February 13, 2007
And the Command Economy Goes, "Stumble, Stumble, Crash"

Mike J. gets a perceptive no-prize for bringing us this comparatively even-handed look at all the other problems Iran is facing. The payoff for me (emphasis added):

To curb demand, which has been driven in part by subsidies that keep the domestic pump price at a mere 35 cents a gallon, the government plans to begin rationing gasoline in March, a measure so unpopular, and potentially explosive, that rationing plans have been put off several times in the past.

This single paragraph tells me volumes about what is going on in Iran, and consulting everyone's favorite on-line encyclopedia confirms it: Iran runs on a socialist-style command economy. As with all such social redistribution systems, the regime traded long-term growth and stability for short-term gains in "equality and fairness*," with the predictable result of an unresponsive, inefficient economy incapable of real long-term growth.

In other words, they made sure a peasant's lot was immediately improved by the revolution by taking shortcuts that would completely sabotage the pathways that would let that peasant's children progress and prosper. Like all progressive/liberal economic policy makers, they never thought past stage one and are now paying the price.

Unfortunately, history only provides one way out that actually works... implementation of broad and pervasive free-market reforms. I say unfortunately because, to date anyway, such implementations have always brought about chaos and instability in the short term. In all but one case (China, and only so far, and only because they were willing to crack some heads), this has ultimately resulted in the overthrow of the implementing regime. Not a nice thing to mull over if you're in charge of a population quite famous for its propensity to riot when things don't break their way.

So, will the imams do what needs to be done, with the understanding that history treats even the most egregious implementers quite well once they've gone? It's impossible to say. However, it does, to me, indicate that sanctions have a lot of traction left in them. Over time, economies based on state controls rot like a termite-infested house, and once they become sufficiently rotten it doesn't take a lot of knocking to bring them down.

Sanctions have historically proven to knock rather softly, but if the underlying wood is rotten enough, a tap may be all it takes.

~ If he hears, he'll knock all day ~

* Take from the rich, give to the poor, soak whoever makes more than a hardscrabble farmer with taxes and make sure no business is allowed to function without massive government oversight. In short, "we pretend to work, they pretend to pay us."

Posted by scott at February 13, 2007 01:04 PM

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And the regime has over-extended their reach in trying to support any anti-US, anti-Israel and anti-Western Shiite terror group that put it's hand out for cash.

A pity, as the Persian people are deserving of so much better than the scum in charge...

Posted by: Major John on February 13, 2007 01:56 PM

I agree that command economies bode ill for any nation. Unfortunately, events take longer than anticipated.

The price of oil keeps climbing. Events in the Middle East are unstable to say the very least. Seeing all of this, the mullahs may say see that their nation is going downhill and want to have an impact by bombing Israel, Lebanon or Iraq or all three countries.

The Iranian leaders don't have much to lose. They get 72 virgins when they die and the West inherits a radioactive cloud of dust and whole lot of poor starving Iranians.

This is the time to destabilize the Iranian regime using just about any means possible. Several methodologies might be:

Destabilize the Iranian economy with forged Iranian currency.
Assasination of a few key mullahs.
Blocking movements of Iranian currency.
Stealing/Sinking a few key Iranian tankers

Its odd that no one is doing this.

Posted by: subrot0 on February 13, 2007 02:19 PM

I love the image of Iranians waiting in long gas lines. It's so 70s.

Posted by: rjschwarz on February 13, 2007 03:38 PM

What worries me about this is that one of the ways that folks support and get more money in situations like this is to conquer someone. War in general.

This could explain the rhetoric we're hearing...h

Posted by: ron on February 13, 2007 09:47 PM
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