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The legacy of the shah: capitalist transformation forced from above
Capitalism's first steps
The reforms of the «White Revolution»
In the storm of the crisis


The legacy of the shah: capitalist transformation forced from above
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We publish below an article which appeared in December 1978, in our French newspaper, «Le Prolétaire», together with some economic and social observations taken from our Italian organ, «Il Programma Comunista». Both were written before the «February days», when the masses revolted and tried to resolve the most immediate problems posed by the social movement in their own way. The insurrection thus came up against the privileges of imperialism, the Court, and the remnants of ancient despotism placed at the service of a frantic accumulation of capital driven by imperialism and symbolised by the hated SAVAK. The bourgeoisie as well as the ayatollahs tried to settle these questions «from above», by introducing constitutional reforms and by preserving the continuity of the state and its essential organs, the officer corps and the police.

The armed workers chased the SAVAK agents out of the factories, and the officer corps was roughed up, but it is obvious that the bourgeoisie, after receiving power from the hands of the clergy, is now making a concerted effort to get both operating as soon as possible. In the meantime it is obliged to carry out a purge that it nonetheless strives to keep as limited and harmless as possible. As long as the working class obstructs production, it is constrained to tolerate the inevitable aberrations of the petty bourgeoisie, which has taken refuge in Islam in the hope of protecting itself from the advance of capitalism.

The dramatic events that shook Iran prove that only insurrection can deal with the question of reforms thoroughly and satisfy the most pressing economic and political needs of the broad masses, and only insurrection can strike a serious blow at imperialism. Moreover, Iran has also demonstrated that in the absence of its independent party, without which the insurrection cannot accomplish the destruction of the state, the working class reaps the minimum return from its enormous sacrifices. The tremendous waste of social energies which is occurring in Iranian society today can only bring to mind the powerful image used by Trotsky in his preface to the History of the Russian Revolution:
Without a guiding organisation the energy of the masses would dissipate like steam not enclosed in a piston-box. But nevertheless what moves things is not the piston or the box, but the steam».

In the «Eighteenth Brumaire», Marx wrote that all bourgeois revolutions have only perfected the state apparatus, instead of smashing it to pieces. Hence it is clear that the victors of today have already inherited the historical tasks of the defeated. It is also clear that the reforms they have made will leave the working masses and even broad layers of the peasantry in hunger, since these reforms were subordinated to the need to strengthen the bourgeois state. But in the present international situation, this does not mean that the state will achieve a lasting stability, nor that the army protected by the flag of Islam will not succeed in eliminating, by a coup d'Etat, the conglomerate of petty bourgeois elements endeavouring to make a nest for themselves in the state apparatus. On the contrary, this may be necessary in order to make the state a more efficient counter-revolutionary instrument in these stormy times, and in order to replace it once again under the direct rule of imperialism. Under such tragic conditions, the best service the «Islamic revolution» could render to history would be for the political power it has erected to reveal its true nature as soon as possible: it is the political power of the bourgeoisie as a class. This would force the proletariat in turn to appear on the historical scene as a distinct party.

The masses of workers held the monarchy and the army at bay for months before dealing them both a powerful blow. Will they continue to work voluntarily, without flinching, without trying instinctively to advance their own class demands, which no bourgeoisie is willing to satisfy? And will the agricultural proletariat and the poor peasantry refrain from attacking these property relations which lie half-way between the feudal past and the modern capitalist relations of production?

In January we predicted that «the existing social front between the proletariat and the petty bourgeoisie has to fall apart [...]. But since this political rupture has not been initiated by the proletariat, it might unfortunately happen under the most disadvantageous conditions for the proletariat, leaving it unprepared and bound hand and foot to «Islamic democracy», to face the state. The working masses would have no alternative but resignation or a desperate uprising» (1).

Revolutionary Marxists follow the tragedy of the Iranian proletariat anxiously, and struggle so that the proletariat will not have to suffer once again all the sacrifices borne by past generations and so that, in the difficult re-awakening of the class struggle, the party will direct its steps as soon as possible onto the road of world communist revolution.

• • •

With the «awakening of Asia» at the beginning of the century, Marxism expected social upheavals both in the colonies - India, Indonesia, and Indochina - and in the semi-colonies - China, Turkey, and Persia (Iran). The fate of Persia, situated on the Asiatic frontiers of Russia, was linked to Russia's fate more than any other country, for social as well as strategic reasons. Thus the Russian revolution of 1905 produced an echo with the Iranian «liberal constitution», which endeavoured to limit the privileges of imperialism and monarchical power and gave the urban classes a certain freedom of movement, but left the privileges of the landed aristocracy intact.

The social earthquake of Red October also unleashed vast peasant movements, but the social development in Iran had not yet reached the point where it could give birth to urban classes capable of using these movements as a revolutionary lever. In the period immediately following 1917, the alternative was clear: 1) either the Russian revolution and the international proletariat would take the lead of this nascent social movement and enable Iran to leap over the bourgeois stage of historical development, by breaking ancient despotism and the centuries old oppression of the landed nobility, or 2) imperialism would succeed in making Iran an outpost in its counter-revolutionary cordon sanitaire, thus continuing its former policy of containment against Russia's Asiatic expansionism; and this would mean the introduction of a modern army into Iran, which in turn would necessarily result in a capitalist transformation under the tutelage of imperialism.

The isolation of the October Revolution left Iran at the mercy of the capitalist revolution from above. In addition to the impetus contributed by anti-Russian interests, which persisted and resumed their old logic when the proletarian revolution was liquidated by Stalinism, the capitalist revolution from above was given a powerful economic stimulus by the discovery of oil - which nourished its brazen hope of buying off the old classes instead of having to fight them, as well as the hope buying off the exploited classes' historical right to make a revolution.

The champion of this historical path was Reza Khan who, reinforced by British support, set his Cossacks loose to conquer Teheran. After saving the nobility and priests from social revolt, he forced them to surrender their titles and part of their political prerogatives in exchange for continuing to recognise their social privileges. He also confiscated more than half a million acres (5% of the arable land) and placed it in the Crown's personal domain, as payment for services rendered to society. Although he gave the rising bourgeoisie the embryo of a modern law code and a network of communications, and was almost to the point of installing a Republic. After the example of Mustapha Kemal Pasha in Turkey, he tore the Constitution of 1906 to pieces, further reinforcing the authoritarianism of the central power.

Thus, the totalitarian centralism of capitalist primitive accumulation was grafted, under the pressure of imperialism, into the ancient trunk of bureaucratic despotism, a despotism that had emerged slowly from the geographic isolation of self-sufficient hamlets straining under the weight of cities which had sprouted up at the intersection of landed property and the intense commerce of the caravan routes. This monstrous hybrid, combining traditional Asiatic absolutism with the «bloody legislation» that accompanied the birth of the modern wage-earning class everywhere, secreted a sort of Oriental «enlightened despotism». How could the flag of the capitalist revolution forced from above be anything but a mixture of disparate elements?

Its alleged «national» character, and even the abolition of treaties giving foreigners extra-territorial privileges, were only a cover invented by England in order to channel the awakened Persian national movement against the enormous Russian neighbour. The cover was designed especially to hide the English claim to exclusive hegemony over the whole of historical Persia, just as pan-Arabism had provided it an alibi in the Near East. The proof of this was furnished when Reza Khan wished to remain neutral in 1941. England retorted: «Reza, who made you Shah?» - and deposed him.

Capitalism's first steps
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Oil production began in 1909 and increased to 200.000 barrels a day in 1939, and to nearly 1 million barrels a day in 1959. Obviously the proportion of the state budget accounted for by the royal domains diminished considerably in relation to oil revenues. The revenues from oil financed industry, which began to move forward in the 1930's. Alongside the state and the foreign companies, which controlled big industry, a small and middle local industry began to develop, especially in textiles and foodstuffs. Above all, commerce took great strides, patronised by the Court, in an atmosphere teeming with bribery, corruption, intrigue, and influence peddling.

In the 1950's almost all of the fifty thousand villages in Iran, with an average population of 250, were still owned by sixty thousand nobles; ten thousand of these villages were in the hands of owners of more than five villages; 10% were religious property, and 5% belonged to the Crown. The great mass of peasant families still paid a tribute in kind to the landlord, who controlled water resources (an irrigation system is essential in this semi-arid country where 40% of the land has to be watered artificially) and the redistribution of land, which was still subject to annual rotation among families, except in certain cases where it was cultivated jointly.

The countryside was nonetheless drawn into the general foment. The landlords, who traditionally lived in the cities, began to farm their lands to get money, half of them managing the farm themselves, while the rest rented to civil servants or merchants. A sector of large-scale farming emerged, bringing with it speculative crops and wage labour. Thus in 1960, 12,300 units of more than 125 acres cultivated 13% of the land. On the other hand, the peasant economy, reduced to diminutive plots on which the landlord exerted an increasing economic pressure, became more specialised, and the plots shrank to the point that 40% of the families had less than five acres each. At that level a bare existence was impossible and many peasants were compelled to seek employment on the large estates or emigrate to the cities.

In spite of this economic evolution the sole master in the village was the landlord, for he not only utilised the land arbitrarily, but dispensed justice as well, so that the old patriarchal relations became unbearable for the peasants. The landlord's economic weight on the peasants' shoulders thus remained intact, even though the economic importance of the landed aristocracy as a whole had only declined with the development of the cities, industry, and commerce which thrived thanks to the production of oil. The political weight of this social class remained considerable, a fact which is explained by the fusion of the landed aristocracy with the army and high government offices. This situation was perpetuated not only because the nobility had a long military tradition and because the Iranian state was above all an army, but also because the countryside remained under the exclusive control of the nobility until the beginning of the 1960's, while the state administration and civil servants controlled the cities.

But Iran is a country where 31% of the total population in 1956 lived in the cities, where shops and industry accounted for 1.2 million persons (21% of the active population), where commerce, transportation, and public services employed close to one million persons (17% of the active population), where 60% of the urban population lived on wages, and the remaining 40% from activities that had nothing to do with agriculture - not to mention a parasitic administration and army which employed at least 450,000 persons (2). Could a country with such a profusion of bourgeois and modern interests - even if they were drawn along almost in spite of themselves by imperialism and anaesthetised by the oil revenue - be driven by the riding whip of the aristocracy for much longer?

In the 1950's, economic and social conditions were quite ripe for a bourgeois revolution directed against imperialism and the old feudal relations, a revolution, moreover, which could base itself on a true peasant revolution.

Iran was not spared by the social tidal wave that engulfed Asia from its epicentre in the Far East in reaction to the earthquake caused by the second imperialist war. The urban classes took advantage of the situation - the weakening of the regime brought about by the transformation of the country into a vast battlefield, the fall of Reza Khan, and the struggle for influence between the British and Americans - in order to make their own voice heard.

The Mossadegh reform responded to the first movements by nuclei of workers and the urban petty bourgeoisie, which had significant repercussions throughout the countryside. The new classes born from urban development endeavoured to negotiate with imperialism for more room in the state apparatus vis-à-vis the nobility, and for a larger share of the ground rent, while promising an agrarian reform and the Constitution of 1906 in order to calm the masses. But even that was refused by American imperialism, England's successor in the region. The USA was conscious of Iran's strategic location at the heart of the «zone of storms» in the Gulf oil fields, and of its role as a rampart against Russian expansion in Asia. This is why the coup of August 1953, which put an end to the impotent reformism of Mossadegh and returned the Shah to power, marked a new acceleration of Iran's integration into the world market, while the treaty with the United States in 1956 initiated a new phase of militarisation.

The SAVAK was created in the same year, furnishing a centralised police apparatus, which controlled the entire country in co-operation with the Americans. But that did not prevent a resurgence of the social movement in the form of broad workers' strikes in 1956 and 1959. The economic crisis of 1960-61 awoke the students and petty bourgeoisie, and spread to the countryside where an atmosphere of peasant revolt reigned at the beginning of 1963. The movement reached its climax in June 1963, when a large spontaneous revolt was put down by the army, leaving 15,000 corpses in the dust of the streets of Teheran and its suburbs.

However, the counter-revolution could not leave the social situation unchanged. Although it had used the nobility to frustrate the bourgeoisie's claims against imperialism between 1950 and 1953, it could restore the complete domination of imperialism only by further accentuating the capitalist character of the state, and of the army itself. A feudalist can wield a sword, not pilot an aeroplane. Likewise, driving a tank requires a soldier hardened in the school of industrial sweatshops, not a peasant serf barely able to hold a gun. The formation of a modern army and the utilisation of oil revenues - henceforth the sole income of the state which had definitively ceased to support itself on agricultural ground rent - necessitated social concessions to bourgeois development and a reduction of the political weight of the old landed aristocracy in the state. If the counter-revolution of 1850 in Germany was able to prevail only by making itself «the testamentary executor of the revolution», this time, in an Iran caught in the grip of an imperialism that had assimilated all the experience of a whole cycle of bourgeois rule, the counter-revolution could hold out against the rising Asiatic social wave only by preceding the revolution: as the government itself explained, it had to «make a revolution from above when it threatened to be made from below».

The reforms of the «White Revolution»
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The reforms of 1962-63 limited landed property to the possession of one village, while the «liberated» land became the property of the peasants in exchange for a tax paid to the state for a period of fifteen years. The remaining peasants were transformed into tenant farmers, while the government gradually took over administration of the villages from the nobility. In reality it was not until 1969 that the old landed aristocracy became convinced of the advantages of the new system: the agrarian reform could then be generalised, and the mass of peasant cultivators became owners of their small plots by means of a tax paid to the state for twelve years. Meanwhile, co-operative organisations theoretically undertook the tasks of maintaining the irrigation systems and marketing the crops.

This reform had the undeniable effects of destroying the old peasant economy. It broke the basic economic links which subordinated the peasant to the noble and to the remnants of the old agrarian community; it drew the peasant increasingly into the market, and accentuated the massive proletarianization of the peasantry, which still vegetated on ridiculously small plots. However, the peasant, now at the mercy of the market, still had to bear the arrogance and wrath both of the old landlords, who were the real masters in the co-operatives, and also of the state bureaucrats who henceforth supervised capitalist exploitation, but always in the old despotic style.

While enforcing the passage of the peasant to modern society and maintaining a maximum of oppression, the «white revolution» took the longest route to capitalist agriculture. The old feudal domain was theoretically opened up to capitalism, but the development of productivity was exceedingly sluggish and weak. Agro-industries were implanted on 1,000,000 acres through the fusion of local and Anglo-Saxon capital, and agricultural companies were set up on another 1,000,000 acres. The peasant thus became a wage earner at sword-point under the direction of the old landlord who had been transformed into a capitalist linked to the state bureaucracy. Producers co-operatives were formed, enabling large landowners to concentrate the land and credits for their own benefit. Tractors, fertiliser, and credits were introduced into a commercial agriculture of middle and rich peasants, which provisioned 70% of the market with only a quarter of the manpower. But in spite of all these measures, Iranian agriculture in the 1970's ceased to be able to produce enough food for the cities, and as result Iran has had to resort to massive grain imports.

The reform liquidated the weight of landed property and began to open up the countryside to industrial products; fresh manpower poured into a capitalist industry stimulated by Iran's subordination to the economic and strategic requirements of imperialism. The exponential development of Iranian industry thus succeeded in creating an outlet for the pressure of the peasant masses on the remnants of pre bourgeois forms in the countryside. Iran became an industrial country: in 1973, agriculture represented no more than 18% of the national revenue, surpassed by industry and factories which accounted for 22.3%, and by oil which accounted for 19.5%, not to mention the inevitable services which thrived like leeches on all the rest and which represented no less than 40.2%. In relation to 1960, the active agricultural population grew by only 9%, representing 400,000 persons, to reach 40.1% of the total active population, while the total for industry and mines, now 2.7 million persons, grew 125%. The tertiary sector, after a rural exodus of close to a million and a half persons, now comprised as many workers as the other sectors.

Until this point, the capitalism, which had penetrated Iranian society, appeared only as a simple by-product of the development of monetary wealth produced by the oil gold mine. The generalisation of this wealth swelled the old channels of commerce and usury, those antediluvian forms of capital. Whence the tremendous growth of the Bazaar.

Alongside this, the bureaucratic state implanted the new mode of production, but it used the old social forms: it did not invest in industry to make capital; it spent its revenues on industrial gadgets. It treated itself to steel mills and agro-industries in the same way as Darius had indulged in the palaces of Persepolis. Moreover, the Iranian state could «play its international role» as the pillar of counter-revolution, policeman of the Gulf, and the West's rampart against Russia, and at the same time contain all the enormous social contradictions created by this exponential development on a still archaic social base, only by strengthening its apparatus. It inflated beyond measure «the most modern army in the world» and the most centralised, ferocious police force, in order to suppress whatever could not be bought off, amidst a maelstrom of corruption and influence-peddling such as Marx believed had attained its historical climax in the France of Napoleon III.

However, if the «ears of the king» of old succeeded in detecting social discontent quickly enough to sound the alert, the modern SAVAK could not hear all the dissenting voices engendered by modern development, much less silence them. The soaring oil prices in 1973 not only provoked a real leap forward in industry, but the rise of oil revenues condemned the society, already bled white by the revolution from above, to a new leap towards full capitalism. Capital means concentration: from now on, small industry had to give way to large industry, small commerce to large commerce, small agriculture to large agriculture. Get big or perish; that is the law.

In the name of civilisation, the Cossack sabre delivered Iran to the yoke of the world market. When the large stores were unable to drive the Bazaar out of business, modern urbanism razed it to the ground. When the largescale import of American wheat (now furnishing a quarter of consumption) no longer sufficed to keep the worker's wages as low as possible in order to compensate for the low productivity of industry, a new agrarian law was introduced to bury the agricultural middle class just «liberated» by the agrarian reform, as well as landed property unfit to become big-capitalist.

In nineteenth century England, the «corn laws» which authorised the import of American grain, were the object of an important political battle in which the proletariat participated with admirable combativity. It fought alongside the industrial bourgeoisie, even though it was aware that the import of American grain signified a decrease in the value of its labour power. But the workers' aim was to break the economic and political power of the landed aristocracy, and they took advantage of the dispute between different factions of the bourgeoisie to put forward their own demand for a 10-hour workday.

In present-day Iran, this battle has already been fought, unfortunately without the political participation of the proletariat. The interests of bourgeoisified landed property have become subordinated to those of industrial capital, with the help of its master, international finance capital.

As for the small and middle bourgeoisie of the cities and countryside, of the Bazaar and the co-operatives, the spontaneous effect of the laws of the market was still too limited to complete their historically inevitable ruin at the rate required by the cyclone of big capital. Here too the state had to intervene. When oil revenue was not enough to do the job, the SAVAK took over. But then the international crisis broke out and Iranian society fell prey to an unprecedented economic and social crisis, this time without any shock absorbers.

In the storm of the crisis
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After 1970 Iran was hit by a powerful wave of workers' strikes involving one by one all the enterprises and all the sectors of the economy; the proletarians did not hesitate to brave torture and murder. Naturally, the massive increase in the cost of living and the sudden slowdown in expansion gave an additional impetus to the strikes. But in the breach opened by the working class the crisis incited the impoverished urban masses to revolt. With them came the Bazaar, which strained under the brutal contraction of the market and the unbearable weight of foreign competition, and finally the middle classes, undergoing a rapid proletarianization, and the students.

This crisis was compounded by a terrible agricultural crisis. The most serious effects were not caused by the failure of the agroindustries, which had to be bailed out by the state. More importantly, foreign competition prevented large-scale farmers from selling wheat on the market, and hence they could not meet their bills. The unemployed and the migrant labourers thronged towards the countryside, casting the poor peasants and the agricultural proletariat into the depths of poverty. Following the cities, almost the whole rural population stood up against the Shah and imperialism.

The rebellion of the middle classes against the regime explains the mass and popular character of the Iranian revolt. But the proletariat still has powerful links with the peasantry and the petty bourgeoisie, and in the absence of a bourgeois revolution, which could have exposed the broad masses to an intense political struggle, the interests of the various classes had not become differentiated. The terrible consequences of the Stalinist counter-revolution condemn the young Iranian proletariat, in spite of its great combativity, to fight without a party which could guide its steps, hasten the assimilation of its own experience, and teach the proletariat its own program. All these factors explain why the working class is still only the tail of the political movement of the petty bourgeoisie, of the «people in general». Hence the apparent unanimity of a movement whose social components, although united in their hatred of the despotic regime and of its master, American imperialism, nonetheless reflect profoundly different interests.

The powerful economic links between the Shiite church and commercial and landed (essentially urban) property, in addition to the terrible backwardness of the countryside, preserve the clergy's enormous influence in social life. Moreover, the traditional role of the mosques as centres of charitable help and especially as a focus of social and political life in a country where all other kinds of expression and assembly are cruelly suppressed, as well as the traditional opposition of the Shiite religion to the Shah's regime, explain the tremendous religious imprint on the whole revolt movement.

In particular, the Shiite religion furnishes the banner of struggle against the influx of Western ideas and provides an ideological cover for the struggle of the middle classes against competition from Western manufactures and capital. It assures continuity to the protest against the crimes of the regime. By adapting its organisation to channel the popular movement, the Shiite church has transformed itself into a party, the party of political protest against the despotism of capital, with a nationalist program and aspirations to «turn back the wheel of history». This «feudal democratism», adulated by the late Mossadegh's National Front, the Tudeh Party, and a string of Maoist-populist groups, is the purest synthesis of the political impotence of the petty and middle bourgeoisie and their reactionary historical vision.

Whether the Shah remains or a new Islamic republic is established, the new government will probably be compelled to negotiate with imperialism for a certain tightening of the borders against foreign goods which will give a temporary respite to the middle and rich peasantry and to the urban petty bourgeoisie. But the greatest damage for the Bazaar comes more from the fall of the oil revenues than from the unavoidable foreign rivalry that this fall aggravates; it will come to a quick understanding with its true master, imperialism. As for the middle peasantry and landed property, on the one hand they can be sure that industrial capital will not be able to guarantee for very long an archaism that entails a terrible handicap for it in competition on the domestic market. On the other hand, it is certain that Islamic democracy is as congenitally incapable as the Shah's regime of giving the peasant masses a «supplementary agrarian revolution» which would alleviate their oppression; it is all the more incapable of delivering them from the torments of capitalism, from which they could not liberate themselves without destroying its roots, that is, without overthrowing bourgeois society.

In the meantime, a change of regime could well remove the aspects of the state that are most unbearable, such as the exorbitant rights granted to foreigners or the intolerable luxury of some families among the «corrupt» aristocracy. But it is clear that no constitution, no «democracy», will be anything more than a «fig leaf of absolutism» designed to hide the nudity of the state's terrorism. As for the state, the remnants of ancient despotism have become so intimately linked to its capitalist function that they can be eliminated radically only if that function is destroyed. It can only be destroyed by means of a revolution which, while basing itself on the need for a radical destruction of the pre bourgeois vestiges, falls into the hands of the proletariat in order to serve as a machine of war in the struggle of the international proletariat against capitalism.

The old impotent classes as well as new immature classes surge up periodically but break as regularly against this Bonapartism raised to the hundredth power. Born in the void created between a frenetic economic development and the sluggishness of social evolution, this Bonapartism has been fortified by its control of the economic levers and by a gigantic military and police machine, as well as by the military, financial, and political support of imperialism.

Let us anticipate the next social earthquake by referring to the analogy of another Bonapartism. The working class in Iran today, still weak and without leadership, is nevertheless the only historical class capable of advancing society. It must oppose the concentrated force of the despotic state with a still more centralised and centralising force, having drawn the lessons from the present tragedy and assimilated the wealth of lessons from the long and tortuous road of the international working class. Like the French working class of more than a century ago, on the ruins of a society heated to incandescence by its raging contradictions, it will erect its Red Commune, a victorious link in the international chain of the proletarian revolution.

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  1. «L'Iran, c'est le monde», in «Le Prolétaire», no. 281, Jan. 1979. [back]
  2. The social structure of Iran in 1956 bore a resemblance to Russia in 1914, where the urban population amounted to only 20%. The proportion of proletarians was quite similar (33% in Iran and 26% in Russia), and that of industrial proletarians almost identical (13% vs 11%). [back]

Source: «Communist Program» No. 5, June 1979

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