of how the depeasantization in Iran has also produced a big disconnect between some parts of the urban classes and the suburban and provincial parts of the country.
Were the oil price hikes a result of economic sanctions? Why announce them in that time and in that manner?
Policy decisions in Iran are often analysed ex post facto, as if it was an intentional policy at that time because of some rational reason. Most analysts pay very little attention to the policy process in Iran itself. If you do, you realize that it’s very difficult to move from a policy idea to a policy outcome. There are a lot of veto points where a politician or elite network can stop a policy from occurring. Even when Ali Khamenei says to do something and it is reported in the Western press, it doesn’t mean that it happens the next day.
There’s been a discussion within the Rouhani administration to raise the price of gasoline ever since he was elected in 2013. If you do a whole re-reading of why the gas price hiked at that specific time from an internal story, it becomes clear it can’t only be related to the sanctions. The sanctions and reduction in state revenue might have given an incentive to shift that policy process in one particular direction, but I still don’t think it was just because of sanctions.
The harsh crackdown on the November protests, the killing of Qassem Soleimani, and the cover-up of the plane shootdown have created massive fissures in the power structure. How do you evaluate these developments?
If I had to make a prediction, I would say there are two possible outcomes. The stable outcome—which is not positive at all—would be a new right-wing coalition in Iran that is undemocratic but stable and has some kind of alliance with capitalists inside of Iran. They might be able to stabilize the economy and strike a deal with the West to alleviate some of the sanctions.
The political coalition that seems to be gaining power out of the international crisis involving sanctions and the Trump administration’s pressure is the right wing. There is no question about this. They’re using international pressure to attack their rivals, purge them from the political process—the run-up to the parliamentary elections with many candidates disqualified is a very good example. And although the right wing historically has been internally split, on the whole it seems like they’re winning. In general, internal pressure in the form of domestic protests and social movements tends to fracture the political elite and make space for centre-left forces, whereas external pressure—whether sanctions or threats of war—tend to unify the political elite and reward the right wing.
The alternative and more unstable outcome is probably even worse: no coherent ruling coalition, more and more social unrest, and the state basically starts to lose capacity to handle that. There are a lot of people outside of Iran who would love to see that, since few very policymakers actually believe that a reconstituted, pro-US government will be the outcome of any state collapse in Iran.
The outcome of an unstable, broken state is certainly on the agenda of many policymakers outside of Iran. The problem is that we’ve seen this occur many times already over the last ten years in other parts of the region, and the unintended outcome is always worse than even the worst of intentions. I’m putting it on the table because we can’t assume that the Iranian state can maintain capacity if the US economic war against it continues—and I don’t mean repressive capacity, although that’s often the most important—but just state capacity in general over the medium term.
The pathway to a social-democratic Iran that is both politically independent and has a foreign policy that represents Iranians as a whole is very narrow and difficult to imagine in the current situation. But making space for internal politics to occur, for movements to occur, for the political elite to be fractured, to reshuffle their coalitions, to include new voices and new social actors—that’s the only pathway I can see to producing the kind of social-democratic Iran that many Iranians want.