Economic Explanation of Islamic Revolution of Iran (2)

The fourth talks: militarism

In any of the theories, militarism is not been mentioned as a factor of Revolution but, all theorists altogether, mentioned it as a factor besides other factors of revolution such as economic and non-economic. But militarism has had two major impact but, negative on the construction of the country, the first was large costs of national income to buy weapons and the second negative impact was the pride of increasing military power and oppression, that all of them are caused due to the country's oil revenue growth in the decades of 1340 and 1350 .
The numbers of the country's military forces from 200,000 in 1342 increased to 410,000 in 1356, force. At the height of the economic crisis in the country, Shah purchased weapons which cost 12 billion of US dollars in 1355. This amount instead of buying weapons could be paid for production of goods and factories in order to save the country from dependency and economic crisis. During 56-1350, twenty percent of oil revenues were paid to buy weapons which was included almost half of the US sold weapons to abroad. In this way, we can observe negative effects of militarism on modernization and development. Another important effect of militarism which has had a huge impact on development of the revolutionary crisis is regime's pride for increasing its own power. You can observe extravagant claims of Shah about becoming the world's fifth largest military power including that no force can overthrow him so, this was the reason that no one dared to criticize him, therefore, the imperfections were hidden, as result, a huge gap is created between people and the king in which the regime instead of relying on the people, relied on his army and thus, increased people's hatred of himself therefore, militarism by its own as other factors, contributed to the occurrence of revolutionary crisis.

The Fifth talks – traditional market

One of the main factors on which much emphasis is put, as a factor of Iran revolution, is the role of traditional markets. During Shah's regime, merchants were not only able to maintain their economic status, but also were able to keep their economic interests beyond the control of the government therefore, statistics show that all economical policies of regime have been quite beneficial to the merchants. Therefore, the financial losses never could be the motivation for the market to enter to the line of the revolutionaries. According to some researchers, the revolutionary causes of the market and its opposition to Pahlavi regime go back to the following four factors: First merchants, like other segments of society, were religious sect , fanatic , Shia and like others, reacted to the actions of government which was fighting with Islam and spreading of western culture, second the market, from the ancient time, have had deep association with clergy men thus, considering the country as illegal and legalized trading by paying Zakat and Khoms ,the marketers denied to paying tax to the state and on the other side, only pay Zakat and Khoms to the high clergymen so that trading becoming legalized.
Obviously, in this case, when the idea of establishing an Islamic religious government is presented, the merchants, either for legalization of government or embracing the advices of the religious scholars, started a clear opposition to the regime, therefor the merchants and clergymen's joining, guided them to oppose with regime and obey of the religious leaders.
Apart from religious and political reasons, we can also document two other economic reasons, the entrance of the market to the current of revolution was also due to the correct market prediction of the economic reforms of Shah's regime and the other, the talks of the king and other government officials, all and all was the news of a chaotic and uncertain future of the market. Shah as witnessed was publicly speaking against the market. He described the market as a traditional economy and a barrier to development, henceforth, the renewal process fails, he said. Tehran municipality's actions in destroying some shops for urban development, and especially the rumor concerning highway stretching from the center of bazaar of Tehran, for marketers did not have any meaning, unless the regime opposition with their existence. It was market perception that the aim of regime was spreading marketers and preventing their union so, this goal was promoting by the king's speeches. According to the merchants, if the trend of economic reform was continuing, they would have died as landowners in the 40 decade. Probably, they could benefit from increased imports and modernization of the king, but it was considered a temporary process. In fact, the regime's opposition with traditional market was coincided with increasing power of emerging bourgeois, new bourgeoisie who under the name of establishing industry and imposing their penetration among leaders obtained huge credit henceforth; they paid most of these funds to achieve huge profits and trading so , the country had faced the huge Kimirado who benefited financial as well as political support of the regime so, opposite to this class, there was traditional market that exchanging of goods weather in and outside the country was considered the biggest source of income, but never like emerging bourgeois, had not benefited political and financial support, however, although the market could obtain great benefit and having fixed and old customers in the 40 and 50 and especially by more confidence to shopkeepers , retailers and domestic buyers, it draw dark future for itself. The second reason of marketers' opposition to the Shah regime was his anti-inflationary policy after the economic crisis in 56-1354. Fining and imprisonment of large merchants and shopkeepers market, with sever propaganda of the regime against the market, left no doubt for the market that the regime is aiming at destroying it. The anti-inflationary policy which practiced quite unwise, not only did not solve the economic crisis, but also, increased the marketers' opposition as well as emerging industrial bourgeoisie. The King to maintain his power, attacked as madly to all, to the extent that in a short time even his friends left him. In summery, the market's tendency for revolution was not due to a single cause but, various reasons were involved. Market, not because of the regime's economic reform losses, but also because of omission of traditional tendencies, in the near future or distant, will undergo loses as a result, entered to the current of revolution.

The sixth talk- economical crisis

The concluding analysis of all economic theorists concerning Iranian revolution is the problem of economic crisis. The regime in ,54-1352-have been witnessed the increasing rate of investment, industry increase, the growth in gross national product, increase in the number of workers, employers, schools and universities, the increase of salary and food imports, subsides, free desert of school , building construction , consumption and especially improving high expectation and so on. All of these cases have been due to rising oil prices, which resulted in the provision of welfare policies in the years mentioned. The economic crisis of 57-1354 and its results which have included increased taxes, subsidies and nutrition of school, high prices, stopping many large developing projects, the decline of importing and etc., have had a crucial share in happening of revolutionary crisis . By increasing oil revenue in decade, 1350, the subsides of consuming goods increased and production developed up to 12 percent during the year. Agriculture also due to importing agricultural goods , rural migration to the cities , desolation of villages and the government's disregard toward agriculture was quit low thus, more important of all , it was the country's economic dependency to oil revenues . Economic crisis, started when oil's universal demand, due to high it high price and solving oil crisis of the west, faced distribution crisis therefore, with the sudden decline in oil revenues, the government suffered a distributed crisis. The government which, especially since the 52's, for the oil revenues started overall distribution and taking welfare policies so, by decline in oil revenues, the government found its hands empty which is facing with a wave of expectations. Although inflation has greatly increased since 1350, at the same time the salaries and benefits of workers especially employees also increased. The inflation increase in ,1351 to 1355, was primarily due to the increase in oil prices which have caused the increase in non-productive expenditure, both current and development, lack of income taxes of additional revenues and transferring income of additional private sector to productive investments but, due to the increase in salaries and benefits, such as subsidies, inflation and expensiveness was not so perceptible and when became tangible that the government due to reduced global oil demand in 1354 was met with budget deficit and income . The Inflation of 9.9 percent in 1354 suddenly increased to 16.6 percent in 1355 so far as this rate reached 1/25, in 1356.
Inflation have also had several other reasons , for example shortage of accommodation by entrance of 60,000 foreign technicians with their families , increasing rural migration and growing city population which cased high price of accommodation as well as high rent, exceeding the rate of population growth on agricultural products, the sudden increase in food prices in universal markets, west economic crisis and massive withdrawal of capital by foreign investors, militarism and increasing military budget from 293 million dollar in 1342 to 8/1 in 1352 and 3/7 milliard dollar in 1355 . However, the mentioned inflation left a major impact on prices with reduction and stability of salary also put much effect on society dissatisfaction in 1354-57. Most important than inflation and high prices is the strategy of regime in dealing with the crisis which is by itself a start for a new crisis, so here, due to its importance, we discuss it. According to a London economist, "inflation began in 1352, and in summer reached to such dangerous degree that Shah was eager to perceive economical problems with military criteria, as result, proclaimed the war. Henceforth, in the middle of 1350, although the state was superior in power, by deepening of crisis, this superior country has changed into an interfering country. After years ,1339-42 , it was the second regime's movement in preparing the groups so, the regime attempted to develop controlling system of the classes by imposing a unified party to prepare lower classes and drawing a nationalistic ideology and anti-religion in a way that, the king ,when forming resurrection party announced that all Iranians must be a member of the new party otherwise, they have to leave the country because no longer they are Iranian but , New movements of the regime was called age of resurrection because much resembled the fascist parties. Resurrection party became a means for political mobilization group that calls itself as provider for the interests of all groups so, for this purpose, the parties tried to mobilize workers, farmers and students, and has established 50,000 branches across the country as result, the power of the party expanded so that 80% of the 24th parliament joined to this party. Regime to combat inflation after the formation of the party went to the merchants and shopkeepers. The government had a stringent control on the price of most goods and to shorten the hands of foreign intermediaries and brokers imported large amounts of wheat and sugar. The resurrection party of inspection teams released 10,000 students in regular classes called " Dado organization" for the cruel war against profiteering , deceivers, speculators and reckless investors. So, these students because of sensitivity and experience in economic issues, created a lot of discontent among the shopkeepers and traders. Savak also got to work and by forming councils and trade, fined nearly, about 250,000 people, and deported 23,000 businessman from their own cities besides, sentenced 8000 shoppers to 2 or 3 year in prison and 1800 trader ,too . Late in 1354, at least one member of each marketer family, directly from the policy of "combating profiteering and expensive selling" had suffered. For example, a shopkeeper tells a French journalist that "as if white revolution seems to be a little likes a Red revolution". Another shopkeeper tells an American journalist, "the market has been employed as a means for covering the widespread corruption within the government and the royal family so, Resurrection Party was obvious insult to the marketers, and fighting profiteering, also was a tremendous attack to them. This strategy that anti-inflationary policy of the regime stimulates the marketers was something inevitable. Market that by the influx of foreign capital and goods and taking policies industrializing the regime in 1330 and 1340, had undergone a huge material losses, could gradually balance its benefits with new policies of economy and obtain huge benefits. Although traditional products have suffered loses, a large part of merchants who undertook Intermediary trading of foreign goods adapted themselves to the new situation. Many of the new generation markets ridded on the new wave and caught up with initial but, But once again in the mid 1350 -market and trader by regime faced with anti-inflationary and unwise policies and suffered losses that this time was mobilized with classes of society against the regime, on the other hand, the relations of regime with industrial capitalist, due to economic crisis, changed. The Struggle between the king and the industrial capitalists has culminated in these years. The conflict on the one hand was due to the king's fear of the increasing power of capitalists and the other, was related to the economic crisis. New growth in the decade of the 1350 class promoted to the extent that the king talked about the emerging danger of industrial feudalism, Along with economic crisis and poverty of funds, preventing distribution policy and supporting the lower level classes, caused panic and fear for capitalists. The government agreed to sell shares to the workers of private companies, Hoveida, the Prime Minister, assured the capitalists that they possess also the control of factories and companies as well as majority of the shares and distribution therefore; the government's objective of the government's policy is the workers' satisfaction. Investing capitalists, was just for the sake of creating a secure environment for their funding and support the regime but, by culmination of the workers' protest and economic pressure on people, that was due to inflation and high prices, controlling the regime on capitalists through monitoring of prices and wages, confinement of big businessmen, reducing of the bank credit to the private sector and mobilizing workers was also elevated. The difference between the industrial capitalists and marketers, are reflected within the resurrection party and the party was divided into two wing which one was the progressive wing who were the great defenders of the government intervention in the economy and anti-capitalism, and the other was a building wing who was considered as a supporter of economical liberalism and the big bourgeoisie. One of results of pressure on investors was capital flight from Iran by 2 milliard dollar worth. The main reason of capital flight in 56 was arresting some big capitalists such as Sabet and Hamdanian who were arrested and imprisoned due to profiteering commitment. The King in his radio speech announced that arresting capitalists have shown that his government is independent of the capitalist classes and is based on the people's thoughts. The purpose of the regime's policy in those years which was coincided with arresting Hoveida, former prime minister was to legitimize their treatments. Because the regime's welfare policy by lower oil revenues, had reached a deadlock, the king could not find a solution to calm the people Unless taking policy of fighting inflation and windfall wealth that this, also created a huge gap between the capitalists and regime. Thus, the economic measures to control inflation, not only could not solve the economic crisis, but also couldn’t legitimize the regime so; people believe that the anti-inflation policy of the Shah has been quite useless. According to them, the main problem was Shah, himself, and his family, they considered Shah's family a corrupted and easygoing family who obtained a huge capital by funds which is paid for oil and other resources of I ran. People believed that economic problem must be sought in corruption of ruling class. The regime's conflict with traders, shoppers and industrialists, was considered merely a superficial affair and this fact that the regime is playing trick to deviate public thoughts was proved by arrestment of Hoveida . conclusively, economic factors such as, remolding, gaining financial and economic power of the government and as result, interfering it caused lack of the elites' consensus on the need for, and methods of development, lack of capital storage, quantitative growth of production not qualitative, increasing numbers of industrial and engineering workers, excessive growth of services, relative poverty spread, unequal distribution of income and the great class distance, social problems of rural migrants in cities, militarism, merchants' opposition and the economic crisis of 57-1354 and as a result inflation, unemployment, larger class gap, arrests and fining thousands of shopkeepers, merchants , industrial capitalists, reduction , stability of salary and wages and so on were main factors of Islamic Revolution of Iran in area of economy.