The Thirsty Fish

Subsidy Payments in Iran: Too Much or Not Enough?

It is still less than a year since the targeted subsidy program went into effect in Iran, replacing cheap energy and low-price basic foodstuffs at the point of consumption with cash payments to nearly everyone.  In addition, the government is providing low-interest long-term loans to local industry, well below the rate of inflation, to upgrade their energy infrastructure so that they can produce their goods more efficiently.  I’ve written about the lack of vision in the country’s industrial policy elsewhere, but since my comments went up there have been more promises of action at least.  Some industries and provinces report that they are finally getting these loans, while others are still waiting. 

Predictions of success or failure are premature, however, because the point of the subsidy liberalization programs is not to garner revenue for the state, but to starkly restructure the incentives for both capital investment and individual household consumption.  A colleague in Venezuela, a country with its own subsidies for energy consumption, tells me the local elites there are very excited about Iran’s recent moves, which is probably the first time opponents of Chavez and the Ahmadinejad government shared a policy goal.  The IMF, eager to promote price liberalization across the Middle East, has also given high marks to the country’s efforts, though they are rather taciturn on how Iran can foster growth in the labor-intensive, high-skilled sectors that the country needs to promote to absorb the growing ranks of the educated yet unemployed youth.

Conversely, projections of total collapse and mass rebellion were also misplaced, even though few people ever got fired over the last 30 years for predicting the implosion of the Iranian economy (Maybe the Iran Nostradami should start a thinktank with the economists who thought the US housing bubble would go on forever).  I can’t remember anyone inside Iran I ever spoke to who predicted that people would start an uprising over such matters - in fact the famous “riots” that occurred in 2007 due to gasoline price hikes were not widespread at all.  I was in Iran during that time and the whole thing was over in 2 days, with less than ten petrol stations attacked.  Try being in Iran during Chaharshanbeh Suri if you actually want to see a large scale rebellion…

There is an ongoing debate inside the country about whether a nearly universal program that pays $40-45 a month per individual is sustainable.  Some majles MPs say the government is already pilfering from other parts of the budget to pay for ongoing transfers.  There are rumors, often suggested and then denied in the press, that the top income deciles will be cut out of future payments, perhaps in the 2nd year of the plan.  Of course the reason the payments are universal in the first place is that the government couldn’t actually figure out who was making what in a trustworthy manner, so they scrapped the idea of income “clusters” and just paid out to everyone!  As with a lot of the Iranian press, then (and the opposition and diaspora press to boot), we usually only hear the salacious or threatening rumor, and then we never see the follow-up article on page fourteen which often shows how such-and-such policy (or threat) was never actually implemented.

So, in the apocryphal words of Zhou Enlai, it is too soon to tell the overall impact of the newest market-friendly paradigm in Iran. Now is not a time to speculate, but to analyze.

Let’s try to go beyond the usual rumor-centered talk.  And let’s assume that, not only will these payments remain basically universal, but they will remain indexed to inflation, so that their value does not whittle away as prices go up further.  It’s an assumption, yes, but let’s hold our tongues for now.

One considerable transformation is that poor households in Iran are, for the most part, receiving a big income payment every month.  This is not completely unprecedented.  In fact, one of the points most Iran analysts forget to mention when they describe the new subsidy payments is that many poor families have already been getting cash payments for years.  Much of the elderly poor, families without a male breadwinner, and families with disabled members have been getting both cash and in-kind aid from one of the biggest welfare organizations in Iran - the Imam Khomeini Relief Committee.  Say what you want about this organization, but it has transformed a lot of communities in the country (a related organization is mentioned in the beloved Dariush Mehrjui movie, Mum’s Guest).  

So, for poor families already getting aid from the state, this simply adds onto the welfare system they already benefit from.  But, of course, many middle-class Iranians benefit from the country’s welfare system as well, whether from public education, generous state pensions, or low health care costs.  However, due to rising prices for almost everything else, it seems like everyone is losing their purchasing power in Iran, yet again.  But if subsidy payments remain inflation-indexed, then this will contribute to a major redistribution of wealth in the country.  According to Alef’s website, this is already happening:

If you don’t understand Persian, read the chart from left to right.  It shows the Gini index of income inequality over the past several years according to one particular Statistical Center of Iran survey of household expenditures (1390 began in March 2011 so the most recent number is obviously a projection).  Lower numbers mean less inequality.  While I am not certain of the accuracy of the exact number they are now reporting, I’m not surprised income inequality in Iran is generally lower, simply because poorer families are getting more cash income all of a sudden, and the survey is picking up on the fact they are spending the money.  Previously they may have been making ends meet with different means of non-income livelihood strategies, of which there are many across the global South.

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Iranian Sociology, Global Sociology, Peripheral Sociology

I just returned from a short trip to Tehran, where I attended the first day of a conference hosted by the Iranian Sociological Association.  The opening keynote was delivered by Professor Michael Burawoy from U of C Berkeley:

Burawoy and others spoke about a simple but often unmentioned fact in the global field of knowledge production.  Social science theories are typically produced in a few rich countries and then consumed by everyone else, no matter how useful or correct they tend to be.  Sociologists in the global South can usually gain prestige within their own educational institutions only by publishing in a few “international” journals in the global North, usually in English.  The accreditation and prestige rankings of journals tends to overlap onto the global hierarchy of wealth in the world economy.

For example, as Professor Tina Uys pointed out, the South African Journal of Sociology is not given the coveted ISI ranking as an international journal, even though it is peer-reviewed and rigorous, but the British Journal of Sociology is ranked highly by ISI.

Concepts tend to be produced in the elite centers of scholarship in the North, and then applied uncritically to countries in the South.  Take a concept like “social capital” - it emerged from very specific studies of French class structure by Pierre Bourdieu, or education institutions of the US by James Coleman.  It was meant to be a highly context-specific understanding of the relationships and networks that individuals are embedded in, and how they use these social relations to achieve coveted socio-economic positions or exclude others from those positions, often by participating in communal group activities.

Today, in Iran, many sociology students are obsessed with the idea of social capital, but not as a context-specific lubricant of social life.  Instead, social capital is what Iran “lacks,” because the concept has become so abstracted from its origins that it is used as a remainder to explain the absence of what countries in the global North supposedly possess: democracy, capitalism, women’s rights, happiness, etc.

This is not just in Iran.  Social science in much of the former Third World, because it is already in a precarious situation, uses the most mainstream concepts from social science and applies them towards their own areas.  Writing tends to remain in the abstract, presents “Western” social science as a monolithic entity devoid of controversy, and elides the use of local case studies and deep ethnography which may question the validity of such concepts.  Quantitative methods with a sheen of “science” are preferred over qualitative analysis.

Just for example, from a different viewpoint, it is almost impossible to look anywhere in Iranian society and not see “social capital” in operation.  Everyone’s livelihood depends, to a large extent, on their negotiation and maintenance of multiple social networks.  Mosque networks, women’s clubs, sports leagues, cultural centers, underground DJ nights, basiji volunteer groups  - what are all of these but avenues for different Iranians to cultivate and expand their access to certain exclusionary social positions?

Personally, I rarely use the term “social capital” at all, because it is a buzzword stolen from social science and used by management gurus and insta-pundits.  Yet I still have to deal with it because my own students in the US use the concept the same way as Iranians.

Two hopeful points to end on, though.  First, plenty of the best and most innovative social science of the 20th century came from the global South, not the North.  Much of radical development theory came from Latin America in the 1950s and 1960s.  World-systems analysis is Africanist in its origins (Immanuel Wallerstein, Samir Amin, and Giovanni Arrighi all studied in Africa in the 1950s and 1960s).  The post-colonial paradigm, while certainly full of abstruse French post-structuralism, comes from the Indian subcontinent’s re-thinking of their own history in the 1980s and 1990s.  Lastly, the Chinese experience of peasant revolution and market development presents a challenge to mainstream understandings of capitalism and modernity for the 19th century Western social thought which bore the core theories of contemporary sociology.  The current structure of global knowledge production, however, means that much of the insights that these areas hold for our understandings of the world first have to come to the North, get re-packaged, and then exported again to the global South.

Second, I met a few sociology students on this trip who, unlike their colleagues, were genuinely interested in local ethnography.  They discussed using detailed case studies to critically utilize the sociological toolkit to better understand Iranian social life.  This is quite different from the oft-heard Iranian dismissal of all social science as “western,” which is equally misguided as the uncritical use of sociology in an “one size fits all” version.  Those two positions do not actually understand the sociological project.  To wit, not a few sociologists in the Middle East hold that Ibn Khaldun’s political sociology of state formation and collapse is a precursor of later social science, which is correct.  But Khaldun’s theories of city vs. tribe are embedded in the politics of the Maghreb during the 14th century, and should not be universalized as a unique theory of “muslim societies,” as Ernest Gellner once argued.

Every time I travel back to Iran, I am always surprised by what is being translated into Persian.  On this trip, I noticed new and beautiful translations of Pierre Bourdieu’s Distinction and Perry Anderson’s Lineages of the Absolutist State.  Here’s to the translators, publishers, and scholars in Iran who exemplify the critical, reflexive, and innovative traditions in global sociology.

Thinking about Social Inequality and Waves of Unrest

This morning I published a short piece on the structure and politics of labor in Iran at the USIP blog.  There is a small section in the article about absolute vs relative poverty in Iran vis-a-vis Egypt.  I want to expand on that here, because while absolute poverty is something that economists take seriously, relative poverty, or, more aptly phrased, social inequality, is something that sociologists take seriously.  And so should you.

As a region in the global South, the Middle East and North Africa (MENA) is not the poorest in terms of absolute poverty - the percentage of a population under an absolute line of consumption expenditures.  East Asia (EA) and Sub-Saharan Africa (SSA) contain larger segments of their population under the World Bank’s oft-used “$2 a day” line.  Of course the boundaries of the “Middle East” - a totally useless unit if you take geography seriously - can sometimes lump in poorer states and richer states that have very different political economies and relations to the outside world.  But I’ll let that slide here.  

According to the World Bank, for 2005,

• MENA states had 16.9% of their population living under $2 a day on average
• EA was at 38.9%
• SSA was at an alarming 72.9%
• India’s poverty level, 75.6%, is similar to Africa’s
• Latin America’s poverty level, 17.1%, is very close to the Middle East’s.  
• Iran’s absolute poverty level at $2/day in 2005 stood at 8% (if you use higher poverty lines, you get higher poverty rates in Iran, or anywhere - but I am trying to compare countries and regions here and the World Bank only gives us this line to use).

Since I tend to look at development issues in world-historical terms, I would wager that regional variations in poverty within the global South cannot just be explained by individual states either caring or not caring about poverty, or by class relations and capitalist development within individual countries.  Those two aspects matter, but what also matters is how regional political economies relate to and integrate with the world economy.  

Latin America has a long history of state formation because of its colonial and post-independence history, longer than the rest of the post-colonial global South, and that might play a role in its ability to expend resources on the poorest over the 20th century.  The Middle East, in many countries, does not have a long history of post-colonial state formation, but in the 20th century it did possess a history of high-capacity (powerful) states compared to other regions.  And, as in Eastern Europe and Russia in the 20th century, another distinct “region” that I would include in or near the global South, strong state capacity can be used to rapidly lower poverty levels through egalitarian social policies.  These sort of polices were implemented widely in the 1960s after formal independence in the MENA region, and that includes Iran once you take into account the Shah’s White Revolution (a milder form of egalitarianism, yes, but still a change in policy). The point is that each region did not proceed along the same path, nor were these paths irreversible.  One cannot explain the high poverty rates in Africa, for example, simply because of state failure, but also because the area’s comparative economic advantages in the 1960s in the world economy disappeared when East Asia rapidly industrialized.  

This is all a precursor to my actual point, which is: if MENA is relatively less poor than other regions, why is everyone reporting on high poverty levels as one of the cause of the grievances that is driving the ongoing wave of rebellion and unrest in MENA states? They are confusing absolute poverty, which is not the biggest problem in the MENA region, with relative poverty, or, as I prefer to call it, inequality.

Inequality is measured a lot of different ways, but the most common method is the Gini coefficient, which scales a country’s income inequality from 1 (totally equal) to 100 (totally unequal).  Gini levels of 60 are very unequal in the real world, only a few countries like South Africa or Brazil have been up there.  The United States is currently at a Gini level of 43, which is quite high for wealthy countries, and is a return to the high inequality of the US in the days of H.L. Mencken and Mark Twain.

Just as with absolute levels of poverty, world regions also exhibit clustering around particular levels of inequality that persist for long periods of history.  And, again, I would argue that this is because of particular differences in the ways and times that different regions were integrated into the world economy, as well as the subsequent changes in this “region <—> world” relationship.  So there is an under-theorized link between levels of inequality within countries, regional political economies and their average inequality, and global processes of economic expansion and geopolitical formation.

That’s just a caveat against the usual story where states and national economies are seen as totally enclosed social units and all their problems can be explained away by looking at government policies - sometimes called “methodological statism.”

Back to our story, though.  Looking at regional levels of inequality, a different variation emerges.  The Gini coefficients shown below is the index divided by 100, that’s why it has a decimal point.  (Note, I don’t agree with the methodology of this table from The Economist because it uses PPP data, but it suffices for this post):

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Upcoming Appearances - Bonus for German Readers

I’ll be speaking at two events in February related to the release of The Iran Primer:

• 2/10 in NYC at The Asia Society, 6 pm (tickets required, sorry)
• 2/18 in Washington DC at The Woodrow Wilson Center, noon (free and webcast)

I plan to talk about the political economy of Iran within a comparative framework, touching on issues of labor politics, the bazaar, the informal sector, and the privatization of state-owned enterprises.  If you have any specific questions you want answered, send em my way.  I’ll try to work them in and it will be our secret.

postscript: To all my German comrades, I am pleased that Prokla, a left-leaning journal in Germany, has published a short article of mine on the politics of the Green Movement in their most recent issue.  On newsstands now!  What, your local Wal-Mart doesn’t carry Prokla?  Well, I’m sure they will if you ask them nicely.

Iran’s Subsidy Reductions - Who Gets Targeted and Who Eats It?

The long awaited liberalization of energy commodities in Iran has finally begun.  Over the past weekend, President Ahmadinejad stated, “At this stage, we don’t want to free prices, rather we are going to regulate and reform them.”  How regulated will this new system be?

Iranians with private cars get a monthly ration of about one full Iranian tank of gas (in the newer stylish Peugeots) at around $1.50/gallon, then the price goes up to $2.60/gallon.  The price is not floating - it is still set.  Additionally, and what is not being covered in the Western media, is that all sorts of bonuses and extensions of monthly ration limits are being granted for now - essentially this is a way of cushioning the shift to higher prices.

For instance, licensed taxis get a monthly ration on their “smart card” of 130 gallons a month, and a bonus of more than 100 gallons has been announced - that’s a hefty increase and it may placate the perennially grumbling taxi drivers for now.  Private drivers (including many who moonlight as gypsy cabs) get a bonus of 13 gallons - not even a full tank of gas for Iranian cars, I am told (I never developed the fortitude to drive in Tehran, I must confess, and thus never owned a smartcard).

But let’s face the facts - Iranians who have long priced in cheap gasoline and other energy sources for their budgets are now confronted with a huge shift in costs.  Some will cope, others will be hurt.  The government is giving around $40 a month to every individual via personalized bank accounts, which can now be withdrawn by Iranians from the very handy ATMs that are available near most city streets.  It is stated that around 80% of the country is getting these payments - we will see how accurate that number is as time goes on.  Comments on the blogosphere are interesting - some Iranians writing, “this oil is the nation’s,” which they take to mean that subsidized gasoline is a citizenship right.  US citizens also expect cheap gas as a (god-given?) right - the question is not whether this is true or not but how particular citizenship rights are construed.  Rights are a matter of politics, not providence.

Will this lead to inflation?  Most certainly - the question is how much and where it is concentrated.  One worry I have is that the cash payments are not indexed to inflation currently, though the government could make changes to this in the future.  But at its present levels the purchasing power of $40 a month (in tomans) will be inflated away over the next 4-5 years.  The government has promised to spend a portion of its freed revenue in the health system - let’s hope some in the majles remember they promised that and holds them to it.

Because here’s the rub.  When the government pays the different between the actual cost of the good and the subsidized price, this is a de-commodification of a lot of the burdens of daily life in Iran.  What is happening now is a re-commodification of life, and as we know from Karl Polanyi, the attempt to embed daily life in the market can lead to a “double movement” - a reaction against the marketization of previously uncommodified social practices.  What Polanyi never analyzed very well is the share of burdens of commodification of daily life - upon whom will the costs fall?  The answer to that question is not a given - it depends on the distribution of power in society.

According to witness accounts, people are going about their business.  I would discount general or intermittent media reports of unrest, because 1. griping is an Iranian art form and 2. the outside media is operating in a particularly inane manner here.  Just today, for instance, a BBC reporter in London phoned in a report to NPR about Iranian woes on subsidy reductions, and got two of his major facts wrong.  One, he said that subsidies in Iran started in 1980, when in fact a subsidy of at least a few basic but important goods goes back to the Shah’s time.  The Shah was most likely emulating the more populist regimes of Egypt and Syria in the 1960s/70s, who had rather generous subsidies for bread  (ah, the good old days in the Arab world).  Second, the current subsidies regime was a policy implemented as a reform to the time of strict rations and black-market corollaries of the 1980s war era with Iraq.  So this is not a policy the government has wanted to enact since 1980, but rather since 1989 once the era of reconstruction commenced.  For a Brit whose welfare system is basically a legacy of World War II, I would have hoped that one might see the similarities between his country’s experiences under duress and the social policies that resulted in Iran as a result of the Iran-Iraq war and its legacies.

But, back to the present, I am concerned that the subsidy reductions as demarcated will lead to increased inequality in an already polarized middle-income country.  The bottom line is this: if the point of this plan is to get people to consume less of these goods, then they will achieve their goal.  Economist Said Laylaz is telling the Los Angeles Times that traffic will be less congested in Tehran - the silver lining for sure, and something that also occurred after summer of 2007 when gas rationing and price tiering was first introduced.  But if this point of this plan is to “get the prices right” and kindle economic growth, the government will be sorely disappointed.  Furthermore, the fact that everyone in Iran is together experiencing this seemingly arbitrary act by the state could form a powerful grievance if anything goes wrong in its implementation.  Unfortunately, our analysis on the state capacity of Iran is dominated by hearsay and axe-grinding, not sober empiricism, so don’t expect much from the experts.

5th Development Plan in Iran Further Privatizes Health and Education Sectors

I have not seen the 5th Development Plan proposed by the Ahmadinejad administration, but judging by the outbursts of a few MPs in the majles, the plan calls for privatizing large parts of the education and health sectors.  The resistance by doctors illustrates that opposition exists in the health field, and one can also take heart that none of the 5-year development plans in Iran have ever been implemented very thoroughly.

According to Khabar news, the 5th development plan proposes to set up a Health Insurance Organization to regulate non-governmental funds which would shift the burden of health costs out of the public sector.  “Non-governmental” in Iran does not necessarily mean the non-profit sector.  It refers to any organization which is not directly under the management of the state.  Much of the existing welfare system in Iran, such as the Social Security Organization, is included in the “NGO” sector.  So it is unclear what this proposal actually means (though it eerily sounds like someone in Iran is familiar with Obamacare and simply added a “public option”).  Whether this will push the onus of payment further onto employers or onto individuals is not stated.

Medicine and medical services, no matter who provides them (public or private sector) in Iran, are still highly subsidized.  Their costs are quite low relative to both middle-income countries as well as Iranians’ average income.  Notably, the subsidy liberalization plans that seem to finally be moving forward do not include reduction in these medicine and health subsidies.  But out-of-pocket costs for Iranians have continued to go up as the domestic health industry has lagged behind international trends.  This is not something unique to Iran, and any middle-income country who tries to provide near-universal health care runs up against such barriers.

The larger question from these debates is: why does the Ahmadinejad administration proffer privatization as its solution to all problems?  The conventional wisdom is that the economy is in shambles and thus the Iranian state is forced to sell off its assets to deal with a fiscal crisis.  Given that the government is still funding large projects in infrastructure, especially in remote provinces, the conventional wisdom seems to be wishful thinking, and it avoids a deeper issue of ideology.

Instead, it seems that Ahmadinejad, and whomever else he hired to write this plan and help devise his economic policy, are true believers in the magic of the market.  In a television speech to the country about the upcoming subsidy reductions on fuel and basic staple foods, the president affirmed that every individual would be receiving 40 dollars a month to help them compensate for higher prices.  He then told them to not go out and spend this money on new curtains or a refrigerator, but consider putting it in the Tehran stock market (I’m not joking here). 

This ominously reminds one of Latin American and Sub-Saharan African countries’ embrace of orthodox economists’ advice in the 1990s, when states were seen as the problem to every economic dilemma and liberalization as the solution.  The Iranian reformists cannot critique the government on this angle, because they are the ones who imported this sort of discourse to Iran in the 1990s.  Thus we instead hear all sorts of critiques about technocratic incompetence from the reformists, which again portentously sounds like Latin America in the 1990s.  Not a very galvanizing political strategy for the masses, by the way.

The irony is that, while Latin American and Africa countries were, in most cases, forced to engage in these sort of economic adjustments due to their balance of payments problems - the fiscal crisis leading to seeking of aid of last resort from the IMF - Iran is doing it to itself without any external coercion.  This comes at a time when the major push in development economics, not to mention the actual policies currently being carried out in states like Brazil, India and China, is to increase state capacity and re-intervene in many sectors which previously had been “off limits” according to the economic wisdom.

To be clear, Iran is not going full throttle into Hayek’s arms.  The subsidy liberalization that is supposed to finally commence this month is being supplemented with anti-hoarding measures by the state (basic commodities being stocked), the return of the coupon for cooking oil, rice, etc (reminiscent of the 1980s war years), and the assurances of a gradual price change for both industry and consumers.  But it does herald a larger shift in Iran’s political economy, even if all things go as smoothly as the President promises.

Three Easy Pieces

Why write on a blog when people will publish your work elsewhere?  That’s not the only driving force behind my quietude here, since I am immersed in academic mill grinding, but it is a factor.  Nevertheless, here are a few pieces that, while written at various times in the past year, all came out in the last several weeks.

First, a very condensed version of a paper I presented at Cambridge University this summer on pseudo-privatization in Iran’s economy is out in the new Muftah web magazine.  The nut of it: Iran has been shifting its state-owned economy to a host of economic players still linked to the state, but this is not the same thing as a takeover of the economy by any single actor (i.e. the Revolutionary Guards).  So far, feedback on the piece has been favorable.  The actual paper will be published in 2011 in an edited volume on Routledge.

Second, I was asked to write a policy “briefer” on the Iranian bazaars for journalist Robin Wright’s new Iran Primer.  The whole book is a repository of the accumulated common sense on Iran shared by the more vocal and well-placed US crew of experts that work on the country.  Whether that represents an accurate picture of the country or not, I reserve my judgment.  I immediately asked that Arang Keshavarzian write the briefer on the bazaar, since he is the actual expert on it (he did honest-to-god field work in the bazaar in the early 2000s).  But he was grinding his own academic mill, so the task was up to me.  Given the uninformed suppositions about the power of the bazaar, and the stale thesis of the “mosque-bazaar alliance” that still floats around the aforementioned crew of experts, I took on the job.  Most of the piece would not have been possible, however, without Arang’s excellent work.  Here is my piece via the USIP site and reprinted on Tehran Bureau.

Lastly, and hopefully not the least of these efforts, I have published a review of Mehran Kamrava’s 2008 book Iran’s Intellectual Revolution in the current issue of New Left Review.  I wrote this review in six hours sitting in a hotel lobby in the Iranian city of Ahvaz.  The original solicitor of the piece turned it down, and by luck it was circulated to the desk of the editors of NLR, who asked me to expand it for a non-Iranian audience.  It is not just a review of Kamrava’s book, but an initial attempt to critically analyze many of the social and political frames in which Iran is situated, in this case by the country’s own intellectual strata.  Unfortunately, the entire piece is available subscription only, but you can probably read it in about 20 minutes over a coffee at your local Borders.  Or at a library, if you still have one of those things in your town.

A lot has been happening in the Iranian economy recently - subsidy reform, currency moves, bullish stock market runs - and the current coverage in the news is pretty inadequate.  I’ll follow up with a post putting some of these events in context, but for now, back to the mill.

Iranian Sociology and its Discontents

I recently returned from Gothenburg, Sweden and the quadrennial International Sociology Association’s World Congress.  It’s kind of like the World Cup of sociology.  There I sat in on a session organized by the Iranian Sociology Association, where a few presenters, including its president Hossein Serajzadeh, discussed the state of social science in Iran.  I have visited many sociology departments in Iran, both in Tehran and elsewhere, over the past few years, and the comments I heard echoed my earlier experiences.  Sociologists feel that most of the problems of social science institutionalization in Iran stem from the state’s politicized relationship vis-a-vis the disciplines.

With the recent intensification of state pressure on Iranian social scientists, including “early retirements” for some of the professors in the most prestigious faculties in the country, no one should dismiss the constrained atmosphere in which Iranian social scientists and students operate.  But is that the only problem with Iranian sociology?

Two of the presentations focused almost exclusively on institutional aspects of Iranian social science - enrollments, programs, number of students, and its history.  This is par for the course - I often find that discussion of social relations in Iran takes the form of “just the facts,” usually with a comparison between Iran and wealthy countries thrown in for good measure.  This time, Iran’s undergraduate and Ph.D. enrollments in the social sciences were stacked next to OECD countries, like the US and France, as well as Turkey and South Korea - the perennial “model states” that Iranians compare themselves to.  Frankly, Iran didn’t look too bad.  But this type of comparison - deeply rooted in an exceptionalism that pervades both mass and elite society in Iran - displayed a lack of reflection itself.  Sociologists should try to question the standard frameworks and categories that others apply.  If you put Iran up against Brazil, Egypt, Indonesia, China, India, Mexico, etc, - in other words, the large Third World countries that are more reasonable to compare Iran with given their common histories - what would we find?  I wager that many of the “backward” statistics Iranians often point to - not just on social science institutionalization but also in almost every other category - would fall neatly in the middle of the range that is observable in the former Third World.

Better yet - Iranian sociologists should be asking a question one level removed: Why does this latter sort of comparison never occur?  Confronting - and theorizing - that conundrum would call into question some of the most deeply held myths present in Iran today, no matter where one stands on the political spectrum.  But that is the job of social scientists, because few other intellectuals are interested in myth-busting, especially when nationalism is involved.

To be fair, none of these characteristics are exceptional to Iranian intellectuals at all.  Exceptionalism is part of nationalist rhetoric from Poland to China to Madagascar, thus it is the least exceptional thing about Iran.  Intellectuals, historically, have been one of the main conduits for such exceptionalism, in as much as they see themselves agents of the nationalist cause.  This has produced some great work over the 20th century - Eric Williams’ Capitalism and Slavery comes to mind.  Part of the job of successive generations of intellectuals, of course, is to take apart the bundle of myths that previous scholars embed in their analyses.  In Iran, this can be seen in the critique (or, sometimes, wholesale dismissal) of Ali Shariati which became prevalent in the 1990s.  I rarely, however, see Iranian social scientists reflect on what myths or assumptions are the most prevalent ones among Iranian intellectuals today.

One refreshing exception to this was the last presentation at the panel, by Shirin Ahmad-Nia.  She and her colleagues hinted that Iranian social science cannot recognize a range of social problems in Iran because it still relies on frameworks of understanding Iranian society through the antiquated paradigm of modernization theory.  Indeed, the large majority of Iran’s reformist intellectuals in the 1990s portrayed Iran’s problems as stemming from its trapped position “between tradition and modernity.”  It still forms the basis of rhetoric among many Iranian elites (and has done so, on and off, for the past 150 years).  Yet this too, is nothing exceptional - China’s social scientists are obsessed with modernization theory, for example.  So, I would encourage Professor Ahmad-Nia and her colleagues to reflect further on why Iranian intellectuals utilize modernization theory so, well, religiously.  We need, in other words, a sociology of Iranian intellectuals of the kind that Pierre Bourdieu did so well on the subject of French intellectuals.

In sum, many of the problems that Iranian sociologists noted about the state of their discipline in the country - a reliance on quantification of basic indicators instead of qualitative and critical analysis, a faddish and uncritical importation of the Western social science of the day, and an under-institutionalized training system - are not Iranian problems per se.  They are large structural problems within knowledge production in the global South.  Iranian sociology would mature greatly if they took this context as a starting point for their considerations.

Lawrence on Collier and Mintz on Haiti

The field of economic development has more popular books in print than was the case ten or twenty years ago.  In fact, the last decade where such a volume of print existed on poorer countries and their prospects was the 1970s.  That previous era, however, generated a more critical perspective on the promises of “catching up” to the wealthy Northern states.  Now, within the popular debate between, say, Jeffrey Sachs and Bill Easterly, there are huge assumptions underpinning both “sides” that are left unspoken.

Peter Lawrence, a geographer, takes on such assumptions in the latest development fad to hit your airport bookshelves: Paul Collier and his solutions for the “Bottom Billion.”  This short piece from New Left Review is one of the most trenchant critiques of the current development field that I have read.  Obviously the methodological criticisms are the easy ones - the application of econometrics to problems of political sociology is economic imperialism of the highest order.  But more substantively, the unmasking of Collier’s theoretical assumptions is what makes this review great.  The task left wanting by Collier’s work is that we still need to explain the “independent” variables that Collier uses for his explanations of endemic poverty and war - GDP levels, “bad governance,” etc. 

What Lawrence does not touch on in this piece, and something I would add, is that using PPP-adjusted growth rates as a correlative measure for any social outcome is highly suspect, given that they are doubly distorted.  They are distorted the first time when the World Bank issues them (and continually changes the historical record of GDP levels without telling anyone or explaining why).  The second order of distortion comes from using PPP-adjusted income levels on top of that.  To say something like, “For every 1% increase in GDP growth rates, one would expect 0.5% better governance” is a ludicrous statement on so many levels.  If you don’t believe me on the World Bank’s changes in its historical GDP data, go take a look at how the GDP for large Southern states such as China and India for the year 1960, say, keeps changing over time.  This is their GDP at foreign exchange levels, before they are even adjusted for Purchasing Power Parity.

Lesson to Iranians who often use indexes of business freedom and transparency when discussing their country: these scales are not very useful in understanding why countries are richer or poorer.

On a different note, the anthropologist Sidney Mintz has a wonderful essay in the Boston Review on his field work in Haiti from the 1950s.  In it, we get a sense of the importance of markets to subsistence production by the rural sector in an impoverished country like Haiti.  Mintz recounts the strategies of income pooling by women market sellers and the sophistication of the networks that existed.  It reminded me of something Giovanni Arrighi once told me, which was that peasant/rural life requires far more “skills” than urban life.  Put any of us in their position and we would starve shortly thereafter.

Implications for Iran from this piece: rural-urban linkages and peasant production are a source of vibrant social activity, not a traditional backwater.  Individuals who take part in such economic activities are likely more savvy than anyone (including the state) gives them credit for.  Notions that the rural areas are bought off by the state, or duped, are therefore suspect.

Yes, We Take Dollars

If you recall, a few years ago a lot of stink was made about Iran moving the currency used in its oil transactions from the dollar to the euro.  This fit neatly into the swirling conspiracies of the day.  For US hawks, this was a sign that Iran was an “ideological” actor hellbent on undermining US hegemony in the global economy.  For some on the political left, who also seem to equate currency exchange rates as the only measure of international power, this ensured that the US would subsequently go to war with Iran in (insert very small number) months.  When I was in Iran during the summer of 2006, and Iranians were quite scared of the threat of war, this kind of talk only made it worse.

Last Thursday (May 6th) in the newly re-opened Shargh newspaper (unfortunately, not available online at all), it was reported that the The Central Bank of Iran announced that it would not be replacing the remaining dollars in its foreign exchange currency basket with euros.  Furthermore, industrial units that held debts to the banking system could still pay them in dollars.  This is because state loans to large industrial concerns in Iran often use hard foreign currency in order to allow them to make international purchasing easier and reduce the inflationary costs on domestic business.

The article features responses by several high ranking Maljes members, all of whom make sure to state that this is not a “retreat” away from the euro.  Indeed, the government bragged last year that it had made $2 billion by converting foreign exchange reserves to the euro over the past several years, due to the dollar’s relative decline.  That was certainly announced with a lot of sound and fury.

However, note what Musa Servati, member of the Majles Budget and Planning Commission, had to say: “When the dollar’s rate is up, it is better to use the euro, but when the euro’s rate is up, it is better to use dollars in transactions. …Hence, we cannot say that the Central Bank’s policy was necessarily to move from the euro to the dollar, but it is a form of policy on money that we should use in order to have a varied currency basket.”

In other words, the Iranians play the international currency markets like everyone else, and the deep (and unresolved) crisis of the world economy is temporarily sending everyone back into dollars.  Provided the European currency survives this year, I am sure none of this will be mentioned the next time Iran moves into euros again.