Does Iran’s Urban Working Class Have a Rural Subsidy?
There has been increased labor unrest in Iran during the past few years, and just in the past few weeks organized protests by workers have occurred in Ahvaz and Shiraz. Much less attention is paid to these types of protests compared to the recent student unrest within universities, yet Iran has a long history of labor activism. The Abadan oil strike of 1945 was the largest coordinated labor strike in the Middle East probably until the general strikes of 1979, where workers played a major role in ending the Pahlavi monarchy.
Yet one should not overestimate the homogeneous nature of the Iranian working class, and draw from that unrealistic assessments of its solidarity or predictions of a nascent “shop floor” revolution.
Iran, like many middle-income countries, has a small formal labor force, often located within nationalized (or formerly nationalized) industry. This section of the working class benefits from its position as “formal” labor, meaning that these workers have been able to extract better pay and benefits, working conditions, and legal contracts from their employer, who is often the state. But Iran, like many middle-income countries with large-scale industrial projects, never transformed most of its population into the industrial proletariat that was expected by theories of liberal and Marxist economic development.
Instead, what did occur in most of the world was the creation of pockets of formal labor, but mostly massive depeasantization and deruralization. These former peasants usually traveled to cities and became “informal” labor – a term that exists only in contradistinction to formal labor. This is the largest group of people in the world today, and it is the fastest growing social class. Many of these individuals make their daily living through a variety of economic activities – transient or temporary wage labor, self-employment, dependence on income from small remaining land parcels, and pooling resources within extended families. They have a very different life than formal workers.
Often those countries that carried out radical land reform, such as China and most of East Asia, gave their informal labor a more flexible way of moving back and forth between town and country. Those countries that completely removed the peasantry from the land decades or centuries ago, like much of Latin America and Southern Africa, are now suffering worse conditions as it becomes apparent that the world’s population will not be converted into an industrial proletariat.
The irony here is that, while a country still has a rural sector that can support itself, either by producing goods for subsistence or by selling them on the market, the rural sector can provide a form of subsidy for urban-based capitalist development. This is because migrants who come from rural areas and maintain ties to those areas can depend on those ties to make up part of their own subsistence. This makes it cheaper to use their labor in urban locales, thus increasing the profitability for capitalists who employ them. During the initial formulation of this conception of rural-urban ties in the late 1960s and early 1970s in Southern Africa, it was called the “rural subsidy” thesis.
When the rural sector is decimated through either “accumulation by dispossession,” in David Harvey’s term, or by land reform that is geared towards generating capitalist accumulation in the rural sectors, it undermines the rural subsidy to urban labor, and therefore raises the cost of labor in the urban sector. Rural individuals now begin to depend on ties to urban sectors for their subsistence, which raises the cost of urban labor even more. It is very possible (and often happens) that it is not worthwhile for domestic capitalists for employ urban labor at this cost, especially if they have to compete internationally.
The end result of this is that the chances for capitalist development in poorer countries is actually lowered when they become “more” capitalist - when their labor force resembles the wage-earning proletariat of our understanding of a “developed” country. This seems to have happened in the very country where the “rural subsidy thesis” originated. South Africa now has an official unemployment rate of around 40%.
As far as I know, there is no empirical work on how Iran’s labor force is structured with regards to the changes of urban/rural ties over the last 30 years. But, I wager that, as with most things, Iran is somewhere in the middle and not at the extremes of the spectrum. Its land reform in the 1960s was by no means radical, and the more conservative factions of the Islamic Republic stopped attempts at additional land reform in the 1980s. The result is that some urban-based Iranians who are in the informal labor force can fall back on rural incomes, but not all of them. Other urban-based Iranians provide an “urban subsidy” to their extended families who have remained in the rural sector. That means there are at least three structural groups in the Iranian working class that need to be considered separately: 1. Formal workers in mostly state industries and the public sector; 2. Informal workers who retain beneficial ties to the rural sector, and thus part of their livelihood can come from the rural sector; 3. Informal workers who have no ties to the rural sector, or must provide an urban subsidy due because their ties, and thus all of their livelihood must be found in urban areas.
Note that, thus far, I have not brought in the state to this analysis. The state can exacerbate or ameliorate any of these existing tendencies. In Iran’s case, I would also wager that basic welfare provisions for the poorest Iranians, through a variety of welfare organizations as well as subsidized consumption, have lowered the cost of labor for domestic capitalists. It also may have homogenized the working class to a degree that would not have existed if the state did not subsidize consumption.
However, it would be going too far to say that, when labor unrest occurs in Iran, it is always because of the same grievance. The structural divides of formal and informal labor are very apparent here, and overlap with ethnic cleavages (including migrant labor who ends up as the super-exploited class). The lack of horizontal organizational ties and representation in the government, except for the state-provided “House of Labor,” adds to the standing limitations on labor activism. Yet, even with these strictures, some related and others unrelated to the existing regime, labor unrest continues to pop up in unpredictable ways.
I hope to add more to my ongoing discussion on Iranian labor with a future post on Farhad Nomani and Sohrab Behdad’s recent work.
