The Iranian theocratic state for long has been conceptualised as an ‘exceptional’ entity. Two sets of theorisation have hugely contributed to this understanding. Because the 1979 revolution is mostly interpreted as an ‘exceptional’ revolution that can’t be grasped through classical social theories of revolution, its main upshot, the Islamic state, is thus also viewed as a peculiar and unique entity. In addition, the pervasive rentier state theory fuels the exceptionalist accounts of the post-revolutionary Iranian state by giving an indispensable role to oil revenues in the construction of the state ideology, revolutionary elites, personalistic networks of patrons and clients, and Islamic revolutionary institutions. These conceptualisations generate two problems. First, they downplay questions of capital accumulation and class formation in the analysis of the state by adhering to the above-mentioned contingent factors. Second, they are marred by methodological nationalism because these factors are considered to be the products of the socio-political national space. In my article Neoliberalism and State Formation in Iran recently published in Globalizations I challenge these exceptionalist frameworks by drawing on the philosophy of internal relations. The central claim of the paper is that the Iranian state should be conceptualised in relation to Iranian neoliberalisation, which is part of the broader process of global neoliberal capitalism.
Neoliberalism and the State
The paper defines the state as a set of institutional forms reflective of social relations generated as a result of the processes of capital accumulation. However, due to the internationalisation of capital, the state cannot be understood only with reference to national space. The internationalisation of capital was a spatial fix for overcoming the 1974–1982 global economic slump. To facilitate this spatial fix, neoliberalism was envisioned to promote the deregulation of all economic activities. In other words, neoliberalism has been a re-weaving of worldwide economic and social relations whereby both advanced capitalist states and developing countries have actively reconstructed the global economy to tackle the same pressures and crises tendencies. This implies the rejection of viewing neoliberalism as a projection of Northern ideology or a by-product of the internal dynamics of the Global North. However, the outcome of the process of neoliberalisation in any given society has been unique and often hybrid despite sharing universal common features since it has been subjected to the particularity of domestic class structure and inter and intra-class struggles.
Based on this conceptual framework, the paper argues that the Iranian state as a set of institutional forms reflects social relations that have been constituted as a result of the relations between Iran and neoliberal global capitalism. As these relations are internally related to each other, the global economy therefore should not be seen as an external effect on Iran through oil revenues. Nor should Iran be seen as a confined set of social relations separated from the wider space of global neoliberalism. Likewise, the treatment of institutional and political relations autonomously from neoliberalism is not desirable because institutional and political relations emerge and reconstitute through the production and reproduction of the society itself. Put differently, to understand the institutional form of the Iranian state, we need to first examine the process of neoliberalisation and its impacts on the shifting balance between opposing social class forces.
Iranian Neoliberalisation and Class and State Formation
In the first decade of the revolution (1979-1989), the persistence of state-led development based on import substitution industrialisation in the context of revolutionary turmoil, war with Iraq, and US sanctions proved to be catastrophic. The prospect of declining profitability made a fundamental restructuring of the economy inevitable by the late 1980s. Consequently, the two successive governments of Akbar Hashemi Rafsanjani (president from 1989 to 1997) and Mohammad Khatami (president between 1997 and 2005) implemented a series of neoliberal reforms (phase I of neoliberalisation). These policies continued during the Ahmadinejad presidency between 2005 and 2013 (phase II of neoliberalisation), albeit with different rhetoric and objectives. These two phases of neoliberalisation have drastically changed the process of capital accumulation and consequently restructured the composition of the ruling class.
The principal outcome of the first phase of neoliberalisation under Rafsanjani and Khatami from 1989 to 2005 was the emergence of an internationally-oriented capital fraction. With close ties to various ministries and governmental organisations for oil rent and securing contracts, the continual existence of this internationally-oriented capital fraction is deeply dependent on the control of the executive body of the state, i.e. the government. In line with the export-oriented industrialisation, this fraction also views integration into global value chains of Western capital, particularly European capital, as a guarantor of its long-term existence. In the second phase under the Ahmadinejad presidency between 2005 and 2013, the neoliberalisation process shifted in favour of the revolutionary foundations (bonyads) and military forces, leading to the emergence of what I call the military-bonyad complex. While this fraction also embraces the deregulation of the labour market and exploits the privatisation mechanism to control some large government-owned enterprises, it rejects the policy of the incorporation of multinational corporations into state industries by blocking foreign takeovers. Consistent with this policy, the military-bonyad complex has sabotaged the rapprochement with the West. The economic rise of China and Russia’s re-emergence of geopolitical power have also aided its attempts to halt further the integration of Iran into the Western-dominated world order.
In the course of realising their interests, the internationally-oriented capital fraction and the military-bonyad complex have been involved in the reorganisation of state institutions. Two institutions have been vital for the military-bonyad complex since the early 1990s. The most powerful institution of the state, the Office of the Supreme Leader, appoints many crucial unelected offices such as the commanders of armed forces, the heads of the revolutionary foundations (bonyads), the head of the Islamic Republic of Iran Broadcasting, and the six Islamic jurisprudent members of the Guardian Council. While during the first decade of the revolution it often acted as an arbiter between the wings of power, the Office of the Supreme Leader has been the embodiment of the interests of the military-bonyad complex since 1989. Apart from detecting the compatibility of all legislation with Islam and the Constitution, the Guardian Council screens the qualifications of all candidates in presidential, parliamentary and assembly elections. These institutional changes were the products of the revision of the Constitution in 1989 that aimed to marginalise the ‘Islamist leftist militants’ inside the state who opposed the instigation of neoliberal reforms.
While the military-bonyad complex controls mostly unelected institutions due to the Supreme Leader’s close ties with this fraction, the internationally-oriented capital fraction is left to struggle for the elected institutions, most notably the presidency as the second most powerful institution of the state. Despite difficulties imposed by the Guardian Council, the internationally-oriented capital fraction has managed to control the government (the executive body) for most of the time since 1989. Whenever in the control of the government, this fraction has altered the function and character of many ministries and governmental organisations, such as the Ministry of Economic Affairs and Finance, the Central Bank and the Management and Planning Organization and created new institutions, such as the Trade Promotion Organization of Iran and the Iranian Privatization Organization and reopened the Tehran Stock Exchange. Considering the unfeasibility of seizing the appointed institutions by the internationally-oriented capital fraction and their fragile control over the elected institutions, one of the major political disputes in recent decades in Iran has been over electoral fraud and the legality of the Guardian Council’s preselection process. However, the numerous attempts by the internationalist fraction to limit the power of the Guardian Council have been unsuccessful.
As well as the struggle over formal institutions, civil society organisations have been either created, attacked, or banned in line with the realisation of the interests of the internationally-oriented fraction of capital and the military-bonyad complex. While the number of political parties, NGOs, magazines and newspapers increased dramatically during the Hashemi and Khatami governments, the military-bonyad complex has considered the development of civil society and the expansion of the press as Western (US) tools for threatening ‘Islamic revolutionary values’. It thus has routinely employed force to close down civil society organisations and newspapers.
In conclusion, the article argues that this conspicuous institutional reorganisation since 1989 results from the reconfiguration of the class basis of the state, which is internally related to the process of Iranian neoliberalisation. Since the Iranian neoliberalisation is not an internally-generated phenomenon, the change in the form of the state also cannot be solely reduced to internal factors and local dynamics. This perspective is radically different and conceptually superior to the rentier state, elite-based and neo-patrimonial analyses of the Iranian state for two reasons. First, it departs from viewing societies/states as self-contained and autonomous objects that affect each other similar to the way billiard balls bump into one another on a pool table. Second, it challenges the conceptualisation of changes in the form of the Iranian state as a merely elite-driven neo-patrimonial reshuffling of patronage networks and institutions by linking these changes to the imperative of capital accumulation.